Outsider Leadership: Insights and Interviews from Business Leaders [1st ed.] 978-3-319-97462-0, 978-3-319-97463-7

Table of contents :
Front Matter ....Pages i-xv
Introduction (Chris O’Riordan, Felicity Kelliher, Patrick C. Flood, Malcolm Higgs)....Pages 1-4
The Outsider Concept and Outsider Leader: A Literature Review (Patrick Buckland, Malcolm Higgs, Chris O’Riordan, Felicity Kelliher, Patrick C. Flood)....Pages 5-39
From Politics to Business: How Wide Is the Leadership Gap? (Chris O’Riordan, Patrick C. Flood, Felicity Kelliher, Malcolm Higgs)....Pages 41-61
Leading Within a Male-Dominated Sector: The Female Outsider Leader Landscape (Felicity Kelliher, Chris O’Riordan, Patrick C. Flood, Malcolm Higgs)....Pages 63-86
Serial Outsider Leadership: Coming in from the Cold? (Chris O’Riordan, Felicity Kelliher, Patrick C. Flood, Malcolm Higgs)....Pages 87-112
Outside in and Out and in as a Serial Entrepreneur (Felicity Kelliher, Chris O’Riordan, Patrick C. Flood, Malcolm Higgs)....Pages 113-133
Outsider Leader in an Outside Market: The Challenges of Market Entry (Chris O’Riordan, Patrick C. Flood, Felicity Kelliher, Malcolm Higgs)....Pages 135-157
Outsider After the Fact: Leading in a Founder-Present Business (Felicity Kelliher, Patrick C. Flood, Chris O’Riordan, Malcolm Higgs)....Pages 159-180
Outsider by Birth: Leading in a Family Firm (Felicity Kelliher, Chris O’Riordan, Patrick C. Flood, Malcolm Higgs)....Pages 181-205
Conclusion (Chris O’Riordan, Felicity Kelliher, Patrick C. Flood, Malcolm Higgs)....Pages 207-236
Back Matter ....Pages 237-242

Citation preview

Chris O’Riordan · Felicity Kelliher Patrick C. Flood · Malcolm Higgs

Outsider Leadership Insights and Interviews from Business Leaders

Outsider Leadership “The genius of this book is in picking apart a taken-for-granted category in leadership research—‘the outsider’—and mapping the terrain that comes with it. For ‘succession professionals’ such as Board Chairs, owners, private equity partners and the like, this book provides an invaluable tool in the form of a ready-reckoner of upsides and downsides that come with an outsider candidate.” —Anand Narasimhan, Shell Professor of Global Leadership & Dean of Faculty and Research, IMD “The perspective of the outsider has generated great literature throughout the ages. It is rarely a comfortable position but it is one that has motivated great achievement in academia, the military and public life. In Outsider Leadership— Insights and Interviews from Business Leaders, Felicity Kelliher and her colleagues cleverly apply the perspective to the business world with a series of fascinating case studies.” —Louise Richardson, Vice-Chancellor, University of Oxford “Standing outside, never being quite part of what’s going on, always looking in, observing, and trying to figure things out, can have many advantages. Outsiders are more likely to question what others would take for granted. As a first, Patrick C. Flood and his associates have looked at the question of outsider leadership, demonstrating how an outsider’s eye on things can turn into a competitive advantage. Anyone interested in this topic would be wise to pick up this book.” —Manfred F. R. Kets de Vries, Distinguished Clinical Professor of Leadership Development and Organizational Change; The Raoul de Vitry d’Avaucourt Chaired Professor of Leadership Development, Emeritus, INSEAD “Leadership is widely studied, as is outsiderness. But surprisingly, we know relatively little about Outsider Leadership. How do they lead? What are the advantages and disadvantages of feeling like an outsider? Being seen as an outsider by followers? The world is seeing a resurgence of outsider leaders in recent years and Patrick C. Flood and his associates are doing us all a great service by helping us learn more about what is happening around us. Anyone interested in understanding more about leadership is best advised to read this book.” —Randall S. Peterson, Academic Director of the Leadership Institute and Professor of Organisational Behaviour, London Business School

Chris O’Riordan • Felicity Kelliher Patrick C. Flood • Malcolm Higgs

Outsider Leadership Insights and Interviews from Business Leaders

Chris O’Riordan School of Business Waterford Institute of Technology Waterford, Ireland

Felicity Kelliher School of Business Waterford Institute of Technology Waterford, Ireland

Patrick C. Flood DCU Business School Dublin City University Dublin, Ireland

Malcolm Higgs Hull University Business School University of Hull Hull, UK

ISBN 978-3-319-97462-0    ISBN 978-3-319-97463-7 (eBook) https://doi.org/10.1007/978-3-319-97463-7 Library of Congress Control Number: 2018954419 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2019 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Chris: To Fiona, Cillian, Tara and Richard. Thank you for your love, support and patience. Felicity: To the current and new generations of thought leaders—come on in to the outside. Patrick: To Professor Stephen J. Carroll—my late, great friend and role model at the University of Maryland. Malcolm: To Karen. Thank you for your constant support and encouragement.

Acknowledgements

The authors would like to acknowledge the help and support of a number of people without whom it would not have been possible to produce this book. First, we would like to thank Anthony Dinan who inspired us at the beginning of this project. We also wish to express our deepest gratitude to all of the leaders who so willingly gave of their valuable time to speak with us and to read transcripts and draft chapters. We have learned a lot from their stories and experiences, and we are very grateful that they were willing to share these with us and others. We would like to thank our colleagues who, along the way, have helped us in a variety of ways. To Patrick Buckland (Waterford Institute of Technology (WIT)), Dr Mick Rock (WIT) and Olive Maitha (Dublin City University), we appreciate and acknowledge your great support for this book. We are very grateful to the publishing team at Palgrave Macmillan for all of their assistance and guidance in the development of this book. In particular, we wish to express our sincere thanks to Gabriel Everington, Maddie Holder and Liz Barlow for their very valuable help and expertise along the way. A special word of thanks also to Divya Anish of SPi Global for supporting us greatly through the final stages of production.

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To our families and friends, we would like to pay a special tribute for their patience, assistance and all-round support over the duration of the project. Thank you all, and here’s to the next book! The authors would be pleased to receive any correspondence from readers about the book.

Contents

1 Introduction   1 Chris O’Riordan, Felicity Kelliher, Patrick C. Flood, and Malcolm Higgs 2 The Outsider Concept and Outsider Leader: A Literature Review   5 Patrick Buckland, Malcolm Higgs, Chris O’Riordan, Felicity Kelliher, and Patrick C. Flood 3 From Politics to Business: How Wide Is the Leadership Gap?  41 Chris O’Riordan, Patrick C. Flood, Felicity Kelliher, and Malcolm Higgs 4 Leading Within a Male-Dominated Sector: The Female Outsider Leader Landscape  63 Felicity Kelliher, Chris O’Riordan, Patrick C. Flood, and Malcolm Higgs

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5 Serial Outsider Leadership: Coming in from the Cold?  87 Chris O’Riordan, Felicity Kelliher, Patrick C. Flood, and Malcolm Higgs 6 Outside in and Out and in as a Serial Entrepreneur 113 Felicity Kelliher, Chris O’Riordan, Patrick C. Flood, and Malcolm Higgs 7 Outsider Leader in an Outside Market: The Challenges of Market Entry 135 Chris O’Riordan, Patrick C. Flood, Felicity Kelliher, and Malcolm Higgs 8 Outsider After the Fact: Leading in a Founder-Present Business 159 Felicity Kelliher, Patrick C. Flood, Chris O’Riordan, and Malcolm Higgs 9 Outsider by Birth: Leading in a Family Firm 181 Felicity Kelliher, Chris O’Riordan, Patrick C. Flood, and Malcolm Higgs 10 Conclusion 207 Chris O’Riordan, Felicity Kelliher, Patrick C. Flood, and Malcolm Higgs Index 237

Acronyms

AIB Allied Irish Bank AIM Alternative Investment Market B2B Business-to-Business B Comm Bachelor of Commerce BES Business Expansion Scheme CDU Christian Democratic Union CEO Chief Executive Officer CFO Chief Financial Officer CV Curriculum Vitae DBA Doctorate in Business Administration DCU Dublin City University EGM Extraordinary General Meeting EMEAI Europe, Middle East, Africa, India ENTJ Extroversion, Intuition, Thinking and Judgement ESB Electricity Supply Board ESF European Social Fund EU European Union FDI Foreign Direct Investment FTSE Financial Times Stock Exchange GM General Manager GPMU Graphic Print and Media Union HR Human Resources HRM Human Resource Management IBEC Irish Business and Employers Confederation xi

xii Acronyms

ICT IDA IDG IFSC IMI ISO IT IWP KPI KSG LMI MBA MBTI MD NAV NCI NIHE NUJ ODC PA PC PESTEL Plc PR RTE SCA SE SME STEM SWOT TCH THEA UCC UCD UK USA VP WIT WLR

Information Communications Technology Industrial Development Authority Irish Distillers Group International Financial Services Centre Irish Management Institute International Organization for Standardization Information Technology Irish Wire Products Key Performance Indicator Kylemore Services Group Landmark Media Investments Master of Business Administration Myers-Briggs Type Indicator Managing Director Net-Net Assets Value National College of Ireland National Institute of Higher Education National Union of Journalists On Demand Communication Press Association Personal Computer Political, Economic, Social, Environmental and Legal Public Limited Company Public Relations Radió Teilifís Éireann Speciality Coffee Associate of Europe Societas Europaea Small to Medium Enterprise Science, Technology, Engineering and Mathematics Strengths, Weaknesses, Opportunities and Threats Thomas Crosbie Holdings Technological Higher Education Association University College Cork University College Dublin United Kingdom United States Vice President Waterford Institute of Technology Waterford Local Radio

Biographies

Author Biographies Chris  O’Riordan  BA, FCA, MBA, PhD, Lecturer in Accounting, Head of Centre for Management Research in Healthcare & Healthcare Economics, Waterford Institute of Technology (WIT). Chris previously co-edited a book entitled Managerial Challenges in Irish Organisations: A Case Study Collection and has co-authored cases in other books. He is a two-time winner in the European Foundation for Management Development case writing competition, and publishes on topics including leadership, healthcare management and entrepreneurship. Felicity  Kelliher BBS, MBA, PhD, Senior Lecturer in Management, Co-founder of RIKON Research Group, Waterford Institute of Technology (WIT). A former Fulbright Scholar, Felicity has previously co-authored two books and numerous journal publications on topics related to owner manager capability development and small business network engagement. She is currently Chair of the Irish Academy of Management (2017–). Patrick  C.  Flood  BComm, MBS, PhD (LSE), Professor of Organisational Behaviour, Dublin City University (DCU).

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A former Fulbright scholar, Patrick holds the DCU President’s award for both teaching and research. His 12 previous books include Change Lessons from the CEO: Real People, Real Change and Persuasive Leadership: Lessons from the Arts. Malcolm Higgs  DBA, MPhil, CPsych, AssFellowBPS, Fellow of the Chartered Institute of Personnel and Development (FCIPD), Professor of Organisation Behaviour and Human Resource Management at Hull University Business School having formerly been Professor of HRM and OB at the Business School, University of Southampton. Prior to joining Southampton, Malcolm held posts at Henley Business School including Academic Dean, Director of the Leadership Group and Research Director. He has published a number of books and over 120 academic journal papers on topics related to leadership, emotional intelligence, change management and team behaviour, and is co-author of psychometric tests relating to Emotional Intelligence and Leadership.

Interviewee Biographies Anthony Dinan  Former MD of the Thomas Crosbie Holdings Group of family companies, which owned the Irish Examiner, Sunday Business Post and Irish Post newspapers and a number of regional newspapers and radio stations. Roland Koch  Former Minister President of the German State of Hesse, former President of the German Bundesrat and former CEO of Bilfinger SE. He is a non-executive director of UBS Europe (chairman), Dussmann Group (chairman) and Vodafone Germany. He is Professor of Management Practice in Regulated Environments at Frankfurt School of Finance and Management. Regina Moran  Former CEO of Fujitsu UK and Ireland, and Vice President and Head of Industries EMEAI at Fujitsu. She is a previous President of Engineers Ireland. Fiacra Nagle  Former CEO of O’Briens Sandwich Bars (which had outlets in Ireland, the UK, Europe and Asia) and former MD of Compass Group Ireland, part of the global Compass Group. Grace O’Shaughnessy  MD of Java Republic, a founder-led Irish coffee roaster. She was previously Bakery Manager at Kylemore and Operations Manager of Lir Chocolates.

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John  Teeling  Renowned entrepreneur and founder of Kenmare Resources, Connemara Mining, Cooley Distillery and Teeling Whiskey. Before this, he was an academic at UCD. Dennis Van Booma  CEO and co-founder of Procentec, a Netherlands-based SME and a key player in the network solutions market.

1 Introduction

“The best leaders tend to be outsiders who don’t have a great deal of experience” (Mukunda 2012, p. 30)

According to Anthony King (2002, p. 435), “Some of the most significant political leaders of recent decades have been outsiders.” Can we say the same about business leaders? What does being an outsider mean to the business leader, and what special value does the outsider perspective bring? This is what we seek to explore here, as we believe that these questions remain incompletely answered in the corporate world. Arguably, we are living now in an era where the concept of an “outsider” has taken on increased prominence in the public psyche. King’s words above are perhaps even more relevant today than they were when he initially wrote his paper, where he used the former British Prime Minister Margaret Thatcher’s career as a basis for trying to understand This chapter is written by Chris O’Riordan; Felicity Kelliher; Patrick C. Flood; Malcolm Higgs

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the outsider concept in the political world. This is evidenced by the more recent electoral successes of outsiders such as Donald Trump in the USA and Emmanuel Macron in France in shaking up the political establishment. Indeed, Macron’s closest challenger—Marine Le Pen—was also an outsider relative to the traditional parties who had long dominated French politics. The UK’s Brexit vote will see it leaving the European Union to become part of a select group of outsider, non-member nations within the continent. While one side to the ongoing debate surrounding this divisive issue argues that this will bring great opportunities and rewards, the counter argument raises fundamental issues and fears. Moving beyond politics, Leicester City Football Club’s success in winning the English Premier League in 2016 surprised the sporting world. Considered rank outsiders, the club had odds of 5000/1 to win the league at the outset, having narrowly managed to avoid relegation in the previous season. In spite of having a regular squad that cost less than had been spent on individual players in some of the bigger clubs, they prevailed where others failed. In this sense, one might suggest that the world has perhaps become if not more accepting of outsiders then at least more curious about them. One can reasonably acknowledge that they offer something different, less predictable, and have the potential to deliver positive outcomes in the right circumstances. However, they may also be risky, unknown and laden with unforeseen challenges. Whether this applies to the circumstances of the business world needs further exploration and understanding. The thinking behind this book stems from our own knowledge of—and previous interactions with—leaders of different organisations who have been, in some way, an outsider leader. Being viewed as an outsider may relate to someone’s culture, background, previous activities, training, family membership, gender and so on. What is very much of interest to us are the implications of being an outsider. Challenges and difficulties are likely to be faced by virtue of being an outsider, but what are these and how are they addressed? How do outsiders manage the transition process of becoming leader? Additionally, how does the outsider benefit the organisation and how can we foster such benefits? Do outsider leaders yearn to be an insider? Why do some choose, or end up in, positions where they are an outsider when

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the easy option might be to stay on the inside in their existing roles and organisations? Do they remain always an outsider, or does their status change with time? What can those who become outsiders learn from the experiences of others who have preceded them? From our research, these issues have not been fully explored in academic or practitioner texts, yet they are important and interesting topics to business practitioners, leaders, students and academics alike. We believe that to understand these perspectives we, as researchers, are required to speak directly with successful and established outsider leaders to hear their stories and capture their voices. Being an outsider is something that is experienced and lived. In our book, using interviews, these lived experiences are presented as separate narratives initially. Each leader and their leadership story is presented in standalone chapters, supplemented with other available sources as appropriate. Subsequently, we distil commonalities and themes from across these chapters to present our understanding of their experiences. This allows readers to access the stories as well as some of the broad lessons to be learned from these reflections. We have interviewed seven outsider leaders from the broad business world—across sectors, organisation sizes and cultures. This allows for an effective blend of profiles, backgrounds and contexts. The qualifying feature for inclusion is that we could identify—in advance—at least one way in which the leader could be construed as an outsider. That said, we entered into each semi-structured interview as interpretivists, open to identifying other features. The structure of the book is as follows. Chapter 2 reviews the literature surrounding the outsider concept and the outsider leader. We note that gaps exist and that further research is warranted. Subsequently, we present seven chapters, one for each of the leaders interviewed. Each chapter consists of a literature section that precedes the leadership story, which is specifically relevant to the story. In this respect, each leader-based chapter can be used to explore and to further one’s knowledge of outsider leadership and also to contemplate leadership more broadly. Each of these leader-based chapters closes with a conclusion and reflection section and a summary of some of the key findings, to help the reader to think more deeply about the story and what this means in a wider, perhaps even per-

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sonal, context. We close with Chap. 10, where we present a conclusion that brings together key themes that, we believe, require articulation and discussion in the context of existing literature. In doing this, we attempt to contribute to the debate surrounding the meaning of outsider business leadership and various aspects related to and stemming from outsider leader presence in organisations.

References King, A. 2002. The Outsider as Political Leader: The Case of Margaret Thatcher. British Journal of Political Science 32 (3): 435–454. Mukunda, G. 2012. Great Leaders Don’t Need Experience. Harvard Business Review, October, 30–31.

2 The Outsider Concept and Outsider Leader: A Literature Review

2.1 Introduction In this book, we are exploring the role of the outsider as a leader within organisations. This has been prompted by the extent to which we see—in the business and national media—interest in the impact (both positive and negative) that outsiders joining an organisation can have on that organisation and the people who work there, as well as—in many cases— the wider society. The literature on leadership is vast. Indeed, it has often been suggested that leadership is the most studied of any organisational phenomena. Despite this attention, this is an area of study where research findings are often contradictory, inconclusive and incomplete. The focus of the majority of these studies is clearly on elucidating the components of leadership that will result in positive organisational outcomes. In this

This chapter is written by Patrick Buckland; Malcolm Higgs; Chris O’Riordan; Felicity Kelliher; Patrick C. Flood. Some elements of this chapter previously appeared as part of O’Riordan, C., Kelliher, F., Flood, P.C. and Higgs, M. (2017) “The ‘Outsider’ Leader in Business: Towards a Greater Understanding,” Irish Academy of Management Conference Proceedings, Belfast.

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quest, academics point to the challenges of complexity that are growing in today’s volatile, ambiguous and uncertain world. At the same time, practitioners are seeking simple solutions—a search for the Holy Grail of leadership—to a complex issue. It is perhaps this search for a simple means of achieving improved organisational performance that lies behind the view that an outsider can provide the leadership required to produce results. Given this, it is surprising that research has paid little attention to exploring the nature of outsiders as leaders and more specifically what we mean by the term “outsider.” In this chapter, we examine the nature of an outsider in a leadership role within the literature and hope that by expanding our understanding of the term we can make sense of the role of outsider leaders and the way in which they can contribute to an organisation.

2.2 Background and Rationale Ever since the dawn of social science, scholars have wrestled with the complicated and ambiguous nature of leadership. As a result, agreed upon clear and definitive definitions of the concept have largely remained elusive (Mullins 2010). Yukl (2010) attributes this difficulty to leadership having a different meaning for each individual, depending on their perspectives and situations. Therefore, leadership may be described as a social construct that exists only in the mind of followers and other stakeholders and cannot exist independently from the follower’s perceptions (Winkler 2010). Effective leaders craft an environment where individuals consistently perform to the best of their ability (Cooper 2009; Studer 2013; Yukl 2010). By influencing the perceptions of followers on an emotional level, leaders persuade them to suppress their individual short-­term interests in the pursuit of a joint objective that is in the best interest of the group (Hogan et al. 1994). By “setting the direction of change,” leaders play the crucial role in determining the strategic direction of an organisation, and therefore they have a substantial bearing on organisational outcomes—whether that be the survival, growth or deterioration of an organisation (Conger and Kanungo 1998; Kotter 2001, p. 4).

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An emerging critique of leadership theorising and research is the dominance of the “heroic model” (Avolio et  al. 2009; Higgs and Rowland 2011). Within this discourse, it is argued that the diversity of contexts precludes an unambiguous understanding of the nature of effective leadership due to the leader-centric focus. As a result, the literature abounds with contradictory and inconclusive findings in terms of the nature of effective leadership. Responding to this critique, scholars have suggested that the adoption of a relational approach to understanding leadership may be more promising (Uhl-Bien 2006). This could certainly provide a useful frame for the consideration of outsider leadership as one of the challenges that they face is to develop effective relationships with followers when they move into the leadership role. Although research in the field of leadership has been expansive and wide-ranging over the last number of decades (Rusliza and Fawzy 2016), it is still undetermined whether leaders who originate on the outside—be that at organisational, industry or sectoral level—perform differently to those who originate elsewhere. To date, much of the available literature investigates the outsider leader through the narrow lens of CEO succession events, while defining the outsider leader as one merely being from outside the organisation (Borokhovich et al. 1996; Chung et al. 1987; Dalton and Kesner 1983; Davidson et al. 2002; Ocasio 1994; Jiang et al. 2013). This limited approach fails to comprehend the broad and undulating nature of “outsiderness” as a concept and the fact that it is more nuanced than this simple positional view. Furthermore, the empirical studies that have been conducted have been of varying quality (Giambatista et al. 2005). Existing research has produced mixed results when attempting to establish whether insiders or outsiders deliver better corporate outcomes. For example, Zajac (1990) maintains that insiders provide better post-succession outcomes, while Shen and Cannella (2002) find that outsider successors are negatively associated with operational performance after appointment. On the other hand, Lauterbach et al. (1999), Karaevli (2007) and PricewaterhouseCoopers (2016) have found that outsiders can perform better. This research addresses widely held business perceptions that CEOs of large, publicly quoted companies do not stay in the role for long, constantly seeking lucrative new opportunities (Tonello et  al. 2009). The

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resulting movement of such CEOs is likewise confirmed in academic research in a US context (Murphy and Zabojnik 2007). In relation to the movement of CEOs, the mode of recruitment is analysed, with practitioners promoting external recruitment as a panacea (Karaevli and Zajac 2013). However, more recent research in the UK (Rejchrt and Higgs 2014)—in a study of the FTSE 350 companies—has found that the majority of succession events involved internal appointments: up to 64% of FTSE 350 CEO appointments were internal. Rejchrt and Higgs argued that as the mean age of current CEOs was 52.5 years, this offered support for the concept of boards continuing to favour the appointment of new CEOs with a similar age profile and perceived values characteristics in an expectation of strategic continuity. With internal being the preferred mode of recruitment and retirement (or the portfolio career option of a non-executive directorship) as the probable move following CEO service, they hypothesised that similarity-attraction is the dominant paradigm in which boards operate in CEO successions (Schneider 1987). Furthermore, they found no significant performance differences between the internally and externally appointed CEO successors. However, the general findings are that similarity-attraction (Davidson et al. 2006; Zajac and Westphal 1996) appears to continue to be dominant, as boards seek to appoint successor CEOs on the basis of similar demographics and perceived values congruence. This tends to contradict the popular belief that outsiders provide a clear basis for improving organisational performance outcomes. However, it does suggest that the common reality is that even outsiders are not so outside in terms of desired values and characteristics when contemplating organisational leadership. These contradictions in empirical findings are a common theme throughout the topic. The mixed results are in part due to the performance consequences of outsider versus insider having been measured in various ways, such as organisational change (Villadsen 2012), productivity (Liang 2016), stock price (Chung et  al. 1987), strategic change (Karaevli 2016) and return on investment (Shen and Cannella 2002). Although different metrics were used in these studies, much of the empirical research narrowly measures the performance of new leaders in terms of financial performance, neglecting other important factors such as the

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cultural implications of an outsider assuming a leadership role (Georgakakis and Ruigrok 2017; Liang 2016; Shen and Cannella 2002). Little has changed in succession research since Carlson (1961, p. 227) described the insider/outsider “variable of origin…as gross and unrefined.” This leads some commentators to believe that the outsider/insider leadership dichotomy is still viewed in “overly simplistic” and “binary terms” (Hogan et al. 1994; Karaevli 2007, p. 682; Louis 1980, p. 234). Additionally, most of the empirical research has been centred in North America and focused predominantly on very large firms. As a consequence, these outsider leader studies may be less pertinent to smaller firms or in a European or global context. Within the leadership literature, there is a continuing debate around the impact that leaders have on an organisation’s performance. The view that the impact is direct has been widely challenged (Higgs and Lichtenstein 2010; Kempster and Parry 2011). The “relational” leadership paradigm has found that the leaders’ impact on performance is more indirect, resulting from relationships with followers and the creation of a positive psychological climate (Uhl-Bien 2006). However, there is a measure of agreement that the effect of leaders on performance is real. Despite the profound influence leaders can have on the performance of their firms, it is surprising how little theoretical development and empirical research has been conducted on the concept of the outsider leader, and the implications of introducing these individuals into a commercial setting (Kesner and Sebora 1994; Miller 1993; Villadsen 2012). Confronted with the current state of enquiry, some authors maintain that more in-­ depth and detailed research on the topic of outsider leadership is warranted (Giambatista et al. 2005; Karaevli 2007). It is this call for more understanding of outsiders as leaders that we explored in the research that underpins this book.

2.3 “Outsiderness” Above we have looked at the debates around the issue of outsiders as leaders. We now turn to an exploration of what is meant by “outsiderness.” This is particularly important given that, above, we have seen that the

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CEO literature explores outsiders as CEOs but then suggests that similarity-­attractiveness theory operates in terms of ensuring that outside appointments share similar characteristics, attributes and values/norms as the insiders. This apparent paradox seems to warrant establishing greater clarity around what is meant by an outsider.

2.3.1 The Social Group Humans are profoundly social creatures who typically have an incessant yearning to belong and develop meaningful relationships with other individuals within various social groups (Williams et al. 2014). Being part of social groups is therefore an inescapable feature of human society (Sacco and Bernstein 2015). We all belong to various groups: families, work groups, religious groups, sports teams, formal and informal groups (Ivancevich 2017). Membership in social groups has been found to have positive outcomes on the wellbeing of an individual, including positive implications for both physical and mental health, as well as helping individuals acclimatise to difficult life transitions (Buckingham et al. 2013; Reicher 2006; Tajfel and Turner 1979). Insiders are also most likely to be successful and motivated when they develop a strong sense of belonging, relatedness and kinship with other members of the group (Faircloth and Hamm 2005). Membership in social groups is “central to the way people experience and respond to change because they furnish them with a sense of social identity” (Haslam et al. 2008, p. 672). Social Identity Theory (Tajfel and Turner 1979) argues that membership in a social group is not extraneous to an individual’s sense of identity. We tend to define ourselves by the groups of which we are members or to which we have an emotional attachment. By being involved with and having regular interaction with a group, an individual may begin to speak and act like other group members and adopt the values, beliefs and norms of the group in order to be accepted as an insider (Furnham 2015). This assimilation of a group’s culture affects how individuals perceive themselves and others around them (Haslam et al. 2008; Oakes et al. 1987). Furthermore, as members of a group, individuals tend to pigeonhole other groups and their

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­ embers—they compare other groups values against their own to gauge m their social classification. These classifications can often be exaggerated by individuals to “maximise” both the similarities of the in-group and the differences of the out-group and their outsider members (Buckingham et al. 2013, p. 1132). This would suggest that insiders may exaggerate the difference between outsiders and themselves when in reality the differences may be minor or not exist at all. However, group research has frequently established that the in-group/out-group dynamic can lead to a range of negative outcomes that can impair overall group performance (Higgs and Lichtenstein 2010).

2.3.2 The Outsider in Society and Popular Culture The concept of an outsider has been a common feature throughout much of the world’s history, literature and popular culture (King 2002). From accounts of prejudice towards lepers, tax collectors and Samarians in the Bible (Talmage 2016), through the tales of Shakespeare’s Othello and Mark Twain’s Huckleberry Finn and, more latterly, in the Harry Potter books, Hermione Granger who was ostracised by her “pure blood” peers as an outcast because of her non-magical parents (Rowling 1997), the outsider appears prominently. There are many other examples of this theme in literature, film, art and music which present a romantic conception of the outsider—one who is a misfit, a rebel who does not fit society’s expectations, such as Mersault in Albert Camus’ French novel L’étranger or James Dean’s character in the 1955 movie Rebel Without A Cause. Such images of an individual who does not follow the same rules as anyone else have resonated with many audiences, especially young people who frequently identify as outsiders as they grow emotionally and physically (Yep 2005). We are even seeing the outsider concept becoming a prominent one in Western politics, with the recent elections of candidates to powerful leadership positions who would be viewed as not part of the traditional establishment and, in some cases, less than conventional in their approach. However, despite its prevalence in society and popular culture, the social construct of the outsider remains mostly obscure and unexplored in social science (King 2002; Williams et al. 2014).

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2.3.2.1  Outsider Factors To date, little is known about what makes individuals in social groups consider themselves insiders or outsiders (Stamper and Masterson 2002). Factors that have been identified include culture, nationality, social class, race, education, gender, religion, family background, previous experience and tenure, attitude and perspective, personality, and importance to and position in an organisation (Cormier 2006; Eagly 2005; King 2002; Moore 1988; Stamper and Masterson 2002; Thorndike 2012; Unger 2000). According to Thorndike (2012), not only are outsiders different from insiders but they are also different from other outsiders. In this respect, an individual can be an outsider on multiple dimensions (Adler 1997; Mayo et al. 2006). Furthermore, the practical consequences of the dimensions themselves may change over time. For example, during the process of socialisation, newcomers to a group will likely be perceived and feel like an outsider. However, this will usually change over time as they become socially accepted and valued by their peers (Thomas and Anderson 1998). The significance of the various outsider factors themselves may also change over time. For example, within an organisational setting, birthplace and religion have become less critical as distinguishers in the twenty-fist century while education has increased in relevance (Mayo et al. 2006), suggesting that the concept of the outsider also has an evolutionary dimension.

2.3.3 Outsider Types A number of types or categories of outsiders have been suggested in previous academic works. King (2002) highlights the social outsider (outside the group), the psychological outsider (feels personally that they are an outsider) and the tactical outsider (a conscious choice) in a political context. There may also be other types of outsiders (Furnham 2015; see Sects. 2.4.1 and 2.4.2 below) depending on how they react to the situation(s). However, further research is needed to determine if additional types or sub-types exist. Interestingly, King (2002) suggests that outsider types are not mutually exclusive, indicating that a complex blend of outsider types exist in reality and that it may be a mistake to pigeonhole individuals,

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which could result in an erroneous oversimplification of the concept. We now turn to explore the types referred to by King (2002) in some more detail.

2.3.3.1  Social Outsider Social groups each have their own rules. These rules outline the accepted behaviour the group is willing to tolerate (Becker 2012). Social rules may exclude certain individuals or sub-groups from membership, based on the outsider factors discussed above. If a current member of a group is discovered breaking group rules or is even perceived to be breaking the rules, they may be considered different or unusual by their peers, and, depending on how much “idiosyncratic credit” the individual may have accumulated, they may be branded an outsider or an outcast by the group. In this regard, they may have specific privileges revoked or suspended; they may even be expelled entirely from the group (Becker 2012; Furnham 2015). Idiosyncratic credit is described as how much the insider is …allowed to flout the rules, but only once you have built up enough credits that involve rule following, towing the line and being squeaky clean. You have to show a respect for, and adherence to, all the codes, norms and rules of the group before you are allowed to break them. (Furnham 2015, online)

Individuals who are denied social group fellowship can experience a diminished sense of belonging and are seen to be more likely to experience stress, anxiety and depression (Levett-Jones and Bourgeois 2015). Although being a social outsider may be distressing to some, this is not always the case. King (2002, p. 438) argues that being a social outsider may, or may not, have any emotive connection: “It may merely be a fact, or it may be an emotionally charged fact.” Furthermore, some social outsiders may not wish to be social insiders. Ryan (2007) highlights this point by referring to Irish emigrants in Britain. Being Irish expatriates, some have no desire to be considered British, considering their “Irishness” as an essential feature of their personal identity. However, in work and other social settings, they may conform to social expectations and obey

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social rules that would lead to perceived insiderness and acceptance. This would appear to suggest that within specific constraints and depending on the setting, some individuals have a choice whether or not to be perceived to be a social outsider—indicating that in reality, a blend of outsider types may exist (Unger 2000).

2.3.3.2  Tactical Outsider A tactical outsider is an individual who chooses to be an outsider. These outsiders need not be a social or psychological outsider; however, it is more probable that the individual would be either or both for them to be comfortable and successful in using this tactic (King 2002). Considering the value placed on social affiliation, it may seem counter-intuitive to choose to become an outsider. However, despite the possible negative social and psychological ramifications of being an outsider, there are several circumstances in which a person may deliberately choose to be or to act like one. Individuals often decide to be an outsider to further their own agendas or ambitions, which may only be attainable by going against the grain and following a different path (King 2002). Similarly, Gladwell (2008, online) contends that being a tactical outsider allows for the playing of the “middleman minority role.” For example, if an individual opens a store they may start off with certain social obstacles. Family or friends may feel that due to their relationship with the individual they are entitled to preferential treatment such as a family discount, free product or credit. The store owner may find it difficult to refuse because of potential social consequences. These conflicts of interest can make it problematic to run a business efficiently and to make a profit, as both business and social identities are intertwined. However, outsiders do not have this constraint within these close tie relationships, they can refuse any perceived owed benefits without having to worry about any social consequences. Even though being an outsider leader may be beneficial in some ways, it can also lead to undesirable consequences. Examples of this point are far from uncommon in organisational life, particularly when introducing strategic change, where outsider leaders ignore the existing cultural norms with often damaging consequences. Thus it is unclear where the weight of evidence lies on this matter, and this will be explored further shortly

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when considering both the advantages (Sect. 2.6) and challenges (Sect. 2.7) of outsider business leaders.

2.3.3.3  Psychological Outsider King (2002, p. 438) defines this outsider type as a “person who, whatever the objective situation, feels him or herself to be an outsider.” Objectively, an individual may acknowledge their insider status and act as such within a group; nevertheless, the feelings of not belonging or “fitting in” remain. Therefore, a psychological outsider may not necessarily be a social outsider. Individuals have a unique combination of numerous characteristics and traits such as ethnicity, gender, weight, height, and professional and educational status to name just a few. Many of these personal traits may not be readily visible to the casual observer. However, these traits, seen or unseen, influence how individuals perceive and value themselves (Quinn and Earnshaw 2013). Quinn and Earnshaw (2013, p.  41) classify an individual’s characteristics into two types: Concealable and Non-­ Concealable Stigmatised Identities. They argue that factors such as race, sex and other physical attributes are apparent to the social group, but factors such as religion, social class and education are potentially concealable. In other words, the individual may or may not choose to make specific attributes known depending on the social rules in effect at the time or in a particular situation. When choosing to withhold specific attributes from the group, they in effect become a “reverse tactical insider,” displaying only the attributes valued by the group and withholding those that may be perceived to threaten their insider status. This behaviour is opposite to the tactical outsider, who purposefully displays behaviours and attributes that set the individual apart from the group (King 2002). Nonetheless, as Unger (2000) argues, although some traits may be concealable from others, they have a profound impact on the individual’s perception of being a psychological outsider. Quinn and Earnshaw (2013, p.  46) suggest that the magnitude to which an individual considers themselves an outsider depends on the following:

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1. The “Centrality” of the attribute, which is the extent an individual feels that the attribute defines them as a person. For example, a person might consider being overweight as a minor aspect of his or her self-­ identity. However, a different person might consider being overweight as important socially, they may feel shame, or even self-loathing and consider themselves an outsider because of the negative stereotypes associated with being overweight, even though objectively this may not be important within the social group. 2. The “Salience” of the trait, which is how often the individual thinks about the attribute. Some individuals may think of a characteristic many times a day, and some may rarely think about it. The salience and centrality of an attribute invariably contribute to the level of psychological outsiderness a person experiences. Psychological outsiderness may have originated at some event or series of events in a person’s past. These events may have impacted that individual to the extent that they feel like they do not belong. Some commentators maintain that some of these feelings of not belonging originate with childhood experiences such as bullying, rejection or just being different. They can be a significant contributor to feelings of outsiderness, which, for whatever reason, can follow an individual into adulthood and have a substantial influence on how they confront and react to their outsiderness (Kelsey 2015; Oliker 2012). Although the psychological aspects of outsiderness can be seen from an attribute or trait perspective, there is also relevance in considering this from a social psychological perspective through the lens of self-identity theory. Within self-identity theory, identity is an important aspect of one’s self-concept that answers questions such as “who am I?” and “who do other people know me to be?” (Ibarra et al. 2014, p. 286). In essence, self-identity theory posits the concept that we have multiple identities and in differing situations differing identities are salient. It can also be that in a given situation there is dissonance between competing identities. At a simple level, a leader may face competition between their identity as a family member and a work role identity (work-life balance) and  fulfilling one identity may cause dissonance with another equally

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salient identity. In the area of relational leadership, research has been exploring the role that identity plays in terms of how individuals perceive themselves as leaders, with an emphasis on the socially constructed process through which individuals internalise a leader identity as a part of their self-concept (DeRue and Ashford 2010). Others argue that identity and a sense of self is in part derived from the organisations or workgroups to which people belong (Hogg and Terry 2000). Thus, there is an interplay between identity and group membership. This would seem to be particularly pertinent to an outsider becoming a leader within an organisation.

2.4 Outsider Reactions to Being an Outsider Furnham (2015, online) highlights the critical difference between choosing to be a member of a group—for example, a Goth or Vegan—and being “assigned membership by fate”—for example, gender, race or ability. Regardless of their outsiderness being a result of circumstances or choice, individuals have the power to choose how they react to being an outsider. However, Kelsey (2015, p. 63) argues that because of a fear of failure, “downward mobility is a common lifestyle choice for outsiders.” Some individuals might feel it may be an easier path for them to remain socially ostracised rather than trying and ultimately failing to fit in. In part, this could be a result of an external identity having greater salience than the identity associated with group membership. In a similar vein, some may have a self-identity of being a “rebel” and refusing to go with established norms and practices. As a result, some outsiders may also feel they do not belong in mainstream society and may find themselves in minority groups with similar values where they may feel most comfortable. However, Kelsey (2015, p. 68) also notes that some outsiders refuse to view their outsiderness as a disadvantage. They choose to achieve and pursue excellence and view their outsiderness as an advantage or edge, thus developing their unique “brand of non-conformity.” The following sub-sections will explore some of the possible social paths and reactions individuals may take to being an outsider.

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2.4.1 The False Insider Some outsiders attempt to “pass off” as insiders of a social group: “The idea is to reject the real you, become an insider, at least from the outsider perspective” (Furnham 2015, online). The “passer off” or “false insider” acts in a certain way to promote an image that they perceive will advance their insider status. Sociological commentators have referred to this process as “anticipatory socialisation.” Individuals that adopt this approach are usually socially well informed and acutely aware of the norms and rules of a group (Colman 2008). Outsiders can attempt to adopt socially promoting behaviours to appear as an insider, even though as an outsider these behaviours and attitudes are not yet genuine, much like an actor on stage performing for an audience. Local vernacular and outward expression are used to communicate an image of the “public embodiment of their adopted self-images” (Miller 1984, p.  145). Passing off can both facilitate entry into a group and aid the process of adjustment once an insider (Colman 2008). However, this approach requires considerable effort to sustain due to a constant strain of maintaining the deception (Furnham 2015). At the beginning of their tenure with a new firm, outsider leaders may lack necessary firm- and industry-specific knowledge (Karaevli and Zajac 2012). The amount of firm and cultural knowledge a new CEO possesses decreases proportionally to the increased level of outsiderness of the CEO (Karaevli 2007). Depending on their level of outsiderness, a new CEO may be reluctant to expose their lack of knowledge, as this might be viewed as a lack of competence and may threaten the legitimacy of their authority. By exposing their ignorance, new leaders may feel they are risking not being taken seriously, due to a lack of expertise power (Shapira 1995). Thus, a new leader may adopt behaviours at least initially to appear and act as an insider CEO should, by displaying a confidence and pseudo competence that may not yet exist, in order to reinforce their legitimacy (Miller 1984). It may also be that the outsider CEO uses a tactical approach to mask their lack of knowledge—for example, coming in with specific views and strategies that ignore or challenge the norms, culture and so on of the firm. A new CEO always seems to bring in a change of strategy. Perhaps this is a conscious effort or tactic to hide away

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or distract from others what they don’t know—by emphasising strongly what they do (whether this change is needed or not). Furthermore, the narrative around their appointment, for example being introduced as coming to the post with a fresh pair of eyes, may amplify their enacted outsiderness. Furnham (2015) asserts that some outsiders may also delight in being outsiders; for example, when an individual goes on holiday abroad they might wear clothing such as their home national football jersey, or insist on their home country’s cuisine while abroad. In addition, Furnham (2015, online) identifies “flip-flopping, one day an insider one day an outsider.” An individual may flip-flop to experiment socially or just for sport, which can prove disruptive for the outsider’s peers (Furnham 2015).

2.4.2 The Mediator Furnham (2015) recommends that individuals could, instead of flip-­ flopping, decide to embrace both the insider and outsider perspectives in a mediation approach. Ross et al. (1990, p. 105) define mediation as “a dispute resolution procedure where a third party attempts to assist two or more disputants in reaching an agreement.” Having mediation skills is a vital competency of an effective leader (Bagshaw 1998). A mediator must be able to remain neutral (Stulberg 2012). The act of mediation requires one to be objective and unbiased. Consequently, this role can suit the outsider, and indeed at times a mediator must be an outsider to arbitrate efficiently between two or more parties (OTM 2017). Mediators are usually proud to be an outsider, as they have learned to be flexible and embrace multiple cultures (Furnham 2015).

2.5 The Outsider Business Leader It is assumed that the effective business leader is one who should be an insider and team player, who possesses in-depth organisational knowledge (Kirkpatick and Locke 1991), and has developed relationships of

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trust that generate commitment and loyalty from followers (Ahn et al. 2012; Vaid 2015). In contrast, as previously discussed, outsider leaders may initially lack essential firm-specific knowledge that assists in the navigation of organisational and cultural complexities. They may also lack the enduring relationships and earned credibility that forms the foundation of mutual trust (Manderscheid 2008). Nonetheless, the fact remains that some of the most outstanding leaders in modern times have been outsiders (Thorndike 2012). This disparity has led some authors to question the commonly assumed link between superior performance and the insider leader (King 2002; PricewaterhouseCoopers 2016). Equally, the assumption that an outsider leader is required to rescue or transform a firm’s performance is not borne out by research (Rejchrt and Higgs 2014) that indicates no differences between the performance of inside and outside CEO appointments. As previously mentioned, much of the literature on the topic takes a narrow view of the outsider leader, focusing on CEO successions, describing the outsider leader as one who has come from outside the organisation. Finkelstein and Hambrick (1996) suggest that the insider/outsider concept should be regarded in terms of a scale rather than the extremes of the insider/outsider dichotomy. For example, an insider of two years may be considered more of an outsider than an insider of 30 years, although they both may be deemed insiders (Karaevli 2003). Shen and Cannella Jr (2002) draw closer to the idea of a “spectrum of outsiderness” by identifying the following types of insiderness/outsiderness. In this context, we can perhaps see how—over time—the outsider can transition to an insider and, potentially, a leader: 1. Follower insider are the planned insider leaders who will replace their predecessors once they retire. 2. Contender Insider are insiders who ascend to leadership after their predecessors are dismissed. 3. Outsiders are individuals from outside the organisation and are selected because no appropriate insider can be identified. Karaevli (2016, p. 279) also identifies the “double outsider,” who not only originates from outside the organisation but also outside the industry or

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sector. This, undoubtedly, presents additional challenges and opportunities for both leader and organisation, with further hurdles to negotiate as part of the transition. Although prevalent in the literature, the description of the outsider leader as one from outside the organisation fails to encompass the full breadth of the outsider leader concept if we consider what an outsider can be construed as from Sects. 2.2 and 2.3 above. Therefore, an outsider leader may also be described as an individual whose behaviour is different to the established and accepted interpretation of a leader, one who may have conflicting views to the norm, or one who rails against the established dogma. Thorndike (2012) further describes some outsider leaders as “iconoclasts,” which historically means “smasher of icons” and nowadays means to be proudly unconventional. Therefore, from the existing business literature, an outsider leader may be defined in two ways: 1 . A leader who is sourced from outside the intended organisation. 2. The iconoclastic leader whose behaviour goes against the cultural norms and established rules (Thorndike 2012; Kelsey 2015). These two outsider leader categories are not mutually exclusive. A leader sourced from outside an organisation may not necessarily be iconoclastic. Similarly, an iconoclastic leader may be an organisational insider; however, they may be considered an outsider by his or her peers (Thorndike 2012). It can also be reasonably assumed that an outsider leader that joins a new organisation may unavoidably be both types of outsider, as the outsider will have different ways of doing things than the accepted norms, at least initially. Therefore, the leader may be perceived to be iconoclastic by those within the organisation until socialisation occurs—and perhaps even beyond. Although there is a perception that there is an increase in the proportion of firms recruiting their CEO and senior leaders from outside their organisation or industry, as previously noted, the evidence from Rejchrt and Higg (2014) suggests that internal appointments continue to dominate CEO succession. However, despite this, there is a growing interest in the causes and the consequences of leadership turnover and succession in business (Liang 2016). Thus, there is a need for greater understanding of

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how leader outsiderness impacts on organisational performance and whether the risks are worth the rewards (Mukunda 2012), for both individuals and organisations. The following sections will examine some of the possible consequences of introducing an outsider leader into an organisation. It is notable, however, that the existing business literature largely restricts the discussion around this to the merits and demerits of outsiders as successor leaders as opposed to the lesser heralded, but equally relevant, other varieties of outsiders that can exist (aside perhaps from gender, which is growing in prominence as we will explore latterly).

2.6 P  otential Advantages of Hiring an Outsider Leader The “outsider-leader has the potential to be a destructive force as well as a constructive one” (King 2002, p.  454), as the unique attributes of the outsider leader interact with the complex and numerous economic and organisational factors of the firm (Lauterbach et al. 1999; King 2002). On the positive side, an outsider can bring a fresh perspective and new mental models into an organisation (Ford et  al. 2016; Kelsey 2015; Villadsen 2012). Furnham (2015) suggests that outsider leaders may be shrewder, more perceptive and better at reading the situations, as well as better negotiators, than insider leaders. Outsider leaders are highly valued for their fresh perspectives (Kesner and Dalton 1994). They are relatively free from being entrenched within the norms and culture of a firm. Subsequently, they are less likely to be affected by social acceptance and peer pressure. Free from “tangled relationships,” and with assumed originality and innovation driving their decision making, the outsider leader may be better able to lead significant changes (Nickisch 2016, online; Liang 2016; Villadsen 2012). They bring new blood into the organisation, which may add vitality and strategic curiosity, and they can be beneficial in an actual or looming crisis situation (Clutterbuck 1998) or be sought after by lowperforming businesses (PricewaterhouseCoopers 2016). Outsiders also bring with them inter-organisational and possibly inter-­ sectoral experience. The outsider leader with experience from diverse, competitive environments is more likely to take risks, confront major

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obstacles and have a “healthy disregard for established practices” (King 2002; Lublin 2017, online). Additionally, bringing prior experience and norms provides excellent learning opportunities for the firm (Villadsen 2012). Moreover, outsiders also carry with them their previous social ties; these contacts are usually associations with leaders from other organisations or industries and may include valuable connections with other societal stakeholders. Such connections, according to Villadsen (2012), have a noticeable positive effect on firm performance.

2.7 Outsider Leader Barriers to Success Hiring outsider leaders is not without risk. By their nature, less is known about their abilities, skills and personality characteristics, and how they will integrate into an existing organisational culture (Karaevli 2007). As discussed previously, one of the main criticisms of and stumbling blocks to the performance of outsiders in business leadership roles is their lack of firm-specific knowledge and possible lack of familiarity with the industry (Karaevli 2007; Liang 2016; Shen and Cannella Jr 2002). According to Karaevli and Zajac (2012), this lack of tacit knowledge can counteract their efforts of initiating change needed for growth. Following the introduction of an outsider leader, the top management teams are often in a state of unrest and tension, as the existing managers may feel sub-standard, afraid or even hostile towards the new outsider leader (Shen and Cannella 2002). Equally, the outsider may be narcissistic and paranoid when faced with the unusual challenge of being an outsider and a leader (Mukunda 2012). This situation presents potential problems for both the outsider and the top management team members in an organisation. The top management team members can be hampered by their experiences and loyalty to their previous leader, resulting in being attached to the status quo. As a result, they may engage in resistance towards strategic or organisational changes instigated by the outsider leader. Many new outsider leaders do not have the resources and access to the human capital that was available to their forerunners, resulting in a higher dependency on other managers within the top management team for information and support (Miller 1993). The expectation is that these

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managers will act in the best interests of the firm by integrating the outsider leader, although relational criteria may impact this expectation in practice. In other words, incumbent managers may undermine the outsider’s power to make favourable changes within the organisation, or possibly even seek to further their own agendas (Glad 2009). Some top managers may leave the organisation following an outsider succession, for example, due to being passed over for promotion, disagreeing with the new leader’s approach or the perception that they failed in some capacity and wanted a fresh start. However, the loss of these managers can offset the rewards that come from hiring an outsider in the first place (Chung et al. 1987; Shen and Cannella 2002). To be effective leaders, outsiders must develop new working relationships and acquire critical knowledge rapidly. All the while, the new arrival must contend with a difficult transition at both the organisational and personal levels (Ciampa and Watkins 2005). This can result in the path to success being particularly challenging for the outsider, with high attrition rates along the way (Mayo et al. 2006).

2.8 In Defence of Insiders In supporting the virtues of insiders as leaders, Chung et al. (1987) put forward two arguments. First, insiders have specific knowledge on markets, competitors, customers and organisational culture. This enables the insider to have a better understanding of the complex environment and make suitable decisions (also Bower 2007; Kotter 1982). Second, insider leaders already have the social networks, support and credibility needed to perform their duties. It can be argued that insiders facilitate a smoother changeover and negate the potential for disruption (Carlson 1961). Additionally, Liang (2016) points out that leaders gain credibility and power by making implicit contracts with subordinates, by promising advancement or other favours. An outsider is unable to commit credibly to honouring their forerunners promises, and therefore they cannot usually benefit from them. However, an insider can benefit from these contracts since they have already been investing in such contracts and relationships, and are associated with them by virtue of their presence. As noted earlier, in the area of CEO succession, the operation of the similarity-­attraction

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paradigm (Schneider 1987) is dominant in business (Rejchrt and Higgs 2014), suggesting that a degree of alignment with the organisation’s values and culture is sought in such appointments. Insiders understand the culture and values that are already in place, thus reducing their propensity to commit unpopular faux pas (Clutterbuck 1998), and are less likely to “miss the subtle clues about what’s important here” (Bower 2007, p. 70). The best new leaders according to Bower (2007, p. 93) are a “hybrid” of the insider and outsider leader. They are insiders who have cultivated an outsider perspective. These leaders might be from the same organisation but originating from a different division or country, affording them an outsider perspective of the firm. They have the advantage of both types of leader, having in-depth firm-specific and organisational cultural knowledge, while remaining detached with a willingness to confront issues. The “outsider-insider” may also enjoy a reduction in the resistance to strategic change, as outsider viewpoints are more readily accepted when they come from a socially comparable individual (David and Turner 1996). This translates into a smoother leadership transition than what a pure outsider would experience, while also avoiding many of the barriers faced by outsiders such as lack of familiarity and credibility (Lauterbach et al. 1999; Manderscheid 2008). Developing insiders who maintain their outsider perspective may prove difficult; when a leader first views the situation in an objective and unbiased manner, challenges and opportunities are typically more easily seen (Geiger 2015). Over time, though, the individual will begin to become blinded to issues, much like getting so used to a smell or a sound that you no longer perceive it (Geiger 2015). However, according to Birshan (2016), by continuing to question purposefully, viewing the firm through an outsider lens and promoting cross-industry learning, insider leaders can cultivate a fresh or an outsider perspective of their firm.

2.9 Gender and Outsiderness Having considered a range of types and categorisation of outsiderness, it is important to turn to one very large grouping in which outsiderness is seen to be far too dominant in organisational life, and very specifically in

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terms of leadership. In recent years, gender equality has become an increasingly significant topic for organisational and social research. Historically, men and women generally adopted the culturally established gender roles, but this is changing. Currently, women enjoy a growing presence in the workplace compared to past decades, with a 65.3% employment rate across the European Union (EU) (European Commission 2017), and make up just over 50% of the EU population (Eurostat 2017). However, at board level on the largest publicly listed companies in the EU, less than 24% of members are female (European Commission 2016). Despite the significant influx of women into public and private organisations, women find themselves at a disadvantage as a result of the social and organisational barriers to women assuming top leadership positions (Bird 2011). Although the rights of women have been recognised in many countries for some time, in reality discrimination and inequality towards women in the workplace endures in society, either on a conscious or an unconscious level (Kjaerum 2012). Consequently, women face an arduous uphill struggle as they attempt to further their careers and advance to senior leadership positions within their organisations (Diehl and Dzubinski 2016; Kalaitzi et al. 2017; Kirrane et al. 2016). There are no shortages of academic literature on the gender inequality issue (Rincón et  al. 2017). Contemporary literature examines barriers such as gender stereotypes of leadership (Biernat 2003; Koenig et  al. 2011; Palermo 2004), organisational culture (Diehl and Dzubinski 2016; Moore 1988; Reed 1983), and organisational structures (Haile et  al. 2016; Palermo 2004). Some authors such as Diehl and Dzubinski (2016) criticise much of the research to date for focusing on a relatively small number of barriers primarily found within organisations, despite calls for broader societal research to consider the consequences of social structures on women in the workplace (Biernat 2003; Callahan 2007).

2.9.1 Gender Stereotypes in Leadership Outward gender stereotypes are perceived to communicate social information about individuals’ value, ability and worth (McDonald et  al.

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2004). These stereotypes are culturally determined and have consequences within all social groups (Webster Jr and Driskell Jr 1978). Gender biases arising from cultural and societal beliefs about gender are usually subtle and often unintentional, as they are reinforced by gender norms and traditions ingrained within an organisation’s culture, and society as a whole (Bird 2011). Such gender trait stereotypes continue to prevail in society and organisational cultures. These include women being associated with traits such as compassion and kindness, while men are linked with attributes that are culturally perceived to be more related to leadership qualities such as assertiveness and competitiveness (Eagly and Carli 2007; Eagly and Johnson 1990; Koenig et  al. 2011; Ryan and Haslam 2005). It is argued by some that these social and cultural perceptual barriers continue to inhibit women’s ability to view themselves as business leaders and the capability of others to see them as leaders (Diehl and Dzubinski 2016). However, as leadership thinking moves towards a more relationally anchored paradigm (Uhl-Bien 2006), these traditional male-related leadership attributes associated with “heroic” leadership theories are beginning to break down. Indeed, research has tended to show that women are more likely to be effective within a relational leadership framework than men (Alban-Metcalfe and Alimo-Metcalfe 2000).

2.9.2 Female Leadership and Outsiderness The relatively small percentage of women who have been successful in breaching the glass ceiling and made it to the top leadership position continue to feel like “outsiders on the inside” (Cormier 2006). Pressure is growing from society and groups such as the World Economic Forum (2014) calling for gender equality to be adopted as a “business imperative.” It is therefore remarkable how little research currently exists on how female leaders perceive themselves and how they experience leadership roles (Karelaia and Guillén 2014). Research has found a positive relationship between women being represented on company boards and financial performance/shareholder value (Eastman et  al. 2016; Lückerath-Rovers 2013; Post and Byron 2015) by bringing different perspectives, potentially leading to better

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decision making. However, other studies appear to contradict such results, finding instead a negative or no significant relationship (Boubaker et al. 2014; Carter et al. 2010; Dobbin and Jung 2011), making this an area of continued and inconclusive debate. The different management styles of women can lead to a particular sensitivity to certain practices such as corporate social responsibility and environmental politics (Campbell and Minguez-Vera 2008; Nielsen and Huse 2010), allowing for a greater diversity of skillsets and perspectives than might otherwise exist at senior levels in organisations. However, if the promotion of women to board positions or senior leadership is a result of social pressure, women can potentially be viewed as “token” leaders in a male-­ dominated organisation: such status can negatively affect how women are perceived and treated as well as having a negative impact on board performance (Campbell and Minguez-Vera 2008; McDonald et  al. 2004). Interestingly, this negative experience is not usually encountered by male “token” leaders when the situation is reversed (McDonald et al. 2004). Kanter (1977) points out that women leaders often experience increased visibility, social segregation and higher performance expectations. Biernat (2003, p. 1019) explains that this is because of the following: When one judges individual members of stereotyped groups on stereotyped dimensions, one does so with reference to within category standards.

As a result, when leadership roles are defined in feminine characterisations, women tend to receive positive feedback. However, when evaluated against traditional or masculine measures of leadership, women’s leadership performance is also often perceived to be lower than that of their male counterparts (Ryan and Haslam 2005). Consequently, female leaders often receive closer scrutiny than do their male peers (Eagly and Carli 2007; Eagly et al. 1995; Ryan and Haslam 2005). Williams (1992) contends that some women leaders feel left out of important informal leadership and decision-making networks. Attempts to integrate leave some women feeling ostracised and unwanted by their male peers. Cormier (2006) also found that women leaders often feel like outsiders and experience isolation and loneliness. Similarly, McDonald et al. (2004, p. 401) found the following:

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Women leaders tend to feel isolated, to be contrasted against their male peers, and to experience heightened pressure to perform well, both when they are members of a male-dominated workgroup and when they are tasked with leading such a group.

Cormier (2006) highlights two causes of the feelings of isolation that many women leaders encounter. First, women can find it difficult to fit in with the male culture that is prevalent in today’s business world. Second, women leaders are lacking in relationships and social networks that are often asserted to be critical to leadership. People bond through networks both within their organisations and beyond them. As previously discussed, status bestowed by society infiltrates social exchanges and may play a substantial role in determining leadership status and group members assessments of an individual (Webster and Driskell 1978). The above explores outsiderness from a group that can experience all of the elements we have already explored, along with specific additional components associated with their gender. In this regard, we believe that the concept is of considerable and growing importance in the context of female leadership and thus worthy of further study.

2.10 Conclusions In the current chapter, we have considered the issues associated with outsiders as organisational leaders. In terms of the rationale for appointing outsiders to leadership roles (particularly CEO roles), we have explored the arguments that an outsider can bring enhanced performance to the organisation. Research evidence, particularly from the CEO succession literature, provides a very mixed picture. However, we have outlined that there are real benefits that an outsider can bring to an organisation as well as some barriers and challenges that have to be faced. While there is an extensive interest in leaders as outsiders, particularly in senior roles, we have highlighted that research exploring this phenomenon in detail is almost completely absent from the leadership literature. This is a gap that we are setting out to address in this book. In order to

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begin to do this, we have, in this chapter, explored the nature of outsiderness and shown that it is far more than just a leader who comes from outside of an organisation. It is a multi-faceted concept and this needs to be understood in order to gain a greater appreciation of the benefits and challenges of outsider leaders in today’s complex and dynamic organisations operating within the business domain.

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World Economic Forum. 2014. The Global Gender Gap Report 2014. Geneva: World Economic Forum. Yep, L. 2005. The Outsider in Fiction and Fantasy. The English Journal 94 (3): 52–54. Yukl, G.A. 2010. Leadership in Organizations. New Jersey: Prentice Hall. Zajac, E.J. 1990. CEO Selection, Succession, Compensation and Firm Performance: A Theoretical Intergration and Empirical Analysis. Strategic Management Journal (1986–1998) 11 (3): 217–230. Zajac, E.J., and J.D. Westphal. 1996. Who Shall Succeed? How CEO/Board Preferences and Power Affect the Choice of New CEOs. The Academy of Management Journal 39 (1): 64–90.

3 From Politics to Business: How Wide Is the Leadership Gap?

This case is particularly unusual insofar as the leader studied has interspersed his business-leader career trajectory with periods as a successful political leader. As such, he believes he is perceived as an outsider leader in the business domain due to his previous public roles. This may be partly due to the visibility of political leaders at national and international level. Political leaders are the most universal, recognised and talked about element of political life (Blondel 1987) and as such, those who fill these roles may be perceived as ‘career politicians,’ potentially creating a professional barrier when seeking to change their leader context. However, once one looks at the features of political leadership in greater depth, complementary skills exist between those that optimise political- and business-leader roles. Each requires a level of personal power, instruments that facilitate the use of that power and a sound relationship with colleagues and citizens to enhance their impact in a particular setting (Blondel 1987). Assuming a pre-established organisation, the leader is influenced by  the institutions they work in (Tempel and Walgenbach 2007). This chapter is written by Chris O’Riordan; Patrick C. Flood; Felicity Kelliher; Malcolm Higgs © The Author(s) 2019 C. O’Riordan et al., Outsider Leadership, https://doi.org/10.1007/978-3-319-97463-7_3

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Leaders can assume a variety of roles in this context, including that of stabiliser (Kindleberger 1988) or, in contrast, destabiliser. Influencing skills are required in both a political- and business-leader role as the outsider seeks to embed themselves in the specific leader context. A leader may alternatively focus on structure, honing their skills as experts in translating the possession of material resources into institutional bargaining tools (Young 1991). Normally, the political leader’s bargaining effort focuses on reaching agreement on the provisions of institutional arrangements covering particular issues (Young 1991), and this approach is easily transposed to the business environment. Because the leader acts as an agent of parties that are principals in the bargaining process (e.g. the state or business stakeholders), it is natural for such leaders to espouse institutional arrangements that seem well suited to the interests of the stakeholders they represent (Young 1991). By applying an integrative bargaining approach, the outsider leader goal is to embed themselves and their stakeholders in the predictive process. This can help gain collective agreement, affording all parties a sense of collegial ownership when alternative institutional arrangements are applied. Institutional bargaining as a leadership skill is therefore of equal value in politics (Young 1991) and business (Coen 2011), with some equating large firm actions to those of political actors in the EU (Coen 2011). In either case, institutional bargaining refers to efforts on the part of autonomous actors to reach agreement among themselves on the terms of constitutional contracts or interlocking sets of rights and rules that are expected to govern their subsequent interactions (Young 1991). In this chapter, our focus is on outsider leader behaviour “that can be identified without reference to the outcomes flowing from institutional bargaining” (Young 1991, p.  286). Applying this lens, the outsider leader seeks to instil a new regime through their behaviour in an effort to influence established culture. Occasionally, institutional bargaining contracts take the form of broad, framework agreements, encompassing the basic order or ordering principles of an entire social system (Young 1991). This system can exist at country or business level. The leader’s goal in either environment is often to challenge established systems or institutionalised expectations to address an optimal input–output balance. This takes us

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to  the concepts of business-systems theory (Tempel and Walgenbach 2007), also found in Chap. 5. According to the systems concept, a leader in either domain (politics or business) becomes more adept at exploring legitimate tactics to set new best practices in adaptive strategy over time (Goodman 2011), suggesting that transferable leader skills exist between the two contexts.

3.1 R  oland Koch: From Politics to Business— Crossing the Leadership Chasm 3.1.1 Background “Most people only know the politician Roland Koch. And therefore always speculate about his political career. But I also started businesses, worked as a business lawyer and sat on supervisory boards. I also know the other Roland Koch. That’s why I’m more optimistic than you.”1 Roland Koch, Interview with Stern.de, 27th August 2010 (Kinkel and Schütz 2010, online). Roland Koch was born in March 1958  in Frankfurt, Germany. He initially studied and trained to be a lawyer, like his father before him, qualifying in 1985, and went into practice in his own law firm. In parallel with this, Roland developed an interest in politics, which continued to grow. He filled the vice-chair role of the Christian Democratic Union (CDU) party’s federal youth organisation. He then stood as a CDU representative in the 1987 election for the legislature of Hessen and was elected. Hesse is one of sixteen federal states in Germany, with a population of over 6 million. In terms of area, Hesse is the sixth largest of the federal states. After four years as a representative, Roland was appointed as chairperson of the CDU parliamentary group. Following the 1999 state elections, he was elected Minister President of Hesse and President of the German Bundesrat (the upper house of the national parliament). In 2006, with Angela Merkel as chairperson, Roland was elected as one of four vice-chairpersons of the CDU party nationally. Roland Koch  Translated from German using Google Translate.

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resigned as Minister President in August 2010, indicating at the time that he wished to pursue other opportunities—in business—and stating, “I did not make my decision out of boredom. It is a decision of reason”2 (Von Wrangel and Zastrow 2010, online). He was appointed CEO of Bilfinger Berger, one of Germany’s largest construction groups with a turnover of €8 billion and made up of over 500 individual companies, in October 2010. This came as something of a surprise to many commentators, with Roland himself quoted at the time as stating that there is “a regrettably low tendency to change between business and politics”3 (Gersemann 2010, online). During his term, Roland instigated a name change and rebranding (to Bilfinger), and a move away from construction and towards more service-oriented offerings including maintenance, catering, equipment supply and running data centres. The process had been started by Roland’s predecessor, as the group had been in heavy acquisition mode for a number of years, and it was now his responsibility to seek to integrate all of these elements under one very large umbrella. This was far from easy, as the notions of partnership and greater exchange were new to many at individual company level, and presented early challenges with some personnel leaving because of differences of opinion. Under his stewardship, 2011 saw Bilfinger’s best ever result, with profit growth of 6% (Seidel 2012). However, this trend did not continue as sectors that Bilfinger were heavily vested in—such as energy—turned negatively, while construction—from which it had mostly retreated—was now booming in Germany. In August 2014, after two profit warnings within six weeks, Roland chose to depart from Bilfinger because he felt as though he was being seen as too responsible for the profit warnings to be strong enough in upcoming strategic discussions with the supervisory board. Since then, he has set up a law firm in 2015, specialising in regulation issues. He also holds a number of board memberships, including the Dussmann Group, Vodafone Germany and UBS Europe (of which he is also Chairperson of the Supervisory Board). Roland continues to live in the Frankfurt region and was a CDU delegate at the Federal Convention to elect the German President in 2017.  Translated from German using Google Translate.  Translated from German using Google Translate.

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This case primarily looks at Roland Koch, the business leader, but it is impossible not to also consider Roland Koch, the political leader, as they are closely intertwined. Indeed, we can see that there is great learning to be brought from one role to the other—they are not as distant or distinct as one might imagine. However, in transitioning from politics to business, Roland has faced a number of challenges, including how to manage the perception of some that he was a complete business ‘outsider’ and did not belong in that domain. Thus, integrating and attaining the acceptance of insiders is a prominent theme here. Roland speaks of his approach on entry into new roles, as he strives to get a strong understanding of the new location, how it works and its people. This has served him well on many occasions. However, even with such an effective and tried-and-­ trusted strategy, problems are inevitable, and one that Roland has encountered is getting people aligned around a common objective. As an outsider, this presents additional problems—including resistance—but also opportunities as the new leader enters without bias or in-house history. Instead, the outsider has a vital asset in their armoury—experience—that, when deployed appropriately, can be highly advantageous. But, it is also important to acknowledge that experience alone is not enough and that the outsider should not get carried away on arrival: stability, predictability and consistency can help with steadying the ship, initially at least. Roland also demonstrates how challenges to the leader from the outside can actually be planned and how this helps to keep the leader in check and on track. However, when these challenges are unplanned or unexpected, they can be highly problematic.

3.1.2 G  aining Acceptance of Insiders: A Critical First Step Roland accepts that over his career, he has been viewed as an ‘outsider’ on a number of occasions, given the many different roles he has filled: lawyer, politician, business leader, board member, chairman and adviser being some of the highlights. He acknowledges that it can be something of a double-edged sword for an organisation to try the outsider route: “challenging, risky but also promising…with the experience, the tool kit,

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able to deliver, it can be very healthy for a company.” Thus, there can be a degree of reluctance, preferring at times the safety of an establishment figure who is already embraced on the inside. A major challenge that Roland faced in this regard, on departing the political arena, was being accepted as a businessperson. While known publicly as a high-profile politician, he feels that this was a very narrow perception and hard to shake off at times. Roland argues that for over two-thirds of his more than 30-year working life, he has operated in the business world. In this respect, he appears to have been pigeon-holed somewhat, which he does not subscribe to, and this has made him appear more of an outsider and different than he feels he is: I know that having this high public awareness as a politician all that I am doing in business today is seen as a politician that now is in business and not as a business person that worked for 11 years in politics. So, I’m often very [aware personally] with this world of the outsider.

Indeed, when he departed from Bilfinger, some contended that this was proof that an outsider cannot be successful in the corporate world and that leadership skills are non-transferable between different contexts (something that will be explored later). This reflects a biased view that, naturally, Roland disputes and has sought to dispel and challenge with his subsequent roles in UBS and Vodafone: Basically, people don’t like outsiders coming in because this seems to be an underestimation of the capabilities that people have within a certain industry or a certain enterprise, things like that. I think it can be helpful, and I have to accept that I am very often seen as such.

Given potentially negative prevailing attitudes and the desire to belong, the new leader needs to tread carefully on entry and recognise their natural limitations. It would be a mistake to believe that “my outside knowledge is the most important thing that I can offer,” as this may create a ‘them and us’ divide from the outset. As a consequence, the outsider should focus on how what they bring to the organisation becomes “an additional value, not an alternative value” and seek to bring this subtly into the mix rather than appearing to challenge everything.

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The outsider, if they want to be accepted on the inside, also needs to demonstrate their commitment to the new role and organisation, indicating that they are there for the long haul, as acceptance is a process and based on developing trust. Crucially, they need to remember that while their track record and accomplishments may be valuable and demonstrate real potential, and possibly opened doors for them, this exists in the past and needs to be converted to something tangible and worthy in the present. Early wins can be helpful here.

3.1.3 Integrating New Hires: Think First, Act Later The importance of gaining acceptance is also very noticeable in the context of hiring people from outside the organisation. Roland does not just want entrants who are competent (“fundamentally, they have to know what they are talking about”), but also those who will integrate into the existing system and team, and who recognise the criticality of doing this. This requires a degree of modesty and humility, acknowledging that those who are already there are actively contributing to the organisation. In most cases, Roland is uncomfortable with the arriving outsider who says, “…tell me where I have to go and I will cure everything. I promise you I will reach the goals you set for me, whatever it takes.” He has little faith in such an attitude, which appears arrogant and naïve in equal measure and is likely to cause more harm than good. Instead, Roland prefers someone more reflective and careful, who has looked beyond the immediate timeframe in terms of what they are doing to avoid rash and unpredictable decisions. The new recruit—at least initially—needs to row in with the existing organisational landscape, observing how things are currently done before taking action. This is not to say that dynamism is always shunned. Where the business is experiencing a crisis or needs some form of turnaround, immediate action may be the appropriate way to go but not in the normal case when stability and caution are valued: Sometimes you need that because you need people who are directly crossing the wall, not looking for a door. But, normally I like people who are interested in doors and carefully opening and closing them.

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Thus, while an outsider may be understandably enthusiastic and want to make a name for themselves, it appears that a greater emphasis on thinking carefully over acting impetuously is broadly preferable. This may not be the outsider’s natural instinct, but they need to contemplate the environment that they are moving into: a stable organisation requires a different approach to one that is in relative chaos and the outsider should have the capacity to assess the situation before acting.

3.1.4 The Outsider’s “Deep Dive” Strategy Roland’s strategy, on entry, is to “deep dive.” By this he means getting involved in the organisation at a detailed level on a full-time basis for a period of time, and embedding in a work sense with the existing team as quickly and smoothly as he can. As noted above, he recognises that although he brings much with him from the outside, within the confines of his new location he is less informed than he needs to be to really lead. Thus, the notion that he would “sit at a desk and do some research about percentage figures and reports” does not suit his style or ethos. Instead, by jumping in to the engine room of operations, he gains the respect of insiders by demonstrating to them that he values their knowledge and experience and wants to learn from them. As a consequence, Roland acquires greater legitimacy and credibility when seeking to implement decisions. This also helps to clarify that, while an outsider now, he wishes to be an insider in the future and establish real working relationships with those in situ. In essence, the outsider needs to demonstrate that they should not be viewed as a disruptive threat to the norm but as an opportunity that is suitably informed when instigating positive change. At the same time, Roland indicates that he is also able to bring his outside perspective to bear at a detailed, deep level; not only is he gaining an understanding but he also has scope to impart an unbiased view on how the work is being performed: In the beginning, when I joined the bank it was a new environment. Indeed I was very active in designing the federal laws during the crisis of 2009 and 2010, but I was not a banker. I was just a lawyer. Then,…I decided when I

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joined as chairman of UBS, I worked for two and a half months, full time, in the bank, worked through all the departments, went with our client advisors and tried to understand not only what they do but also how they are doing it. In what atmosphere they are working. That’s when I joined Vodafone, it was the same [approach as] Bilfinger. But it was also when [you] run a large entity in the State of Hesse, there’s administration but I like to go very deep.

In this context, a “deep dive” strategy makes sense and, as Roland demonstrates, is not size dependent. That said, the time required to engage at such a detailed level must be made available to the leader and could be considerable in the early transitional stage when they already have much to deal with.

3.1.5 A  lignment Behind a Common Objective: Old Ways, New Thinking and Culture Clashes For the arriving outsider, a critical task is to attain organisational alignment and participation around a shared vision and objectives. Roland acknowledges that this is not immediate, but is rather “a process, it has to bring people together, to accept that they have to have a common strategy, but also to be persuaded that is the common strategy.” An initial challenge that Roland faced was addressing the lack of coherence and commonality that existed between the different entities that made up Bilfinger. This arose because the group had previously “collected a lot of companies by acquisition, but they were not really co-ordinated or organised to the question of what is a common vision of a servicing company.” As an outsider coming in, he was able to diagnose the issue quickly and seek to rectify it strategically through collective sharing of agreed objectives. The leader is central here but should anticipate disagreement and resistance from some quarters as people have developed patterns and approaches that they are comfortable with but which may not be optimal for the collective: “the companies have very good ideas, perfect people to work, but they all wanted to work in their isolated isles.” In this context, it is about making a compelling, convincing argument for change that can be understood by those on the inside but that is also inclusive and

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respectful of existing knowledge and experience to engender the necessary collective trust in the initiative. A core requirement for any leader is that, within their organisation, others are pulling together in the same direction, seeking to achieve the best outcomes for the business. In Roland’s experience, this has not always been the case in the entities that he has joined, in part because the seeming logic behind their interactions—or lack of interactions—has not been adequately questioned. He notes that when he started in Bilfinger, he entered a scenario where sub-contractors were being hired in for particular jobs. This was not an issue in and of itself, but what was a problem was that the very competencies needed were already available within the group. The rationale behind this was that, as Roland explains, “…they were afraid that when they are working with an internal sub-contractor, they had to be fair” when it came to pricing and profits. If they were dealing with an outside sub-contractor, they could seek to squeeze them further and get what appeared to be a better deal for the division. However, the business and its shareholders overall could conceivably suffer in this context if internal divisions had the capacity to do the work for little or no additional cost (to the group) but were crucially not asked to quote: When you are not successful in bringing things together; when we don’t like to co-operate, it can damage a lot. When you are able to overcome that and you start in the same direction, that can be extremely beneficial figure wise. But, to do that, is difficult.

In this regard, the interests of the division could potentially be placed ahead of the company because people did not appear to want to ask the right questions or have the necessary conversation; it was seemingly easier to go outside and fight, rather than have the same discussion constructively inside. The thinking behind this approach existed seemingly unchallenged within the organisation and may have become an almost accepted practice for some: I saw a lot of companies where they said, I will find an argument to sub-­ contract with you because for sure we don’t want to subcontract with our own company. This is not politics or business, it is human beings.

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As the arriving leader, Roland needed to address this by taking control of the situation and getting internal personnel to think and act differently, through creating positive “partnership” relationships within the organisation. Such relationships needed to be built upon a collective trust, rather than conflict, between each other to benefit the business. This necessitated a combination of appropriate incentive systems to help promote and reward greater co-operation and partnership, and setting the “tone from the top” that reinforces the absolute necessity of this approach as a formal change in policy. As an outsider, he was coming into the environment without bias or preconception, not seeking to take sides but simply to redirect everyone back to what should be their core aim: the interests of the group. Helpfully, he had previous experience of a similar issue in his political life to refer back to, highlighting that while unusual, unexpected and unhelpful, this is not an isolated problem: I experienced that thing where three ministries were approaching the same third party, saying “that we want to co-operate, but one pre-condition is that you are not allowed to co-operate with the two others.”

3.1.6 Leveraging the Experience Asset Roland’s leadership education has been both formal and through practical application. In his early years, he gained some initial experiences in such a role when he was the deputy chairperson of the national youth organisation of the CDU party. This was a safe and small environment in which to cut his managerial teeth but also one where he developed his interest in regional representation. As a full-time politician subsequently, he has learned how “to make compromises, to represent ideas to the outside world, to work through critical times”—in essence, the softer side of leadership and getting things done. In his capacity as a lawyer, he has developed a solid understanding of laws and rules, and what is and isn’t permissible. This was particularly relevant in his roles in Bilfinger and UBS, both of which function in highly regulated sectors. Roland has merged these elements “with the economic education that I would have tried to get in parallel” and “a basic education in structures,” to give him the skillset to be a leader in different contexts. Overall, he regards his

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diversity of experience and consequent outside perspective as “one of my real advantages in life…my competitive advantage,” though, as previously noted, he does not seek to overemphasise either of these on entry. In the organisations that he has worked in, Roland has found that the mechanics of business on the ground can be very different. With Bilfinger, the long-term nature of the offerings means that “when you talk about being one of the builders of nuclear power plants, you are talking about offers ten years ahead. So the question is, when you’ve won, even when it contributes to your P&L, it is far away.” Alternatively, in Vodafone, the impact of market interventions can be much shorter: “It’s like a joystick, where you can decide with advertisements…between 24 to 36 hours to see the result in your turnover.” However, for the leader, the approach is consistent, regardless of the nature or dynamism of the organisation or sector. Roland contends that those at senior levels need to focus primarily on the mid-term and beyond. As a result, their lack of sectoral or organisational experience from not having risen up through the ranks is not as critical because for them the operational knowledge that they are lacking is less important to their role over time once they have a base understanding. Instead, the outsider leader needs to be able to discuss with people at a broader, more reflective level and understand where they are coming from. This requires a different knowledge and mindset, which is acquired and refined in other contexts through having done this before: Tell me about your perspective and tell me what you want to achieve in a mid-term perspective. Then, I can see whether you are in line with that or how far your actual path is differing from [what] your predicted path was, but not from one to the next week, [instead] looking to permanent cash returns or permanent cash conversion figures.

Ultimately, the leader’s primary focus then has to be on the long-term bottom line, and the contributors to and outcomes of this: “What the bureaucrat and the advocate has to learn at the end is that the figures count…all that we do at the end is for profitability, for market shares, for brand recognition.” In this respect, Roland believes that leadership needs to be pragmatic and practical, with realistic and tangible performance goals that are worthy of pursuit: “otherwise you are a theoretical guy not

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accepted by those who are in business…weaklings, which are not efficient, productive or profit making.”

3.1.7 The Virtues of Predictability A degree of pre-existing internal stability is helpful for the arriving outsider as they enter an environment where they lack location-specific experience. What they are bringing is an approach that has its foundation in previous contexts and organisations but that may not have been tried in the current organisation. This may be viewed as a risk by the organisation and its members because of its novelty to them, but the new leader has confidence in its suitability from having been down this road previously: Where I was most experienced was to manage difficult situations in slicing, analysing and being precise in decisions. Over the time, what I could add was an experience-based certainty that the structures I suggested will work.

In this regard, the outsider leader is introducing fundamental changes that are naturally going to have an impact. If the organisation is already in a state of flux, with other alterations to the senior team also happening, this would be a very challenging environment in which the new leader seeks to introduce a revised approach. Thus, it is preferable that—at least temporarily—this is the only major change that is happening; any other changes needed can follow suit laterally. Ultimately, senior outsider leaders in organisations appear to desire stability where possible, regardless of the type of business or sector. In this regard, the ‘cut and thrust’ of day-­ to-­day matters are more the remit of those at lower management and operational levels: Investment bankers will never understand such a kind of leadership and also people in sales in the mobile business will not understand that. But those who are in the senior leadership of companies, who have to assemble these, appreciate that in a way it generates a certain kind of stability which they need in their leadership environment.

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In this vein, when leading a team, Roland emphasises “persistent leadership.” This means having clear goals that do not change from day to day and having very predictable principles, creating a sense of consistency and maintaining common alignment. As a result, those he works with know what to expect “because they know that is along a certain system of how to do it [make the decision],” facilitating delegation of some responsibility. Empowering one’s staff is important to Roland, as he ascribes to co-operative and participative leadership and a desire to give relevant experience to others. In this regard, he wants his direct reports to be able to make choices independently, but within established parameters: “which is acceptable for all the rules [as set by him as leader].” By being “relatively sure what my final decision should be,” he argues that a virtual system is implemented which acts as a guide as to what is appropriate in various circumstances. In this way, Roland can stand back from the detail and focus on the outcome, confident that everyone knows what to do: I try, in the way I interact with people, to give them the chance to do it themselves and I like people who want to do it themselves. Whenever I have a chance to empower them, and to promote them or whatever, I like it.

This also helps with matters around succession, as Roland believes that his approach creates a variety of potential heirs for his position down the line and an extension of the existing stability. While others might not subscribe to this view, fearing that they may in fact be a threat to the leader, he does not agree and sets out early with a succession agenda in mind. This is potentially good for the company, particularly where this creates a degree of consistency in a period of change: For example, when I was at Bilfinger, the first thing I did was to exchange one member in the management board and brought in the one I thought was at the right age and, from my perspective, in the right mood at the end to have the capability to follow in some years. I left too early, so now he is the CEO of one of the split and sold parts of the company, so it’s fine. But I wanted to have one beside me at least.

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3.1.8 C  hallenges from Outside: Planned and Unplanned The once outsider but now established or establishing insider leader cannot rest on their laurels. Being at the top of the organisation, they are exposed to many different challenges from within and without. In the context of challenges from outsiders, a key factor is whether these challenges are mounted in a constructive manner or not. Roland has experienced both, with very different outcomes. When it comes to hiring senior people to work with him, Roland prefers those “who are representing the sceptic part” and who will challenge his opinions constructively in a planned way. He describes himself as “optimistic,” and sometimes “over-optimistic,” when it comes to business but argues that this is necessary as he often faced others who were overly pessimistic. Being aware of his own preponderance in this direction, he has been able to take action that he feels is appropriate. Thus, bringing in other perspectives acted as a means of counter-balancing and controlling his own natural instinct. He is also being pro-active, instead of waiting for the naysayers to come along and criticise his decisions too late. In this respect, as leader, he seeks out challenging perspectives akin to the way that outsider views challenge potentially insider biases to ensure that choices are blended and realistic in context. This acts as a form of selfcontrol and moderation for Roland, adding further pragmatism and credibility to the choices and decisions that he makes because they have been challenged already: In my roles, I always needed a CFO [Chief Financial Officer] or a partner or whatever who was annoying me with all the arguments against… I respected them. Also in government, my dearest friend personally but also a very responsible person in the government, we discussed nights about the question. I always said as fast as possible and he always cried, wait a moment. Only this combination created the necessary stability that people had the necessary [security] to follow you…I want to have a realistic approach in a world where the need for fast changes is nearly everywhere.

However, challenges from the outside may not be planned or even welcomed. Roland’s departure from Bilfinger came about after a series of

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profit warnings over a relatively short timeframe that he took ultimate responsibility for as CEO, culminating in his resignation. The decline in results was caused by external factors, but he was already in a difficult position between shareholder groups. An investor had been acquiring shares in Bilfinger over a period of time. Although now an established insider, with supporters on the board, the presence of an outsider as a threat over him meant that circumstances were unlikely to improve and his capacity to control and lead was compromised, and thus Roland felt that he had no alternative: I was strong as long as the figures were right, but then we had the oil crisis which means that—for a company that had a significant stake in servicing oil companies and oil platforms in the North Sea, directly we were impacted. At the same time, the energy policy more and more affected not only Germany, but also other countries in Europe which did not any longer plan to build or refurbish power plants, which was a part of our core business. So, the figures declined in a very spontaneous way, because the turmoil in the oil-markets and the uncoordinated disruption in Central European energy-markets at the same time were not the outcome of a long industrial development, it was the spontaneous change in prices and orders. And, that was then the …the battle about strategies becomes more aggressive and I decided not to run this battle because I didn’t think you have a chance when there is, at that time, a more than 20% stake of a shareholder of a public listed company using the situation to foster its own controversial plans and I therefore resigned after three years.

In his farewell letter to all company employees, Roland warned against splitting up the company (Mannheimer Morgen 2016). Two years after his departure, all building and facility management activities were sold (Bilfinger 2016) representing one third of the company’s total assets.

3.1.9 Conclusion and Reflection Roland Koch has had, and continues to have, a very varied, busy and eventful working life. He has attempted what few have tried—moving from politics to business. The challenges of this transition cannot be underestimated, particularly when the political role has been high profile at national level. Politics, by its nature, is divisive, as we have seen many times through history and continue to see at present. As the Minister

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President of Hesse and a senior member of the leading CDU party in Germany, Roland was in the media gaze constantly and—like all ­politicians—had to face down challenge and even criticism for some of his decisions and actions. Thus, even before changing careers, he already had experience of being on the outside (even as a political insider) and the arduous task of achieving acceptance. Some commentators were dismissive of his joining Bilfinger as CEO, contending that the two domains are incompatible. As Roland notes, however, he had been in business before he entered politics and he argues that the skills he attained as a state leader—such as compromise, setting goals and driving change—were just as relevant in leading a large company. From this, we can see that boxing off and labelling an outsider because of their past is a premature and limiting move. What is more valuable is considering the portfolio of skills and competencies they have built up and whether these are compatible with the needs of the organisation. Roland himself identifies how, on arrival, he found Bilfinger to lack a degree of co-ordination across the 500 companies that made up the group and this was manifesting itself in some potentially poor decisions around the use of external sub-­contractors. It took an outsider to question and challenge the logic of this and to introduce the requisite changes to align everyone around a common objective. However, what appears to have equipped Roland particularly well to address this was the fact that as a politician he had previously confronted something similar. Perhaps business and politics can mix after all! In common with many outsiders, we find that attaining insider acceptance and achieving a level of integration on arrival is challenging but essential. The entry of an outsider is already a shock to the organisational system and thus needs to be managed, to give the new entrant an opportunity to join the team but also to ensure that the team itself does not get carried away. Thus, a steady and stable arrival appears to be a good approach to adopt, initially keeping radical plans and changes to a minimum, unless the organisation is in such a bad state that there is no alternative. Indeed, this is not just the case for the leader but for anyone joining, as it is important to demonstrate a degree of humility and a respect for the insiders, their culture, their experience and their knowledge if one expects reciprocation. By adopting his “deep dive” strategy, Roland has been able to connect with the businesses at a detailed level so that he has an understanding of the operations and what people are

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dealing with. Equally, as the insiders get to know him and where he is coming from, pre-conceptions that may exist can be addressed. What appears to have helped here is that Roland executes this strategy at the outset, before he becomes mired in the formality of senior leadership. Importantly, the insiders have an array of advantages that the outsider leader wants to harness, such as vital knowledge of products and processes and connections with customers and other key stakeholders. These advantages will not be accessed where the new entrant displays arrogance or a visible attitude that their outside experience is their greatest asset and of primary importance. Certainly, such experience needs to be leveraged and can be of great benefit, as they come with approaches and perspectives that are unbiased and that have been effective elsewhere, but this must be handled sensitively. Immediate large-scale change can create uncertainty or resistance within the organisation, and aside from potential crisis scenarios this approach should be tempered by the outsider as they gain an understanding of the new organisation. Thus, predictability and a sense of ‘steady as you go’ can be the outsider leader’s friend, in recognising that consistency of approach and agreed processes allow everyone to focus on what they need to in the knowledge that this is acceptable and sanctioned. A further ally can be the use of planned challenges that seek to test existing arguments and perspectives as to the ‘way we do things around here.’ In this regard, Roland appreciates the input of friendly sceptical views as a means of balancing out his natural optimism. This helps to ensure that ideas are refined and dissected early by other’s perspectives rather than being subjected to intense debate and criticism in the external domain when it is less optimal to seek changes. Having been through many as a politician, Roland does not fear challenges but does acknowledge that when unplanned or unexpected, they can be difficult to address. His departure from Bilfinger was on the back of such challenges, with the added difficulty of an outsider potentially affecting his position. Summary of Some of the Key Learning Points from the Chapter • Business leaders can learn much from political leaders, as aspects of each role and how it is performed are portable and transferable between contexts.

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• However, those crossing the ‘chasm’ between both domains can expect challenges and being perceived as outsiders, something that can be hard to shake off. • Bringing in an outsider leader carries risks when compared to the safer option of the insider leader as the outsider may be unknown or unproven in that context, but can also bring rewards, promise and something new because of their prior knowledge from other contexts. • Outsider leaders need to find a way to be accepted by and credible to the insiders, and to integrate with them. This takes effort as the new arrival has to understand the place, the people, the processes and the culture, and demonstrate their commitment to their new role and organisation. • New entrants need to have and show respect for what already exists. A “deep dive” strategy can be valuable in this respect, for example by jumping into the engine room for a period of time to learn and connect but also to shape what is there already. • As an outsider, resistance and challenges from insiders and other outsiders can be expected. Some of this can be helpful in keeping the leader focused, but it can also be hugely problematic if unplanned, unexpected or unwelcome. • The outsider leader possesses experience from other contexts that can be very valuable, but it is important as well not to overstate this experience on arrival. • Steadying the ship and maintaining some consistency can be useful when arriving, to retain stability and avoid too much flux during a potentially difficult time. However, in times of crisis, a more dynamic and disruptive entry may be required. It is imperative that the outsider leader assesses which situation they are in early in their new tenure and adopts an approach suitable to this landscape. • Either way, some change is inevitable but this should be handled in a manner that makes this transition compelling and inclusive. The outsider can see things that others become blind to and can challenge and address these without bias by changing mindsets and relationships. However, they do need to take control of this process to see it through formally and attain buy-in from colleagues.

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• As the leader’s ultimate focus is strategic, an insider operational knowledge is less critical for them and essentially learnable to a sufficient level to guide strategic intent. • Strategy experience, knowledge of the tried-and-tested approaches and diversity of perspective that the outsider leader brings with them can potentially be of greater importance than internal technical knowledge, and success essentially rests on how outsider leaders apply this knowledge in bringing the business forward. • A style of leadership that is persistent and aligned to predictable principles can mean that those who are following know what is expected of them. This allows them to be empowered within well-understood parameters such that they can anticipate what the leader themselves would do. Additionally, this can help with internal succession. • Hiring in outsiders who think differently to the leader can be beneficial, as they challenge or test their perspectives and biases to bring more balance to decisions and choices.

References Bilfinger. 2016. Sale of Building and Facility, Bilfinger SE Company Presentation October 2016. https://www.bilfinger.com/fileadmin/corporate_webseite/ investor_relations/Roadshow_Presentation.pdf. Accessed Jan 2019. Blondel, J.  1987. Political Leadership: Towards a General Analysis. London: SAGE. Coen, D. 2011. The Evolution of the Large Firm as a Political Actor in the European Union. Journal of European Public Policy 4 (1): 91–108. Gersemann, O. 2010. Roland Koch, der Baulöwe mit Geschmäckle. https:// www.welt.de/debatte/kommentare/article10635342/Roland-Koch-derBauloewe-mit-Geschmaeckle.html. Accessed Nov 2017. Goodman, M. 2011. What Business Can Learn from Organized Crime. Harvard Business Review, November, 27–30. Kindleberger, C. P. 1988. The International Economic Order – Essays on Financial Crisis and International Public Goods, The MIT Press, USA, p. 157. Kinkel, L., and Schütz, H. P. 2010. Was Roland Koch jetzt lernen muss. https:// www.stern.de/politik/deutschland/hessens-scheidender-ministerpraesidentim-interview-was-roland-koch-jetzt-lernen-muss-3110276.html. Accessed Nov 2017.

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Mannheimer Morgen. 2016. Bilfinger Ex-Chef  – Warnung vor Zerschlagung Schon 2014. https://www.morgenweb.de/mannheimer-morgen_artikel,bilfinger-roland-koch-in-sorge-_arid,746035.html. Accessed Jan 2019. Seidel, H. 2012. Ex-Ministerpräsident Koch schafft Rekordergebnis. https:// www.welt.de/wirtschaft/article13866663/Ex-Ministerpraesident-Kochschafft-Rekordergebnis.html. Accessed Jul 2017. Tempel, A., and P. Walgenbach. 2007. Global Standardization of Organisational Forms and Management Practices? What New Institutionalism and the Business-Systems Approach Can Learn from Each Other. Journal of Management Studies 44 (1): 1–24. Von Wrangel, C., and Zastrow, V. 2010. Ich bringe eine politische Debatte auf Ja-nein-Fragen. http://www.faz.net/aktuell/politik/inland/im-gespraechroland-koch-ich-bringe-eine-politische-debatte-auf-ja-nein-fragen-1979785. html. Accessed Nov 2017. Young, O.R. 1991. Political Leadership and Regime Formation: On the Development of Institutions in International Society. International Organization 45 (3): 281–308.

4 Leading Within a Male-Dominated Sector: The Female Outsider Leader Landscape

This chapter looks at the evolution of an in-company leader trajectory through a female lens. While STEM (Science Technology Engineering and Mathematics) is traditionally a male-dominated landscape, recent statistics suggest that aggregate progress is being made, as 27% of engineers in the EU are women (Eurostat 2017). As this case looks at a large UK and Ireland subsidiary of a global IT service provider within which many technology engineers reside, it is worth looking at the specific professional gender landscape of these locations. The UK and Ireland lag significantly behind the EU averages: 11% of the UK engineering force (Women in STEM 2017) and 15% of Irish engineers (Engineers Ireland1 2017) are women. Lifting the lid on these Anglo-­Irish statistics, a recent survey among 3000 engineers based in the UK and Ireland (Engineers Ireland 2017) points to societal barriers as being a major factor in the under-representation of women in the engineering field: 86% of the surveyed engineers believe parents and school teachers This chapter is written by Felicity Kelliher; Chris O’Riordan; Patrick C. Flood; Malcolm Higgs  Engineers Ireland has 23,000 members incorporating all disciplines of the engineering profession in Ireland across industries, the public service, semi-state organisations and academic institutions. 1

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could do more to encourage more female students to take subjects ­leading to an engineering career and more than half believe that outdated attitudes, among both women and men generally, are obstacles, a view reinforced by Corbett and Hill’s (2015) US study. Once committed to the profession, a lack of female peer mentors within the education process and in early career also curtails female retention in engineering (Dennehy and Dasgupta 2017). Why is this imbalance an issue? In the absence of gender balance, specific perspectives, creativity and innovation skills shown by women may be lost (McKinsey 2015; Forbes Insights 2011). Gender-integrated science and engineering teams with a higher proportion of highly educated women are more productive in disciplines with a greater female representation (Joshi 2014). The gender anomaly may also be contributing to a tight labour market, and 61% of engineering employers claim that difficulty in recruiting engineering and technical staff with the right skills is a barrier to business. One report places the annual shortfall of the right engineering skills to be between 25,000 and 60,000 people in the UK alone (Women in STEM 2017), ironically ‘stemming’ the potential for optimised productivity in engineering and technology firms in these countries. These imbalances are partially embedded in history, as women are relatively recent participants into the engineering sphere. Alice Perry was the first woman in Ireland or Britain to earn a degree in engineering when she graduated from what was then Queen’s College Galway (Ireland) in 1906, heralding the formal inclusion of women within the profession in these countries. Perry was preceded by the first male engineer by approximately 4500 years, believed to be the Egyptian Pharaoh Djoser as he probably designed and supervised the construction of the Pyramid of Djoser (a Step Pyramid) at Saqqara in Egypt around 2630–2611 BC. However, historic anomalies do not account for the continued challenge of profession-based gender balance in the twenty-first century; the proportion of young women studying engineering and physics has remained virtually static since 2012 (Talent 2030 Dashboard 2015), while the number of women in computing degree programmes appear to be falling (ComputerWorld 2015). Women’s persistent under-­ representation in engineering and computing (Corbett and Hill 2015)

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flies in the face of the McKinsey Global Institute report (2015), which states that enabling women to meet their full potential in work could add as much as US$28 trillion to global gross domestic product by 2025. Also relevant to this chapter, based on an extensive Irish survey, 54% of engineers believe that for the modern engineer, strong communication, project management, analytical and design skills are now as important as mathematical understanding (Engineers Ireland 2017). This view is supported by Rottmann et al. (2015), who urge engineering educators to supplement technical coursework with multiple domains of professional skills development, specifically engineering leadership. Notably, the legitimacy of this approach is dependent on engineers recognising themselves as members of a leadership profession (Rottmann et al. 2015). Considering the leader context affiliate to this book, these discipline-­ specific perspectives are important when contemplating a leader role in the STEM environment. While the foregoing gender debate offers valuable insight into the technology sector’s current and optimum human capital mix, this book is specifically about outsider leadership. The under-representation of women in business leader roles is well documented (EIGE 2017; McKinsey 2016; Phillips et al. 2016), with females representing 19% of the CEO positions held in Ireland (BNY Mellon 2017) and just six of the FTSE2 100 CEOs in the UK (FTSE 100 2017). However, this challenge is not just about equity. Based on findings from hierarchical linear modelling analyses (Post 2015), female leadership is more positively associated with cohesion on larger and more functionally diverse teams and with cooperative learning and participative communication on larger and geographically dispersed teams. IT team configuration fits this landscape, and these female leadership findings echo the point made above that strong communication, project management, analytical and design skills are now as important as mathematics understanding for the modern engineer (Engineers Ireland 2017). This is not to suggest that all STEM business leaders should be female or indeed be necessarily qualified in STEM subjects in order to lead these organisations, but that diversity is  FTSE (Financial Times Stock Exchange) is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalisation. 2

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an important aspect of effective leadership in larger technology firms (Gotsis and Grimani 2016). Against this backdrop, this chapter seeks to offer insight into the trajectory of a female leader in this sector, that of Regina Moran, one of the 50 most influential women in UK IT (McDonald 2016). Having been CEO of Fujitsu Ireland for six years, Regina was appointed CEO of Fujitsu UK and Ireland in June 2015 and subsequently became Vice President and Head of Industries EMEAI at Fujitsu in June 2016. Fujitsu is a Japanese-owned global IT services and solutions company, servicing over 100 countries and employing more than 140,000 people worldwide (Fujitsu.com 2018). As the world’s fifth-largest IT services provider, they offer an integrated product and service portfolio that includes IT consulting services, technology products, managed services, cloud-based solutions and systems integration. With over 14,000 employees in the UK and Ireland and a business value of STG £1.8 billion per annum, Fujitsu is the largest Japanese employer in the UK and Ireland region. As VP of Industries, Regina’s responsibilities encompass growth in industry verticals of business and applications services across EMEAI within Fujitsu. As CEO of Fujitsu UK and Ireland, Regina was the key strategist for sales leadership, growth and organisational development. The chapter looks at Regina’s career over a 32-year period and considers the nuances of female progression and ultimately leadership in a STEM setting.

4.1 R  egina Moran: Engineering an Outsider Leader Role 4.1.1 Background While born in London in the 1960s, Regina was still a toddler when her paternal grandmother fell and broke her hip and her parents made the decision to move back to their native rural Ireland to care for her. When her grandmother got better, Regina’s family moved to Clonmel in Ireland’s midlands as that is where her mother was raised. Regina’s formative years were based in Clonmel, where she attended the Presentation Convent

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School. This experience had a significant impact on Regina and her attitude to learning: “It was a great environment, and the nuns were very inclusive. My father was a carpenter, we didn’t have a lot of money growing up, we lived in a small two-up two-down but the great thing about education in Ireland, and I think it’s probably still true today, is that didn’t matter, you received the same education. We all had the same access to education and you know, the nuns were tough but they were good. You learned.” Throughout her school years, Regina was “quite studious,” “liked reading a lot” and did very well in the Irish state exams. In particular, she “liked science [and] maths.” However, “They didn’t do physics or honours3 maths in the school. They didn’t teach these subjects to girls at that time. So I did chemistry and I did pass maths. I did biology. So that at least gave you the grounding to go on.” Career guidance was prescribed based on the social norms of the time, and as Regina “was good at Irish [language as a subject] the nuns had primary school teacher mapped out [as a career].” Not sure what career path to take, Regina took this advice on board: “So I went; they set up an interview for the Mary I [teaching college] for me.” However, she widened her options beyond this trajectory and also “applied for an executive officer [entry level post] in the civil service, the banks, you know all the stuff that we applied for in those days.” A key turning point in this decision process was when “a guy then came from Waterford4 to do a career evening. There were all different forms of engineering and the nuns in fairness were farsighted enough to tell us that this was on.” Regina’s interest was piqued when she “heard about electronic engineering,” and her career plans shifted into this realm. While Regina “applied for all of the things the Nuns advised me to,” she also applied for electronic engineering in Waterford. The nuns “didn’t think this was a great idea,” but Regina carried on with her plans “nonetheless.” Having done well in the state exams, Regina had a choice to make:

 Each subject is streamed as ‘honours’ or ‘pass’ and then grades are awarded A–F within each stream. A greater number of points are awarded for ‘honours’ subjects. 4  Waterford Institute of Technology is a higher education institute based in the south east of Ireland. 3

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I remember all the letters came in the same week. I got my leaving cert5 results, I got offered a job in the civil service as an executive officer, I got offered a job in the bank, in AIB [Allied Irish Bank], I got a place in Mary I [teaching college], much to the delight of the Head Nun [School Principal] and then I got a place in Waterford. I also got a place I think in NIHE [National Institute of Higher Education, now a university] so I didn’t know what to do, I thought, now I have to make a decision and I just felt strongly that I wanted to try the electronic engineering.

This decision, however, was not met with resounding support either at school or at home, “Now, my parents would have preferred me to get a paying job. They didn’t know what this thing was and they had no concept of what it meant to do this course.” Regina showed her resolve at this juncture, and put her own savings into this career choice, “I used to work from about the time I was 12 or 13, part-time every summer, I’d work for the summer so I had money saved so I thought, well, I won’t be a drain on them [her parents].” Once she accepted a place on the engineering certificate course, Regina qualified for an ESF grant,6 which helped balance the cost of attending college: “IR£16.66 a week… It was a saviour though because I couldn’t have afforded to go any other way.” Although Regina had also considered journalism, there was no grant for this course, which meant “it wasn’t financially viable to do that.” Having started the certificate course in Waterford, Regina felt she was “quite behind” as her primarily male classmates had studied physics and honours mathematics at school. She “didn’t understand the physics concepts” and one lecturer in particular “looked out for me a bit,” highlighting the value of mentor support early in life. Having gotten a part-time job in a fast food restaurant at night to supplement her income, Regina’s grades started to slip and this lecturer then sought her out at her workplace. He commented that if Regina wanted “to spend the rest of your life working in Burgerland, keep doing what you’re doing,” pushing Regina  The Leaving Certificate is a state exam sat by all students at the end of second-level education (age 17–18), the results of which accumulate points centrally collated to decipher who gains entry into preferred academic programmes, applied for through the national Central Applications Office (CAO). 6  The ESF is the European Union’s main financial instrument for helping people seeking employment through investment in education, skills and employment support. 5

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to realise that she couldn’t do everything, a valuable lesson for later in her career. She “gave up that job and then I just concentrated. I ended up getting a distinction.” An opportunity arose to join “an all-in diploma course” in Cork that “specialised in microprocessors.” Regina again had a choice to make. She reasoned “that emerging technology was PCs back in those days and I thought that would be a good choice so I moved.” Regina noted that the move to Cork was “quite a transition” as Cork was a lot bigger than Waterford and Regina “didn’t know a single soul” there. Also, there were only about 8 people in the diploma class, and Regina was the only female. Her reflections on this learning environment give an initial sense of the outsider perspective within the profession: “I don’t think they’d even [ladies] toilets in the engineering school in Cork and there were a lot of Marine engineers.” This resulted in a “very, very, much more male dominated scene” than Regina was accustomed to in Waterford. Having gained a distinction on the diploma, Regina was headhunted by a company called CompuCorp, a start-up company based just outside Cork city.

4.1.2 Entering the Engineering Field Having entered CompuCorp with “a bunch of us from the class,” Regina’s progression through the company ranks was swift. She was promoted from hardware technician to senior technician and then to test support engineer and was running all the automatic test equipment for the production lines within two years of joining the company. This role also afforded her the opportunity to travel, as “there was a couple of problem installations” in France, at one of CompuCorp’s key customer sites. While she was “only about 21, 22 at the time,” this experience gave Regina a sense of how manufacturing facilities worked, and it represented her first venture into managing a team of technicians. This had its own challenges, as the team were mostly older than Regina and she had limited management experience. However, she reflected, on her history as a sportsperson as a training ground for both leadership and peer engagement: Now I had played basketball, I played at a quite good level so I understood team dynamics I suppose. I played soccer as well and I joined the factory

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team actually which was great because I got to know all girls on the [production] line, and the thing about that was that if you could work with the production people really well, then it made your job a lot easier. So, I learned about trying to lead across boundaries even though I didn’t know that was what it was called at the time so that’s not just the people that report to you but the people that you have to influence who can say no.

Having gained “great grounding” at CompuCorp, Regina heard through a friend that Amdahl in Dublin were hiring electronic engineers. A far larger entity that CompuCorp, Amdahl was a well-known computer mainframe manufacturer at the time, employing approximately 700 people in Ireland. Regina feared that not having a primary degree might act as an entry barrier to the firm, but her friend was working for the company at the time and recommended Regina for interview. While reluctant to leave Cork, Regina was “very impressed with the opportunity. They talked about being sent to California training,” so she became “one of the experimental engineers that had a technician qualification which was diploma not a primary degree and they took in, I think about four or five of us from that background and there was about 110 engineers.” While it was a leap of faith, Regina believes that the risk in moving roles paid off, and she now encourages young women to take the same chance: “next thing I knew I was on a plane to California and before long, tell this to encourage girls, you’re driving a Mustang convertible down highway one, with the sun shining on you and you think, ‘this engineering stuff is pretty cool actually.’” By now in her mid-20s, Regina’s first training session in California lasted four months, exposing her to a different way of life as this was the first time she lived outside of Ireland. An outsider perspective comes to the fore, as she describes the experience: It was simple things. Like going into the supermarket. At the time here we didn’t have big stores and there was about a million cornflake type cereals. There was none of that here…it’s just everything seemed BIG. The highways were BIG. The cars were BIG. Everything was BIG. The apartment we were living in, I remember at the time I was renting like a small shoebox in Dublin and this BIG apartment, with swimming pools. It was like a charmed life, I can tell you. Unfortunately we had to learn all about the mainframes as well [laughter].

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Discussing the nuances of a multi-cultural working environment, Regina reflected on the differences between the three shifts working a 24-hour cycle in California. The first shift “were all college grads, youngsters. About the same age as us but they were all uber-confident.” The second shift was nearly all Vietnamese who came to the USA following the Vietnam War, and the third shift had some Vietnam Veterans (American soldiers who had fought in the Vietnam War). The Irish contingent “used to cycle through” the three shifts to gain experience of the full work cycle on the mainframe systems. This gave Regina a unique opportunity to gain insight into the sub-cultures of a larger organisation: It was amazing because the dynamic was completely different on the three shifts and we learnt, I mean I learnt a lot, I think we all did about the different cultures. The different dynamics between the two shifts, particularly second shift and third shift. There was supposed to be a 30 minute handover but they virtually never spoke to each other.

These demarcation lines were something that Regina had not experienced in her career to date, as she “didn’t realise coming from Ireland back then,7 the differences between people.”

4.1.3 Rising Through the Ranks Having returned to Ireland and embedding back into the Dublin office, Regina subsequently went back to California for another six months before becoming an Amdahl mainframe training instructor. She was able to travel more frequently in this role as she “had to do all the courses for all the engineers back in Ireland. Obviously, everybody couldn’t go so some of us would go and we would be train the trainer.” This was an intense role as mainframe computers are very complicated machines so Regina took it upon herself to transform the training materials to make them more user friendly. She wanted the internal training courses to “be professional so we got special folders made” to house the newly trans Up to the mid-1990s, Ireland had an outward emigration trajectory, leaving a primarily indigenous Irish population within the country. 7

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formed training materials. Regina believed it needed to be delivered “as if it was an external course” to maximise learning potential. This approach required Regina’s commitment “full on, every day,” in order to gain trainee buy-in and reinforced the importance of preparation when in a leader role: I felt, well, if we wanted people to take it seriously we’d have to provide very professional training but there’s a huge amount of preparation. So anyway, I think about training and probably teaching and lecturing, I don’t think people realise the amount of preparation that goes in, people look at the delivery hour. So, what I learned from that is if you engage a group of people it’s only respectful to prepare, and some people don’t realise how important that is.

Regina’s strategic approach to both the training and support materials gained traction within the company. Technicians engaged more with the professionalised programme and feedback from participants was very positive, enticing others to participate in future programmes. Trainees showed a visible uplift in skill development, offering tangible outcomes, ultimately contributing to enhanced business performance. Eighteen months into this role, while back in California picking up another mainframe, a job came up in Amdahl for Test Support Manager to run a newly created department bringing together a team of highly technical senior engineers and specialists. This was the first really technical department to be established in the Irish branch, responsible for “setting out the test strategy, problem solving.” Having read the job specification, Regina’s willingness to take a risk spurred her on, as she was “a rank outsider” but thought it would be good experience to apply for the job. While she was shocked when offered the job, this gave Regina the opportunity to create a new department. Reflecting on why she believed the Director of Engineering offered the role to an outsider, Regina mused: I think maybe he felt that a fresh approach was needed. I suppose that I had shown that I could develop a different approach to the training and achieve different outcomes. The feedback was positive from that I suppose he felt that maybe because of that then I had more confidence to stand, like if you were able to impart that kind of knowledge to senior people that maybe

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they’d follow you. I think as well, I think in fairness to him there was no female senior managers at all in technical roles. So I think maybe in the back of his mind that was gender balance. I think he took a chance on me though to be fair to the guy. He did take a chance.

4.1.4 Leading a Technical Department Once installed in the role of Test Support Manager, Regina recognised the challenge of managing a senior team of “very accomplished engineers” who were each specialists in their own right. Conscious that she “had to try and create a team spirit because they were all very individual,” this role was to be very different from anything she had done before: “I had to try and create [a team], and we were out on the production floor, we had a little office area. We had to again work very closely with all the production people because it’s a—it’s like a rugby team, some people are forwards, some people are backs, we’re all on the same team even though we have different roles. So it worked. It took a while to get this new department formed, and then we started to take on some pretty meaty projects.” Discussing the value of problem-based learning when leading a new technical team, Regina spoke about the project that brought cohesion to the newly created department: There was a problem, some of the boards were failing intermittently in the field and we’d to set up an investigation into it. It was a global problem, it wasn’t just an Irish problem. It turned out to be silver migration between the tracks…causing shorts intermittently and everything we’d go through— it was a four-week test cycle and then it could fail, so it took a long time.

This project also brought Regina into contact with Amdahl’s parent company, Fujitsu [Japan] as they had supplied the chip technology and some of the bare board technology that Amdahl used. This was Regina’s “first real dealing with the Japanese.” Regina also believes that engineering acted as a bonding agent between the two teams, “Fujitsu is an engineering company…if you’re an engineer then you can talk to them [Japanese colleagues]. Technical to technical. They’re hierarchical in many ways but

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technical to technical is actually, it transcends any of those boundaries. So as long as you, again, knew your topic basically.” These reflections reinforce the value of technical knowledge in a leader role, where one may not be involved in the “nuts and bolts” of production but should still comprehend the challenges of a “complex mainframe system.” Above all other elements however, it was empathy that glued the team together when one of the team was diagnosed with a serious illness. Although he got better, the team “went through that with him,” creating a familial connection between the engineers. As a young manager, Regina recognised that this “was a big thing to deal with and to keep the show on the road but I know that in many ways it created group cohesion, to have that kind of crisis.” This department went from strength to strength, “until people stopped buying mainframes.” With the advent of client server technology, demand slumped in the late 1980s and Amdahl had to close down the production plant in Ireland. This was “a bit of a rude awakening” as “Amdahl was a fantastic place to work.” The company laid off 700 people, including Regina, who decided to look for another job. Two Amdahl colleagues came to Regina to see if she would be interested in starting up a new business solutions enterprise with them using seed funding from Amdahl, setting the stage for a new chapter in her professional trajectory.

4.1.5 Leading a Start-Up Company Using combined engineering and software testing capability, Regina got together with two co-founders to set up the Amdahl Business Solutions Centre, and was joined by 24 others, primarily from Amdahl, to provide software testing, applications consultancy and quality control services. Building a team from scratch was a new experience for Regina as “in the test support world I didn’t choose the team, the team was assembled.” She handpicked the first six graduates, creating a different team dynamic to the established (and older) professional team of engineers she led in her previous role as Test Support Manager at Amdahl. Reflecting on these differences, Regina believes:

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The enthusiasm that young, the younger people had [made a difference]. Now, given the fact that I was only in my late 20s, there wasn’t a huge difference in age but, having said that they, they could see no barrier to succeeding. So we tried, we ended up getting ISO accreditation in 12 months which we needed. They just were driven, whereas older people sometimes, would tell you the five, ten reasons why something was not a great idea whereas these, they were all actually computer applications graduates and they just had a “let’s just do it” attitude. Which is good and bad because sometimes I think you do need, actually I think a combination’s better.

Having started “from pretty much nothing,” they built the business up with Regina leading the software testing unit and started “gaining contracts and beating some established players in the Irish market.” About two years into running the business, Amdahl acquired a French Canadian company called DMR Consulting, and Regina’s company “became a kind of franchise brand as DMR” in Ireland. This was a turning point for the company as DMR had “methodologies that we didn’t have. They knew what they were doing. But that was a real change point because we became DMR Consulting in Ireland and we built the business up then. Martin [Delaney] was the CEO, I was the Director of Operations.” The business grew to about 220 employees, as they embedded DMR methodologies in the company operation. Cultural diversity again came to the fore working with a French Canadian company compared to a UK-Irish entity, “Oh it was brilliant, it really was. And DMR was a fascinating company because it was French Canadian. Extremely diverse. I remember going to a kick off in San Diego and it was like the United Nations. There was just every colour, creed, shape, size of person. It was amazing actually.” Fujitsu had in the meantime bought out Amdahl completely including DMR Consulting and had also bought out ICL at the time, a UK based IT services company. They decided to rebrand them all as “Fujitsu ­something” in 2003. For Regina, the DMR business had built up over the intervening eight years and they had “a lot of autonomy because we were more like a franchise type model.” Having established “the name, the brand, the presence and the differentiation between the past and the current,” Fujitsu’s new branding strategy presented a significant challenge

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to the DMR team. Head Office changed DMR to Fujitsu Consulting and made further changes to the newly acquired entities, creating Fujitsu Services (ICL) and Fujitsu Technology Services (Amdahl), “all competing in the Irish market.” Regina was struck by the merged entities’ employee homogeneity at the following year’s kick-off, having come from the “very multi-cultural DMR Consulting” and the UN-like experience in San Diego as described above, “I remember walking in and as far as the eye could see middle aged men in suits and I mean there was one, maybe one Hindu and maybe two other women. It was such a shock.” This challenge was amplified by a lack of IT applications experience among the wider merged entity, creating a “very difficult period.” When contemplating what this meant to the running of DMR, Regina noted that “governance was heavy” and while DMR were “very agile before,” they “became less agile” under the new regime. It became …an almost civil service. The pace was slower. They didn’t want to take risks and I mean applications is a risky business. So, a dictate came out saying we’re not going to do any more applications business and we said, what about all the customers we have that we’re doing applications business for and they were all my customers because I was the delivery person at the time.

These changes while externally motivated had a fundamental impact on the way that DMR was run. This gave rise to a period of internal upheaval, creating a very different trajectory for the company.

4.1.6 Taking the Leader Reins as CEO Leadership was complex in the initial years after the merger, and a number of Fujitsu Ireland CEOs came and went during this time. The impact on the DMR team was significant in what amounted to a “huge cultural change” and “quite a few DMR people left” as a result. Circumstance intervened as Regina had her third child, and when she returned from maternity leave in 2006, she was asked to consider the role of CEO for the business in Ireland. Reflecting on her decision process, Regina believes

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completing an MBA in 2000 in Dublin City University “gave me enough confidence to say, maybe I could do the CEO job. You know, without knowing about finance, marketing, the other aspects of business, I don’t think I would have had the confidence.” Fujitsu’s applications business had been neglected during the interim period, so having stepped into the Applications CEO role, Regina worked with her colleagues to “build the business back up” over the coming years. By 2009, Fujitsu had bought out Siemens in the Irish market. They made a decision to streamline the leadership landscape to one where the three divisions (services, product and applications) would be led by a single country-level CEO, requiring Regina to compete for the position. Reflecting on the process, Regina remembers it as “a bit nerve racking because the interview process was quite intense, anyway, I got the job, so I became CEO of Fujitsu Ireland Limited. For the first time they had one brand in Ireland.” Reflecting on the CEO role, Regina noted that “the impact that you can have when you’re the CEO is different to the impact before that.” She recalled an incident where she was preoccupied with the new role and walked by a long-term colleague in the corridor, neglecting to greet them as she passed. When her colleague met her later the same day, they commented on the earlier interaction, suggesting that Regina was “too uppity to even say hello now.” This experience offered: A very early on lesson that…people notice things in a much more magnified way than if you’re just the director of this operation or an engineer or anything else. So I think it was a really good incident that happened ­actually to teach me that when you’re in a meeting, when you’re walking down a corridor, if you’re the leader, people have an expectation.

Responsible for developing Fujitsu’s global offering as country-level CEO, the role was more holistic than those that came before, expanding Regina’s remit into strategic leadership. Entering a high-growth phase, the merged Fujitsu Ireland’s purpose was to provide IT solutions, services and products in any location for Irish headquartered companies that were expanding internationally. The overriding vision was to “become the number one IT services company in the country.” When asked what

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skills were required to convert vision into action, Regina believes that in all aspects of the leader role Listening is incredibly important. It’s one skill that is critical in a CEO. Every day there are opportunities to learn something new or hear an idea from someone that could revolutionize the way that a business runs. It could come from the most inexperienced or unexpected person, and if you’re not listening, you might miss an opportunity. (Gradireland 2012, online)

By 2014, Fujitsu Ireland was performing well under Regina’s leadership, by now “seen as an engine of growth” within the Fujitsu group (Mac Sweeney 2014, online). The main growth driver was through international entry and the increased provision of global services from across the Fujitsu family to customers based in Ireland. Fujitsu Ireland also expanded into research and development, which resulted in a number of international Fujitsu collaborative projects coming to Ireland. This was seen as “a big win for us,” by Regina as it moved Ireland up the Fujitsu value chain. When asked what leadership style Regina bought to the CEO role (Mac Sweeney 2014, online), she stated: Throughout my career, I have always believed in openness and honesty. Fujitsu values straight-talking and being in tune with our customers and each other. It is important for me to live these values. We also believe in being tenacious and taking personal accountability. My background in engineering has taught me how to problem solve which is a key to success in any business…Success in business for me is setting ambitious goals and working with ambitious customers to exceed those goals. I am driven to succeed because I like to win with people—our Fujitsu people and our customers.

Regina stepped into the role of CEO of Fujitsu UK and Ireland in 2015, with responsibility for 14,000 employees and a turnover of stg£1.8 billion per annum. At the time, Regina declared she was “delighted to be taking over the reins in leading Fujitsu’s UK & Ireland business. This is a fast-paced, continually evolving technological world with levels of connectivity beyond all comprehension. At the same time, we are seeing

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innovations such as the Internet of Things and smart cities being no longer pipe dreams but achievable, near-term goals” (Fujitsu 2015, online). This emerging technical ecosystem placed a focus on “innovation, customer personalisation and commercialisation of R&D programmes in Big Data, eHealth and sensor technology to address future societal challenges.” For Fujitsu, this human-centric focus resulted in “significant new business wins…attributable to the hard work of so many people” (Moran 2015a, online). Regina has since added the role of VP and Head of Industries, EMEAI in July 2016 and currently leads a large scale internal change programme within this division. This followed a series of acquisitions and a reorganisation that span off Fujitsu’s laptop, PC and mobile phone businesses into subsidiaries in 2016 (Rossi 2016, online). In this role, Regina engages a variety of staff in new processes and procedures with “human-centric innovation” at the heart of the change strategy. Regina points out the complexity of leading in this environment and believes it is important to consider “Why would anyone follow you?” when leading such programmes and also “What’s in it for them?” when communicating change to colleagues and other stakeholders.

4.1.7 G  oing ‘Outside’ the Business: Giving Back to the STEM Community In addition to her roles within Fujitsu, Regina has made significant voluntary contributions to the wider community throughout her career, holding a number of leader positions, including that of non-executive Director of Eirgrid (2011–2015), Chair of ICT Ireland within IBEC (Ireland’s largest lobby group representing Irish business both domestically and internationally) and as a member of the Dublin City University Governing Authority (2011–2016). Her Presidency of Engineers Ireland (2015) in particular brings Regina’s personal philosophy on societal-­ centric values to the surface. She is committed to “advocating for Ireland on the world stage, redressing the skills gap, and promoting careers in ICT for women and students in line with a multiple pathway approach” (Fujitsu 2014, online).

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A strong advocate of promoting diversity in the STEM sector, Regina’s two Engineers Ireland presidential themes were (1) convergence between all forms of engineering and technology, and (2) improving the profile and number of women in engineering. She recognises the need for greater female participation in the IT sector and points to “a pipeline problem, particularly in tech roles” resulting in “women remaining a great untapped resource in our profession” (Moran 2015b). Regina acknowledges that “we also need to be asking: is there a culture of inclusion? Are people allowed to speak out or encouraged to be confident in themselves? It’s quite a complex issue” (Rossi 2016, online), one that extends beyond the gender equality debate. Pointing to Fujitsu’s efforts in this context, Regina returns to her own experience: “Personally, I’ve been very lucky in that I’ve never felt inhibited in terms of my career, and at Fujitsu we have a great network of women. I was the gender diversity champion within our region promoting inclusion both on the intake side, in terms of reducing the unconscious bias in recruiting, and also in the culture that exists in meetings and generally in the workplace” (Rossi 2016, online). Despite her advocacy for greater female participation, when contemplating leadership within the sector, Regina does not like “the idea of stereotypes—male leadership is A, and female leadership is B, because I think there’s a spectrum of personality types and people lead in different ways.” Authenticity remains a mantra when discussing female leadership in the STEM disciplines as “it’s important for women in leadership roles to be themselves…not trying to adopt the persona of someone else because you think that’s the right type of leadership.” This can be ­challenging in the IT sector at times, as it “can be kind of macho, certainly the sales end of it…so if that’s not for you then don’t go there.” While Regina has “stopped doing quite a bit” of fulfilling STEM community non-executive roles in the last two years while engaged in the recent Fujitsu change programme which required significant foreign travel, she is “looking forward to reengaging” now that she will be based in Ireland. Looking to the future, she notes that “THEA8 approached, so I’m Chair [appointed in May 2017], and that’s been very exciting and a great honour actually.”  THEA is the advocacy and representative body of the fourteen third-level Institutes of Technology in Ireland. 8

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4.1.8 Pastures New After 32 years, Regina has made the decision to accept the position of Enterprise Business Unit Director at Vodafone Ireland and will move into this role in May 2018. Although she “wasn’t looking for a job,” Anne O’ Leary, CEO of Vodafone persuaded me “to join her team, to run the enterprise business.” Contemplating the move, Regina points out that while leading Fujitsu’s change programme has been “very interesting,” she has “been on the road really, around the UK and Ireland, then Europe” for the last four and a half years and she looks forward to pastures new, “It’s a change to a different sector, I never had a female boss myself before, first time ever. So that’ll be really interesting. A new team, being back in Ireland.”

4.1.9 Conclusion and Reflection When considering one’s approach to leadership—regardless of whether you are promoted from within or come from some version of the ‘outside’—Regina recalls a leadership course she participated in a number of years before in which they were encouraged to ask two questions that she still uses as a baseline today: “How do people experience you as a leader?” and “How do people experience themselves in your presence?” When reflecting on a leader’s impact in the workplace, Regina offers a scenario to explore this point further: Let’s say we’re having this meeting now, and it’s a one-to-one and I’m your manager leader, and let’s say I spend the whole time looking at this (picks up a mobile phone) or have my laptop there typing away, and I don’t look at you and I’m like (mock types on the table) and then you think you’ve had a one-to-one with your employee but how do they feel, how are they experiencing themselves? Are they experiencing themselves motivated, cared for, appreciated or are they thinking this guy or girl can’t wait to get out of the room when she’s obviously too busy to even look at me and I think because of IT now, it becomes more difficult because you’re always on…I try not to have a laptop when I’m having a one-to-one because even if you’re not doing anything with it, it’s like barrier. I’m still old fashioned

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with the notebook because you can write a note down but it’s not as intrusive, it doesn’t seem as disrespectful somehow. I make mistakes all the time doing this but if you’re asking somebody, particularly that’s new in [the organisation], if you can think about those two things because what kind of a leadership sentiment are you inducing in the other person, do they want to follow you or not, because they have a choice. I mean management, somebody is a manager, somebody is a subordinate, there’s a physical line on a chart that says you will do what this person says but what I found is that when you are trying to change an organisation, change direction, move things in a different way which I’ve often [tried to do], people won’t be told because the resistance will be there if you tell somebody, so even if they’re nodding, that resistance [is there].

From her perspective, technical teams should be configured with people of different ages, genders, cultures and professional backgrounds to facilitate optimum operation, “I always try and go for a mixture now because I think you need the wisdom [of experience] but you also need the no barriers, no breaks, let’s do it [of youth].” As highlighted in the differential between DMR’s UN-like employee landscape and the demographic sameness of the merged entity in this chapter, a narrow human landscape can create barriers based on an assumed norm. Acknowledging an observed difference in the female psyche in relation to this perspective, Regina notes that “sometimes women, if they don’t have 80% of what’s required [based on the role description affiliate to a new career opportunity], they won’t put themselves in that situation whereas a man could have 40% and will. So people maybe just need that bit of encouragement, if that makes sense…it’s just to give them that encouragement that it’s ok not to have everything you need, just go for it.” Regina reflects on her own experience early in her career and acknowledges the value of having a supporter in your professional corner when considering a step up the career ladder, “It’s a bit like that tech support job right at the start [of my career]. I certainly didn’t have all the criteria to apply for that job.” She has sought to encourage women within her sector based on this experience: Somewhat unashamedly. When you’re in a female leadership role I think you have a duty of care to the other females in the organisation so I do tend

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to mentor and have mentored mostly females. I do try to create a diverse team myself. Not positively discriminate necessarily but maybe look a bit harder…some of the people I’ve mentored in Fujitsu are at the same level as me now. I think that’s brilliant and I hope they go beyond that…I just feel that diversity of thought is really important and I think as a female leader you have that duty of care because there’s loads of male leaders, so disproportionately available to mentor others—and I’m not saying females should only mentor females but I think you have to make yourself available.

Regina is philosophical about the concept of leadership, believing that you need to know what differentiates you in terms of leading in order to remain authentic as a business leader: I think there needs to be a bit of humility in that, realising that it’s not because you are better than someone else in inverted commas, you have to make it worth their while and I mean emotionally, not necessarily financially because financial inducement will only get you so far as well. People need to want to follow you and I read a bit about followership and it’s really interesting actually because you can’t have a leader without a follower… Sometimes people forget that, there’s an awful lot of talk about charismatic leadership and you know, these powerful people. I guess the advice I would give is ask yourself those two questions and really try and be present with yourself almost as you assess the answers. We’re all so wrapped up sometimes, that you’re not present.

As a parting thought, Regina shares her belief that as an individual you should “lead in your own way and then maybe a different type of person will follow you, but that’s ok too. So I would say I think that goes for guys as well, I don’t think that’s just a female thing.” Summary of Some of the Key Learning Points from the Chapter • Women are under-represented at all organisational levels in the STEM sector, including leadership roles, to the detriment of optimised sectoral development. • Societal barriers are seen as a major factor in the under-representation of women in the engineering field.

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• It is more difficult to encourage female participation in a sector without evidence of gender-specific mentors and leader role models. • As early career mentors facilitate opportunities that contribute to leader-skill development, responsibility rests with both genders to provide such mentorship. • Diversity of gender, culture and professional background underscores an optimised business environment, while a blend of youth and experience offers a balance of exuberance and wisdom. • Collective problem-based learning offers a distinct advantage to STEM business support teams. • While technical skills are vital in the STEM arena, strong technical skills alone do not equate to the optimum STEM leader; the ability to strategise, communicate and manage is a vital aspect of the leadership role. • Gender diversity offers access to specific perspectives, creativity and innovation skills unavailable in a single-gender environment. • Female leadership is more positively associated with cooperative learning, participative communication and acts of cohesion on larger and more functionally or geographically diverse teams, such as those found in the IT sector. • A gender imbalance among STEM graduates can create a tight labour market, curtailing growth in these sectors. • A CEO’s words and actions have a greater impact than others, magnified due to their leader role. • Authenticity is a vital skill when leading in business, as is the ability to listen regardless of position within a firm. • Leaders require followers to lead, and the nuances of followership are important aspects in the leader’s approach, particularly in times of change.

References BNY Mellon. 2017. Women in Management—The Leadership Pipeline 2017. BNY Mellon, 30% Club, IBEC, Dublin City University.

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ComputerWorld. 2015. Fewer British Women Studying Computer Science than in 2010. https://www.computerworlduk.com/careers/uk-demand-forit-workers-continues-grow-rapidly-3619000/. Accessed Jan 2018. Corbett, C., and C. Hill. 2015. Solving the Equation: The Variables for Women’s Success in Engineering and Computing. AAUW, Washington, DC, March. Dennehy, T., and N. Dasgupta. 2017. Female Peer Mentors Early in College Increase Women’s Positive Academic Experiences and Retention in Engineering. Proceedings of the National Academy of Sciences of the United States of America 114 (23): 5964–5969. EIGE. 2017. Gender Equality Index 2017: Measuring Gender Equality in the European Union 2005–2015, European Institute for Gender Equality, Vilnius. Engineers Ireland. 2017. Engineers Ireland Survey. Dublin, Ireland. Eurostat. 2017. Statistics by Theme. http://ec.europa.eu/eurostat/data/database. Accessed Feb 2018. Forbes Insights. 2011. Global Diversity and Inclusion—Fostering Innovation Through a Diverse Workforce. http://images.forbes.com/forbesinsights/ StudyPDFs/Innovation_Through_Diversity.pdf. Accessed Jan 2018. FTSE 100. 2017. FTSE 100 CEOs. Financial Times Stock Exchange, London, August. Fujitsu. 2014. Fujitsu Ireland CEO Appointed as President of Engineers Ireland. London: Press Release. ———. 2015. Fujitsu names Regina Moran as CEO of UK & Ireland. London: Press Release. Fujitsu.com. 2018. Fujitsu at a Glance. http://www.fujitsu.com/global/about/ corporate/info/. Accessed Mar 2018. Gotsis, G., and K. Grimani. 2016. Diversity as an Aspect of Effective Leadership: Integrating and Moving Forward. Leadership & Organization Development Journal 37 (2): 241–264. Gradireland. 2012. Learning from Leaders—Regina Moran. Ireland’s 100 Leading Graduate Employers 2011/2012. https://gradireland.com/careersectors/it-and-telecoms/regina-moran. Accessed Mar 2018. Joshi, A. 2014. The Interactive Effects of Gender and Education in Science and Engineering Teams. Administrative Science Quarterly 59 (2): 202–239. Mac Sweeney, N. 2014. CEO Q&A: Regina Moran, CEO, Fujitsu Ireland. Business and Finance. October 26. https://businessandfinance.com/ceo-qaregina-moran-ceo-fujitsu-ireland/. Accessed Feb 2018. McDonald, C. 2016. The 50 Most Influential Women in UK IT 2016. ComputerWeekly.com. Jun 21.

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McKinsey. 2015. Why Diversity Matters. McKinsey & Company, US, January. ———. 2016. Women in the Workplace. McKinsey & Company, US, September. McKinsey Global Institute. 2015. The Power of Parity. McKinsey & Company, US, September. Moran, R. 2015a. What a First Couple of Months!, Fujitsu Website, published Aug 28. https://blog.uk.fujitsu.com/uncategorized/what-a-first-couple-ofmonths/#.W3F3piRKiM8. Accessed Mar 2018. ———. 2015b. Key Note Speaker. Engineering and Technology Colloquium, Waterford Institute of Technology, Ireland, February 5. Phillips, T., R.  Tulsiani, and P.  Sangsuwan. 2016. The Green Park Leadership 10,000, Green Park, UK. Post, C. 2015. When Is Female Leadership an Advantage? Coordination Requirements, Team Cohesion, and Team Interaction Norms. Journal of Organizational Behaviour 36 (8): 1153–1175. Rossi, B. 2016. Wisdom of the East: Interview with Fujitsu UK and Ireland CEO Regina Moran. Information Age. February 16. http://www.information-age.com/wisdom-east-interview-fujitsu-uk-and-ireland-ceo-regina-moran-123460950/. Accessed Feb 2018. Rottmann, C., R.  Sacks, and D.  Reeve. 2015. Engineering Leadership: Grounding Leadership Theory in Engineers’ Professional Identities. Leadership 11 (3): 315–373. Talent 2030 Dashboard. 2015. National Centre for Universities and Business. http://www.ncub.co.uk/reports/talent-2030-dashboard-2015.html. Accessed Jan 2018. Women in STEM. 2017. WISE Campaign. https://www.wisecampaign.org.uk/ resources/2017/10/women-in-stem-workforce-2017. Accessed Jan 2018.

5 Serial Outsider Leadership: Coming in from the Cold?

This case study looks at a ‘serial outsider leader,’ sometimes described as a professional CEO (Boeker and Karichalil 2002). We use the term ‘serial’ purely in the context of someone who, through their career choices, has demonstrated some comfort with transitioning between organisations and sectors in a leadership role, thus making them an outsider on a number of occasions. Fiacra Nagle, the studied leader here, has been CEO, MD or Executive Director of a number of organisations over his career, however he has not as yet started his own business (as of the timing of the case study). Therefore, this chapter affords us the opportunity to consider the role of a professional manager as an outsider leader entering an established organisation with a specific purpose in mind. We focus on two of Fiacra’s professional CEO roles below, that of the first CEO after the founder stepped down (O’Brien’s) and that of new leader in an organisation facing business challenges that required change (Compass Group Ireland). An interesting feature of both of these roles is that Fiacra, with a background in banking, was a sectoral outsider as well.

This chapter is written by Chris O’Riordan; Felicity Kelliher; Patrick C. Flood; Malcolm Higgs © The Author(s) 2019 C. O’Riordan et al., Outsider Leadership, https://doi.org/10.1007/978-3-319-97463-7_5

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In the case of O’Brien’s, there is a critical difference between starting a successful business and managing a successful firm. Research in both entrepreneurship and firm life cycle theories have suggested that new ventures may outgrow the managerial capabilities of their founding teams, at which point the founders may be replaced by professional managers (Boeker and Karichalil 2002). It is accepted that the founder has a key role to play in the creation of a distinct business culture (Schein 1983) and that there are cultural implications when a company transitions from founder to professional manager. As a result, founder-CEO succession events present interesting anomalies in the hiring of a new CEO. While nearly all early-stage founder succession events involve outside successors (Wasserman 2003), founder-CEOs tend to retain a larger equity holding and have a higher level of attachment to the firms they create. In addition, many founder-CEOs remain in the firm even though it is being run by their successors. The presented case follows this pattern. Notably, in this case the founder reignited his full interest in the company, returning as owner-manager after a number of years (O’Riordan et al. 2007), creating an anomaly in the founder to professional manager leader trajectory described by Boeker and Karichalil (2002).1 With Compass Group Ireland, Fiacra stepped in to address the significant market challenge faced by the company. If one accepts that crisis management has become a profession and that advanced markets expect crisis to be minimised, then leading an organisation through a crisis requires a specific skillset (Boin et al. 2016). When an organisation is in crisis, the outsider leader must know how to manoeuvre the organisation through the crisis while maintaining the business culture (Bellamy 2015). Take a leader, in a hypothetical sense, who seeks to transition a poorperforming organisation with low morale and lack of discipline—and that does not meet business objectives—to a high-performing organisation. The aforementioned organisation would clearly be in crisis, forcing the leader to first serve as an organisational translator in order to guide the organisation through a set of circumstances that test the resiliency of organisational members and, in the process, force them to change and adapt (Barner 2011, p. 40). In this role, the leader would coach other internal leaders (or potential leaders) and employees through the crisis.   The term ‘owner’ here and throughout the chapter refers to the founder who was also the largest single shareholder in the business. 1

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This advice points to a leader’s adaptability, skillset, mindset and influence to maintain culture. Bennis (2009) similarly defines leaders in this capacity as ones that have the ability to make the right decisions while flying blind, based on knowledge, wisdom and ability to stay wedded to an overriding goal. Notably, while every crisis is unique in its distillation of problems, common processes exist that characterise different stages of crisis (Booth 2015), suggesting that outsider leaders can develop a systems approach to address business crisis as they become more adept at exploring legitimate business tactics to set new best practices in adaptive strategy (Goodman 2011). By honing their systems skills, an outsider can challenge established internal practices, and in doing so, address institutionalised expectations that do not address an optimal input-output balance in the firm (Tempel and Walgenbach 2007). This chapter focuses on the professional manager behind the strategic decisions such that we can comprehend the dynamics of outsider leadership as a serial CEO.

5.1 F iacra Nagle: The Adventures of a ‘Serial Outsider’ 5.1.1 Background Fiacra Nagle is an Irish-born businessman and was 54 years of age at the time of this case study. He lives with his family, in County Dublin in the east of Ireland. Career-wise, he spent much of his early years in banking roles but lately has become a very experienced business leader, which is the focus of the case. He has served in a number of senior roles in O’Brien’s Sandwich Bars, rising to Group CEO in January 2006. O’Brien’s is an Irish company that at its peak had over 300 outlets globally, with 140 in the UK alone. Established in 1988, the company adopted a franchising model, whereby most outlets were owned and managed by individual investors.2 The franchisor (O’Brien’s) then supplied the franchisee with  Typically, franchisees leased their premises from third-parties, with O’Brien’s part of the tenancy agreement. However, aside from not having freehold of the physical premises, franchisees owned their own business outlets. 2

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the expertise and know-how that they needed to set up and operate an outlet, with a standardised brand offering that included branded materials, training, expertise and other services. In return, the franchisee paid the franchisor fees/royalties. Leaving O’Brien’s in 2008, Fiacra initially operated as a consultant before taking up a position as Commercial Director for 18 months with ODC in the UK. This is a printing business, with two major on-demand print brands—KallKwik and Prontaprint. An opportunity to return to Ireland came in 2011, when Fiacra was approached by Compass Group to take up the role of MD of their Irish operations. Part of the world’s biggest catering company, Compass Group Ireland is a leading provider of food services, corporate hospitality and venue support services. After spending five years with Compass, he left in 2016 to pursue new opportunities after having developed a suitable number two to take over the role. Fiacra notes that his key achievements as MD included significant revenue growth, an enhanced team culture, a stronger senior management group, an improved atmosphere throughout the organisation and more effective relations with clients. This case study concentrates primarily on Fiacra’s leadership in O’Brien’s and Compass, but it does show how his earlier life and career have been influential in the approaches that he takes when leading businesses. He has experienced a number of changes over his career, moving between businesses and sectors, and thus has been the outsider on more than one occasion. We examine a variety of issues and show both how Fiacra, as a leader, addressed them and what were some of the implications of those decisions. These include the transition from outsider to insider and the value of blending such perspectives. We consider the challenge of gaining the acceptance of insiders and how resistance can be effectively handled. The importance of systems for the outsider leader is noted and what can happen when a previous insider returns. We also consider the relevance of outsider leaders in a crisis or difficult situation.

5.1.2 Starting Out: Education, Banking and Beyond Fiacra’s father was a Garda (member of the Irish police force). This meant that there was regular upheaval for the whole family as he was moved

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from district to district every few years due to the normal work re-­postings associated with the role. As a result, a young Fiacra ended up attending a number of different schools, which had an understandable effect on his personality development: “I think that I had to adjust…I was coming in to new environments at a young age…I was driven to adapt to the occasion.” In this respect, early on, Fiacra learned to become reasonably comfortable with change and flexibility. Upon completing his post-primary education in a boarding school, Fiacra joined a large Dublin-based accountancy practice as a trainee. After two years, he decided that an accountancy career was not for him. He enrolled in University College Dublin to undertake an arts degree, specialising in Economics and English, and then completed a Masters in Banking and Finance. At this point he realised that the finance route was the one to pursue from a career perspective, with banking the natural evolution from here. The market in London was booming at this time (1987/88) and for an ambitious young graduate was the place to be. Fiacra’s work in investment banking revolved heavily around structuring and re-structuring financing deals for businesses in the media sector. He was then headhunted by a bank in Ireland to run and set up their telecom finance team and began working in the IFSC in 1993, building up a very successful business. Having spent twelve fruitful years in banking, with seven of these at a senior level, Fiacra decided that he wanted something different. While he enjoyed the work, he did not like the transitory nature of the deals, where he was involved with clients for relatively short periods and then moved on to other clients for the cycle to begin again. Essentially, his position was that of the permanent outsider in the businesses that he worked with—always on the fringe. He now wanted a role that gave him a bigger part to play in the wider business, beyond a financial involvement— where he could become fully immersed in work that was more managerial and strategic in nature. The prospect of being more hands-on in running a business was appealing: operating at a level where he could see the tangible impact of the changes made and decisions agreed as they were happening rather than in retrospect. This was going to be a leap of substance for Fiacra and not one that he made lightly or in an uninformed way. Within banking, he was quite established: an insider, com-

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fortable and recognised. Beyond the sector was the relative unknown: the outside that Fiacra had a window to through client interactions but had limited experience in. However, as we will see later, he had plenty to offer this new world. As a leader, Fiacra can see how his early education and career equipped him well and gave him a good grounding for the more senior, broader roles that followed. His short period of work in accounting, his studies in economics, his capacity to embrace roles in different organisations and to grow with them and his extensive banking and finance involvement is now highly beneficial in terms of the skill set this provided. Leading, for him, is “very much on synthesising information, metrics, what are you measuring, how do you measure.” This means that he has been able to turn his leader hand to organisations in different sectors, breaking the voluminous information available into what is critical and necessary to drive the particular business.

5.1.3 F rom Outsider to Insider: An Incomplete Transition One of the advantages of an outsider coming into an organisation is the different perspective that they can have on the business and on how things can be improved. Having moved around a number of businesses, and also seeing the positives of bringing in people himself, Fiacra affirms this view. The outsider carries with them different skill sets as well as the capacity to look at problems or issues in another way and challenge current thought processes: “someone with a different approach, someone to push things forward.” This can contrast to a “received wisdom” that may be built into a business because of the same people, or their internal successors, being at the helm for long periods. Fiacra sees a commonality across the three key businesses that he has managed (Compass, ODC, O’Brien’s) in that they are effectively collections of smaller businesses (cafes/outlets, franchises) brought together under a larger entity. If management try to run these as a corporate collective, because of their previous backgrounds in such organisations or an unwillingness to try something new, they can encounter difficulties as their traditional “big business” approaches may

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not work in small and micro entities, even under the guidance of a franchisor. By bringing in an external person with experience of managing such diverse businesses as a franchise network, as Fiacra had, new approaches are adopted that are more suited to such an arrangement. The outsider comes initially with no significant biases or preconceptions about the business, the people or the strategy, stemming from their lack of direct experience within the entity; they undoubtedly have a view or an opinion, but this is lightly held and subject to change. Instead, they have a certain clarity that can be an advantage from the beginning: “[you can] start to see the wood from the trees…whereas if you’re in the weeds the whole time, and you are struggling to deal with issues, you’re going to find it very hard to say where the direction of travel needs to be.” The outsider also brings with them a wealth of external experience and expertise from other businesses and valuable relationships built up with people beyond the organisation that can be drawn upon when needed. Fiacra notes how established practices and approaches in an organisation can go on for years without examination or re-evaluation, simply because they have been ingrained, appear to work reasonably well and have never been challenged by those on the inside. However, with Fiacra at the helm, Compass decided to relook at their processes in detail, to establish if better ways of doing things could be identified. It can be easier for the arriving outsider to take this activity on because their views are not coloured by convention or history; there are no ‘sacred cows’ and effective change is part of their agenda: So, really looking at every task within the business. How do we open the café, do we need two people in the morning, do we need this number of people at this particular time, when do we maximise our staff, why are we doing it this way, can we do it a slightly different way, if we’re making everything on site can we buy-in products and make it easier. So, just a different way of looking at things.

However, it is also important to respect, understand and access the “legacy experience” already in existence within the business and decide which particular legacies need to be discarded as opposed to changing all for the sake of change. The challenge here is both identification and, ultimately,

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acceptance that selected aspects must remain because they are effective or are, in some way, core and important. Thus, the outsider leader cannot remain perennially so—even though this allows them to see things differently—otherwise they may work ‘on’ the business but never really ‘in’ the business. For a hands-on type of leader like Fiacra, who operates in organisations that need this type of out-in approach, to be completely outside would simply not work. Thus, it is important for the outsider leader to get into the mechanics of the business, at least initially, to get the detailed knowledge that they lack before making fundamental and uninformed choices that they might later regret. This also helps to establish them as part of the team. To see how the outsider becomes an insider, we can look back first at Fiacra’s entry into O’Brien’s. This was borne out of a chance social meeting with the owner and then-MD. They casually chatted about the business and met formally some days later where Fiacra was approached by the owner to come on to the management team. This was the type of opportunity that Fiacra was looking for: away from banking, locally based, more involved with the management and leadership side of an organisation and into a business that was growing and was in search of finance. Having joined O’Brien’s, Fiacra was able to apply his banking skills immediately to assist in raising funding and over time embedded himself further into the business. His initial role in O’Brien’s was as the International Business Development Director, with responsibility for growing the business into new territories including Australia, the USA, Germany, Singapore and the Middle East. Indeed, this role represented a good entry point to wider management for someone from a banking background because much of the work revolved around executing deals with master franchisers and franchisees in a structured manner, a competency that he already had in abundance. Subsequently, he became the Irish MD, reporting to the Group MD/owner. When the owner stepped back from the day-to-day business after a few years, taking up the role of Executive Chairman so that he could pursue other interests, Fiacra was promoted to the position of CEO for the entire group. His transition to the overall leadership role in O’Brien’s over a period of 5–6 years helped to shake off the outsider tag perceptually as he became

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more ensconced in the business and its culture: “At that stage, I knew the nuts and bolts of the business…I knew the franchisees, I knew the business, I knew the operations, the marketing, the finance piece of it quite well. It made it easier at that stage.” He believes that this transition helped to give him a broader approach to and knowledge of the business than what he would have had if he had been parachuted straight in as the leader/CEO. This, then, proved to be less of an issue in taking up the senior role in Compass straightaway, as he had developed a strong understanding of the food business and had already run a company in that sector: “I knew the drivers and I knew the levers to pull to make the change.” Thus, becoming an insider is a gradual, natural process: “there isn’t a blinding flash that you’re an insider…obviously when you’re in there a couple of years, you become part of the business.” It is challenging as well in the initial stages because the new arrival has to understand and know the people, get to grips with the nuances of the business and structures, appreciate any issues around regulations, link into new networks and relationships and try to comprehend the unique cultures that exist in all organisations: “where people would sit that you needed to talk to, how you found your way to them, how you got connected to them.” Some of the difficulties of crossing over to the inside can appear somewhat mundane in nature, but they highlight the need for the outsider to re-learn their approach to the role and adapt to the circumstances. Thus, while the outsider may seek to bring change to the organisation, they also have to deal with changes to themselves and their practices, demonstrating a degree of personal flexibility and adaptability. Fiacra recounts his experience of arriving in O’Brien’s on his first day. When he was part of a bank, a detailed support system was in place that dealt with ordering new office equipment or booking plane tickets, so that these effectively just ­happened after a phone call to the relevant person responsible. This proved very different following his move: I remember joining O’Brien’s and I’m shown into an empty room and told this is your new office. In my naivety, I said who do I ring to get a new computer and I was told that I had to go down to Dixons and buy a new

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laptop. So, it was basically being almost closeted as part of a big organisation to where you had to do…there wasn’t a big support. In the bank, a few of you shared someone who did your personal assistant’s work and all of that kind of stuff. That didn’t exist [in O’Brien’s]. That is a big change when you move and a challenge that you need to adjust as well.

Ultimately, Fiacra welcomes becoming an insider and sees the benefits of this, but he also argues that it is good to at least maintain an outsider perspective as it can be used positively to benefit the organisation: “it brings you a different view on the business, on life and things like that… you can see the organisation differently to the other people in there who are ingrained or embedded.” In this respect, some form of blending both perspectives seems a practical move for the outsider leader.

5.1.4 The Balanced Outsider as a Strategy Given that they are effectively straddling two identities, combining the outsider’s advantages with those of the insiders can be a useful approach for an outsider leader both personally and in how they constitute their team. In the case of O’Brien’s, the business had grown to 30–40 outlets but needed different experiences and expertise and a new skill set on the team to expand at a faster pace and internationally. The existing management team were strong in many ways but were mainly from the sandwich bar or coffee environment. While they had great knowledge of the sector, what was now needed from Fiacra’s perspective was a different management structure to drive the organisation forward. Having come from bigger businesses where corporate governance practices were commonplace, Fiacra had the experience required to instigate such a key change. This involved retaining valuable personnel and introducing new faces and new perspectives as required. Bringing in outsiders beyond the leader from different businesses and sectors allows the organisation to further challenge their existing thinking and change where needed, as they help to identify “a new approach to something that may have been going on for years.” They bring alternative experiences, honed elsewhere, and new knowledge that may not already

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exist within the business and are also less inward-focused in nature. Fiacra introduced an operations director to O’Brien’s who had been in a senior management role in the food business of a large retailer, while the new finance director that he brought in came from the concrete business. What they didn’t know about the sandwich, coffee or franchising sector, they could quickly learn from the insiders who already had expertise in these areas. The critical value is in what they are bringing to the business from another environment: It’s coming in with a different set of skills, a different perspective can add a freshness to the approach to the business and I think it can also help with some of the people on the team who are staying to help bring them forward and to bring them a different way of looking at things.

However, when it comes to appointing managers, Fiacra believes that a balance also needs to be struck between insiders and outsiders. He argues that, within, there are people capable of taking on managerial responsibilities. It is very demotivating for ambitious staff with potential to see only external appointments to higher roles, as this sends out a clear message to all as to what senior levels really believe and can lead to the brightest members departing. Within Compass, Fiacra deliberately sought a balanced approach to promotion, so that those who wanted to grow and develop had opportunities to prove themselves and obtain relevant training to progress. This allowed the company to benefit from the insider advantages and key organisational knowledge that such individuals possessed, accentuating this with a broader knowledge base through targeted education. External appointments were taken in from other sectors, selected because they had different features that were both compatible with the business and not already in abundant supply internally: There were some brilliant managers from hotel chains that we brought in to run some of our key accounts because they had the…they understood operational concepts of running a business plus very good client relationship skills and client relationship building skills that sometimes in the food service sector they weren’t as strong at.

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5.1.5 G  aining Acceptance and Addressing Insider Resistance Without Placating A challenge that Fiacra has faced many times is how to best approach leading a team that already exists, as he comes in as something of an unknown quantity from the relative cold. As an outsider joining an organisation, it is important for the leader to establish relationships with key stakeholders, including staff members, and not give the appearance of being aloof or distant. While these do not need to necessarily extend beyond the organisation (“We may not always be aligned as best friends”), solid professional relationships create an understanding and a clarity between the parties as to their objectives, perspectives and expectations. This comes naturally to Fiacra, who describes himself as a “bridge builder” as he seeks to become an insider and form connections: “My personality type wouldn’t be to maintain the external outsider. I would come in… align myself with people.” In his engagements with staff, he believes in the importance of both giving and receiving feedback as to how others and Fiacra himself dealt with specific issues and how this could be improved in the future, as this helps to build trust and reduces misunderstandings. Thus, being accepted by insiders is critical for the arriving leader. However, this takes time and may prove difficult in the early stages as one seeks to establish a degree of credibility in a new context: “The challenges are getting to understand and know the people.” When he first joined Compass, Fiacra experienced some resistance from a small number of senior staff, reflecting the fear that they had of a new person coming in as a possible threat and what the implications might be for them. The existing context had challenges; adding a new entrant without some advance planning could be difficult. In order to connect with his new colleagues, Fiacra asked if members of the top management team would individually meet him “just to get to know them. There was no agenda, it wasn’t a strategy.” However, a small number of the team refused, seemingly misunderstanding the motivation behind the initiative: We had a laugh about it later on with some of the team, because that was the way they were, they were nervous and I could see with people if you’re coming

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in. It’s the outsider, I hadn’t worked in the contract food sector before, why is he coming in, what does he want to meet me for? There was a bit of nervousness and fear and that fear can be a bad thing in an organisation.

While this was a challenge, Fiacra approached this in a pragmatic manner, acknowledging that any nervousness or fear had to be addressed if he was going to be accepted. He chose to engage openly with the staff in order to develop some upfront trust and give them the opportunity to work with him and the team, although accepting that where such an approach is not effective, different measures may be required. Ultimately, these solutions and changes are driven by the needs of the collective team as opposed to just the leader. This avoids the sense of the outsider changing things simply because of personality clashes or an unwillingness to consider alternative perspectives; the pre-existing insiders have a key role to play here also and deal with discipline in their own way: Then, if it doesn’t work, you need to get people on the team who are willing to work the same way. You can very soon work out who are the people who are going to move in the same direction as the business needs to move in so that it gets to where it wants to get to. It becomes, the team itself will drive, this is where we want to go, why are they holding us up…We’ll assess, we’ll agree on it and we’ll all agree but if you don’t play by those rules, you can’t be part of the team I suppose.

As the new entrant, Fiacra was conscious that he would need to be patient and allow the insiders to grow into the new arrangement. His preference is to achieve consensus, which he acknowledges takes more time and can give rise to a degree of prevarication, but “when you’re developing the team, you need to let some of those issues be talked out so that the team almost reaches agreement without you and then you can move on.” This avoids a ‘short, sharp shock’ type of approach, which may only increase the fear and demoralise key managers during the transition. However, Fiacra also acknowledges that the new leader needs to be firm and set out their stall early in terms of what is acceptable behaviour—though not in a negative or dictatorial sense. This then cascades throughout the organisation, from the top team to those on the front line, which also allows for input across the business at all levels so that “there’s an openness to the conversation.”

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Thus, meetings were established in such a way that active discussions would take place but that they had to come to an agreement or conclusion as to how matters were going to be brought forward. Talking shops were to be avoided, but valuable contributions were openly welcomed: “be very fair but also be very…ruthless in your application of that fairness.” This can require some tempering from the leader, particularly one with the drive to move forward, in order to gain acceptance and overall support: “I need to pinch myself and say listen to X. He wants to make his point, in my head I’m saying that I want him to get to the point, but I know that I need to listen to his explanation.” In essence, what Fiacra wished to avoid was managers leaving the meetings unclear as to what was to be done or why it was to be done, or harbouring some underlying dissention, dissatisfaction or negativity that would affect others adversely. In this respect, it was critical that he obtained some level of reasonable buy-in and support from the insiders as, without this, not only was his job an even greater challenge but the organisation as a whole could suffer: Anyone below that layer in management will say why would I put my hand up if this is going to be…if they are doing that amongst themselves to each other? Why would I put my hand up to say you should change this or do something different because they are going to undermine me—I’m not going to be listened to?

Fiacra also engaged with participants after meetings if he felt there were issues that needed to be addressed, and used this as an opportunity to make positive suggestions as to how this might be dealt with in the future. In this way, the approach to meetings was improved, giving rise to better outcomes and a cohesive team. As an outsider coming in, he was perhaps more suitably positioned than those already involved to diagnose the situation and develop impartial solutions, while as leader, he had the authority to then see this strategy through. However, none of this would have been possible without one crucial ingredient—gaining acceptance from the team and the team then accepting that this was the approach to adopt.

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5.1.6 T  he Portability of Systems: An Outsider’s Travelling Companion Having worked across a number of businesses and sectors, Fiacra believes that “there are certain skills that are universal.” While it is essential to understand the context, nuances and drivers of the particular sector that you are in, much of the skills and competencies needed to lead are generic. Thus, he argues, in food, it is important to know what motivates or encourages consumers to eat certain foods, while in the financial sector, one also needs to understand what drives customer behaviour to buy a certain financial product. In this respect, while very different businesses, there are core elements that are quite common. From Fiacra’s experience, “the management skills can be moved across,” meaning that a leader does not need to anchor themselves in one sector, location or niche once they are open to learning about the differences. Thus, the outsider leader is someone who is comfortable with their flexibility and adaptability but does need some mechanism to embed themselves into the essence of the business or sector that they are in. Fiacra argues that a key requirement for the outsider to run any business is to put in place systems and structures that allows the leader to have greater visibility on what is happening across the organisation. Relevant information is then generated, forming an evidence base for choices that need to be made in running the business. This is a critical change that he seeks to introduce in his leadership role wherever he is based and is neither organisation nor sector-specific. However, the system must be workable for the staff who operate within it and should evolve as market conditions and customer preferences change. This lends itself to developing a series of metrics that communicate clearly and efficiently to the leader and senior team what is happening in key areas of the organisation. A crucial step here is to understand what it is that is being measured, to ensure that the business focuses on the actions to take to impact the ­relevant numbers rather than trying to measure everything. These metrics represent targets and act as the basis for budgets, aligned by a strategic design with what is important for the success of the organisation. He believes that the combination of proper systems and useful metrics as an

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output then allows the leader to simplify how they can run the business, cutting through much of the complexity, so that it is possible to identify what the key drivers are and how the organisation can pursue them. This thinking is portable and tried and tested by Fiacra in the numerous businesses that he has led, highlighting how an approach in one organisation or sector can be transposed into another with some adaptation. This is part of the valuable experience and perspective that the outsider brings with them, knowing what worked before and—with appropriate adjustment—should work again. Fiacra contrasts his systematic approach to leadership with that of his former colleague in O’Brien’s. While the owner could “run the business on instinct”, Fiacra’s style was more predictable and fact-based in making decisions. This alternative style is understandable when considering the fact that the owner is an entrepreneur and had successfully founded and developed the business. These differences appeared to present a challenge for both parties (Fiacra and owner) when directly functioning together in a co-leadership context, demonstrating that if a systems-­based approach is to work, it would appear that there needs to be a consistency between both parties in terms of how they approach the business’ operation. While debate and dialogue is essential, if one or the other takes a different position and consensus cannot be achieved, it can be difficult to sustain a working relationship particularly where the legitimacy of the outsider is then affected. Thus, while having a system and applying this in different contexts can give the outsider leader critical knowledge about the business and a comfort that everything is supported by information, where others have an alternative view, this can be affected.

5.1.7 The Returning Outsider Typically, when a leader leaves an organisation, one assumes a degree of finality or closure. The insider becomes an outsider, perhaps over a transitional period by mutual agreement or in most cases almost immediately as roles cease and relationships change. Newly recast, the outsider moves

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on, creates new connections, seeks other opportunities and begins the cycle again as they become an insider elsewhere. But what if the outsider returns? One of the advantages that Fiacra had in his role in Compass was that, as the outsider leader, he was arriving into an organisation where he had the positional power to set out his stall but to also allow some compromise on this approach in order to gain the acceptance of others. In O’Brien’s, the same positional power was present for much of his tenure, as Fiacra—as CEO—was given the authority by the owner to run the business as he saw fit. This, as we note above, was helpful to Fiacra in order for him to drive the firm forward during a strong growth phase while also allowing him to instil his systematic approach to the processes behind this growth. However, such authority was lacking in the end because of the return of the owner, the primary insider, to the day-to-day running of the company. Ironically, the owner had become something of an outsider because of his departure from the day-to-day business: while he had filled the role of Executive Chairman, he had become less handson. This return to active involvement was during a difficult period for the company. The global financial crisis of the late 2000s had resulted in reduced sales and profits amongst franchisees, who were already locked in to property-lease arrangements. Because O’Brien’s had initially insisted on being part of these agreements as head tenant—in case franchisees tried to pull out—the company ended up with debts for stores that had been closed or where the franchisee exited. In addition, the ability to sell further ­franchises in Ireland and internationally was severely dented as prospective targets no longer had the finance required. Fiacra indicates that this combination—the owner’s return and the business downturn— presented challenges, as the owner and CEO did not agree on a common vision or approach for the organisation in the difficult environment they were presented with. Effectively, the returning outsider had now taken over his old role again as insider on a day-to-day basis, which meant that the business was being run by two leaders. For those who had been insiders—including Fiacra—during the owner’s absence, the arrival of the owner as an outsider created challenges, which is not unique to this scenario of course. We have already identified how Fiacra’s arrival in Compass had led to

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some discontent, again because change can be feared and uncomfortable to those on the inside. In the case of O’Brien’s, Fiacra ultimately decided that this co-­leadership was unsustainable and chose to leave the organisation. Thus, we see the crucial importance not only of insider acceptance, but also that this acceptance and support is maintained, as otherwise the one-time outsider can be recast as such again.

5.1.8 The Outsider in Challenging Times A scenario where outsiders can get called in is when an organisation is experiencing difficult times. The thinking appears to be that a ‘new broom’ is required, with different ideas and strategies, to return the business to either stability or success. In Fiacra’s case, we see examples of this in some of the companies he has had leadership roles in. His entry into ODC was at a difficult time, as not only was its market value down but new technology in the sector—in the form of digital print—had undercut the traditional business. Therefore, as part of Fiacra’s remit, he needed to help in growing the business, developing the brands and to bring at least one of the brands into an online position: “it was really a management issue in a very difficult situation.” With regard to Compass, he entered the organisation at a time when they had been severely hit by the recession in Ireland: “I came in at the bottom of the cycle.” One of the key changes that Fiacra needed to make on his arrival was to encourage more expansive thinking amongst the management team, who—from his perspective—had seemingly become somewhat insular in nature in spite of the availability of new ideas and innovations readily available in the global Compass Group. Part of this had arisen from the culture at the time, which was focused on cost-cutting as opposed to growth: “If your revenue started to fall, as it had in Ireland, you’re just told to cut costs.” While understandable in context— because of a number of very difficult years during the financial crisis— this period of retrenchment had now passed but the ethos seemingly remained. Fiacra sought to change this at an early-stage following his uptake of the leader role, recognising the improving opportunities in the outside environment and potential innovations to come in. He realised

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that the insiders appeared to have become somewhat blind to this potential over time. In this respect, what was needed was someone to come and say, “This is what you need to do and how you need to do it.” Thus, as outsider, Fiacra had to instigate change to bring the business back into a growth mindset, to help the management team to operate optimally and to freshen up ideas and practices. These are roles that an insider could conceivably struggle with because of their possible embeddedness in the business, but are understandably positive steps for an organisation that has been through a difficult time. While this appears logical on paper, in practice it proved more difficult to implement than anticipated. Although some staff embraced the new approaches and initiatives, others saw it differently and preferred to remain where they were: “some people just aren’t open to change, they keep the status quo and they want...they see a comfort in that and they don’t really want to go through the pain that some of that change might [bring].” The irony here was that Compass had been focused on cutting costs, whereas Fiacra’s approach was to grow the business. One would assume that this was more appealing and would generate greater job security, but Fiacra suggests that “some people revert to a kind of a clampdown a little bit. If I keep doing what I’m doing now, everything will be fine.” This appears counterintuitive but may also indicate that some people had become ingrained to a degree in an approach that, although not delivering, was at least known and understood; the prospect being introduced by the unknown and initially untrusted outsider was unproven and thus potentially greeted with scepticism. In essence, this reiterates the earlier point that the arriving outsider needs to gain acceptance from the insiders, even if they are seeking to improve the insider’s situation. While the outsider can come in seeking positive change in difficult times, their arrival can equally give rise to challenges based on the insiders’ response. This may not be intentional, but if their approaches are radically different to those being adopted by the insiders, this can potentially lead to disagreement or conflict and problems with relationships. In O’Brien’s, we see the outsider arriving during a difficult period for the business (arising from the financial crisis) in the shape of the returning owner. By virtue of pulling back from the daily leadership, he had become something of an outsider but now began to take more of an active role.

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Fiacra had now become the insider, at least temporarily. In this context, we can see how a leadership crisis may arise if both insider and outsider try to lead together and do not agree on common ground.

5.1.9 Conclusion and Reflection Fiacra has been an outsider on more than one occasion and seems to enjoy the experience. He is comfortable with the mantle as he sees the merits of an ‘outsider perspective’ even when one is established within an organisation. This means being part of the in-group, gaining their trust on a gradual basis, but not in a manner that compromises on one’s vision for the organisation. The leader does not need to be aloof to do this, but neither is entrenchment appropriate. Instead, the outsider leader has to strike a suitable balance between being willing to try new ­initiatives in an open manner and respecting the way some things are and that they are that way for a reason; making a difference does not have to mean destroying to create. A key element here is having the right team—a mix of outside experience to drive change and inside knowledge to remain contextually sensitive—that supports the leader’s vision but that is also supported and listened to by the leader. This is critical if the outsider wants to be accepted and transition to the inside, as resistance and reluctance can be expected initially. While understandable, this needs to be addressed in a reasonable and measured manner, and can take time. One does not need to placate to do this, but treading lightly at least as a first step does seem to be a good move to allow people to adjust. However, a ‘softly, softly’ approach cannot sustain indefinitely if resistance continues and people may need to be addressed if they are unwilling to reconsider their opposition. Indeed, by achieving general buy-in and acceptance, the effect of resistance can be handled through a form of ‘peer pressure’: the team itself may ultimately manage those who are disruptive by moving forward regardless. What cannot be forgotten, though, is that the outsider leader themselves must adapt and change to become an insider. This is not a one-way process: the outsider needs to unlearn elements of what they knew from previous organisations and learn ‘the way we do things around here.’ In essence, a blending happens as the

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outsider leader needs to simultaneously be an insider and an outsider, holding both perspectives lightly and using them effectively as required. This can be a useful strategy, as the outsider leader adopts a dual identity but also appoints others on this basis, recognising that there are merits in mixing internal and external managerial recruits. An area of difficulty for the outsider leader is getting a sufficient understanding of the new business or sector to allow them to run it effectively. They are relative novices when it comes to some of the detail, but have extensive skills, experience and knowledge from elsewhere that needs to be harnessed and adapted. In this regard, there is a universality to aspects of leadership that can be carried across businesses and sectors. For Fiacra, the key is implementing suitable systems to provide him and his team with the critical information and metrics to allow them to make d ­ ecisions. As an established leader, he knows what to do but still needs the essential raw materials to do this. He can then cut through the complexity and focus his attention on critical evidence that he knows is reliable—and this is what drives the business. We contrast this with an insider who may, at times, place increased reliance on instinct. Is instinct portable? Perhaps to an extent, but it is highly contextual and refined over time and practice. In this regard, one might contend that it is harder for a leader to transfer this approach from one business/sector to another, and is then a more risky strategy for the ­outsider leader at least in the beginning. Thus, for the outsider leader, adopting a systematic method to running the business seems to be a safer bet, giving them something to pin their hat on when they are surrounded by so much newness already. A relatively novel feature of this case is the return of the owner in O’Brien’s into a co-leadership role. This is quite uncommon and presents a possible dilemma as now there are two individuals at the head of the organisation who are each part-insider and part-outsider. Where both parties are singing from the same hymn sheet and demarcate the role appropriately, the outcome may well be positive for the business. However, when there is disagreement, we are back to the potential issue of change resistance. This can create challenges, as it did in this case where both leaders appeared to not agree on a common approach. Such an arrangement may be effective if some middle ground or compromise is identified; here, it was not and the outcome was the departure of one of the

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leaders. Thus, we learn that co-leadership between an insider and an outsider may not be a viable approach if their philosophies or styles are incompatible. The initial outsider appears to prefer freedom to operate and shape as they see fit. If this is not available, they can leave to seek this autonomy elsewhere. There is a lack of clarity in the literature as to whether outsider or insider leaders are more effective. One area where there is some supportive (though not conclusive) evidence in favour of outsiders is in times of crisis or difficulty, as people call out for change and recognise that those already inside and part of the establishment may not be equipped to deliver on this recovery strategy. The outsider is seen as more of a maverick, yet can be selected because they have delivered elsewhere on what is perceived to be the necessary change. In the case of Fiacra, his arrival in Compass was at the end of a difficult period for the business where he was seen as the person to deliver growth and enhance the management of the organisation based on his previous placements. We cannot be definitive on whether this is the right choice for an organisation to make, but in the case circumstances, this seems to have been a good decision for Compass as Fiacra appeared to deliver in both of these areas. But does this create a crisis internally for the organisation, if the new leader does not gel with the insider culture and approach? During difficult times, tensions can be high and adding an outsider to such an environment may present challenges. We potentially see some evidence of this in the chapter, which leads us to further contemplate the outsider in a crisis or difficult situation where insider-outsider relationships are not attended to sufficiently or are not working effectively. In essence, Fiacra is an outsider by choice because he enjoys the challenges and opportunities that this presents him with. This requires a degree of adaptability and flexibility, a person with a sense of adventure and a willingness to try something new, and someone who appreciates that they are going to confront difficulties on their journey. He is able to quickly establish roots and build positive relationships; as a child he learned how to do this and as a leader this adaptability has brought him success.

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Summary of Some of the Key Learning Points from the Chapter • Some leaders may be comfortable with operating as outsiders, which allows them to move relatively seamlessly between organisations/sectors over their careers. However, this requires someone with a high degree of adaptability to do this successfully. • Outsider leaders, by virtue of their experiences, background or where they have come from, do not necessarily want to stay that way. When they enter an organisation, they also want to become part of the inside as this may be where the real leadership happens, depending on the specific context. • Experiences in early years around change and flexibility can be learning events for a leader. • The outsider leader’s diversity of experiences, skills and contacts acquired in different locations can equip them well to turn their hand to alternative contexts, as they use what they know already works and can draw help and advice from those they know previously. • They have developed their own systems and structures that are portable and adaptable, and that give them visibility across the organisation. Thus, where they are and its newness is of less significance because of how they approach leadership, regardless of context. • The outsider leader can bring new and fresh perspectives that challenge the status quo and existing logic, and identify improvements through their own analytical lens that has been honed elsewhere. In this respect, their initial clarity and lack of preconceptions is a key selling point as the established practices are not theirs to defend. • That said, the outsider leader cannot just cast off all ‘legacies’ of an organisation and must be selective in the initial stages as to what needs to change. A ‘softly, softly’ approach can be advisable at first. What helps in making suitable changes is getting into the mechanics of the business early to acquire the detailed knowledge needed to make informed fundamental choices. • Becoming an insider takes time and is a natural process as the outsider becomes part of the business. There are initial challenges on many levels, requiring adaptation and some re-learning by the new arrival and those within the business.

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• Even as an insider, it can be beneficial for the former outsider to maintain an outside perspective. In this sense, some blending between both an outsider and insider view by the leader is valuable. • A balanced hiring strategy is important when choosing between insiders and outsiders, as each has their advantages. It is critical to retain valuable personnel with potential and internal know-how and to promote them. However, it is also important to seek an injection of those with new knowledge that is lacking in the current organisation, who can quickly learn from and drive forward those already in situ. • People may fear the new arrival, viewing them as a potential threat, and resist their introduction into the business. A possible approach here is for the outsider to engage openly—including with those who resist their arrival—even in advance of their formal entry, so that they can get to know each other and develop some trust at the start of the relationship. • Where resistance is encountered, patience and understanding are required but only up to a point. If resistance becomes disruptive to the overall team or the business strategy, it must be dealt with. This may be addressed by the team itself through peer engagement or by the leader. • The outsider leader needs to form solid professional relationships with their new insider colleagues to gain acceptance. Connections need to be established and bridges built, which may not be easy as the leader seeks to establish their credibility with those on the inside. • A lack of buy-in to the outsider leader’s approach or vision can be problematic. • When insiders become outsiders and then return, this can be a challenge for the formerly outsider leader who has become quite ensconced on the inside and moulded the organisation their way in the interim period. The returning outsider may now potentially be the one seeking acceptance from those on the inside. Difficulties can ensue, particularly where the outsider leader’s autonomy is affected by the returning leader or where an incompatible dual-leadership structure forms. • When an organisation is in challenging times the entry of an outsider leader can be beneficial in terms of the infusion of different thinking and approaches. However, this may not always be well received by

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insiders who, in spite of working in challenging times already, can engage in a form of clampdown. • While seemingly counter-intuitive, the attitude amongst some can be that while the current organisation is in a difficult position, at least they know and understand what is there at present. • A gradual transition over a period of time for an outsider leader can be helpful in terms of getting a greater understanding of their new destination, particularly when the leap is substantial, such as between sectors. This is potentially less of a concern when the move is between two organisations with some similarities at least at sectoral level.

References Barner, R. 2011. Hidden Roles of the Managerial coach: What Routes Can Coaches Take to Go Above and Beyond for Future Leaders? Training & Development, June, 38–45. Bellamy, C.  D. 2015. Leadership and Crisis Management in Modern Organizations. BEPress, Liberty University. https://works.bepress.com/dr_ chris_d_bellamy/6/. Accessed Dec 2017. Bennis, W. 2009. Crucible Generation: Leaders Can and Must Be Forged. Leadership Excellence, May 8. Boeker, W., and R. Karichalil. 2002. Entrepreneurial Transitions: Factors Influencing Founder Departure. The Academy of Management Journal 45 (4): 818–826. Boin, A., E. Stern, and B. Sundelius. 2016. The Politics of Crisis Management: Public Leadership Under Pressure. Cambridge: Cambridge University Press. Booth, S.A. 2015. Crisis Management Strategy Competition and Change in Modern Enterprises. New York: Routledge Taylor & Francis Group (Routledge Revival). Goodman, M. 2011. What Business Can Learn from Organized Crime. Harvard Business Review, November, 27–30. O’Riordan, C., J. Cunningham, and D. Harrington. 2007. O’Briens Sandwich Bars. In Irish Cases in Entrepreneurship, ed. C. Henry and P. McGowan, vol. 2. Dublin: Blackhall Publishing. Schein, E. H. 1983. The Role of the Founder in the Creation of Organizational Culture. Sloan School of Management, MIT WP 0098H.

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Tempel, A., and P. Walgenbach. 2007. Global Standardization of Organisational Forms and Management Practices? What New Institutionalism and the Business-Systems Approach Can Learn from Each Other. Journal of Management Studies 44 (1): 1–24. Wasserman, N. 2003. Founder-CEO Succession and the Paradox of Entrepreneurial Success. Organization Science 14 (2): 149–172.

6 Outside in and Out and in as a Serial Entrepreneur

This chapter considers the serial entrepreneur as an outsider business leader. A serial or habitual entrepreneur is one who continuously applies new ideas to create or rejuvenate an enterprise. These individuals thrive on the excitement of taking an idea to market and making it happen (Hyytinen and Ilmakunnas 2007). They can be conceived of as a “business generator” who initiates and builds (or rebuilds) a business and then hands it over to professional management teams (Carland et al. 2000). This approach gives the serial entrepreneur the scope to move onto another cycle of idea generation, business creation/rejuvenation and management handover. This is in contrast to a one-time entrepreneurial event where an individual or individuals establish a single enterprise before settling into the role of business manager as, perhaps, the quintessential insider leader. While some believe that serial entrepreneurs must exit one venture before entering into another (Wright et al. 1997), this chapter looks at an environment where multiple ventures may be led simultaneously, due in part to the ‘abundance of opportunities’ visible and available to the studied entrepreneur. This chapter is written by Felicity Kelliher; Chris O’Riordan; Patrick C. Flood; Malcolm Higgs

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Serial entrepreneurs account for nearly 30% of the transitions from paid employment to entrepreneurship (Hyytinen and Ilmakunnas 2007). They are differentiated from others by prior experience of entrepreneurial events, escalating entrepreneurial aspiration or drive, adept opportunity recognition and willingness to live by their decisions—important characteristics in promoting sustainable business activity. They are also recognised as an important sub-group of entrepreneurs who make a fundamental contribution to the process of wealth creation (Carland et  al. 2000; Westhead et al. 2005). However, despite their prevalence and potentially important leadership role as drivers of a dynamic global business environment, we know relatively little about the nature of the serial entrepreneur as outsider leader. When considering this outsider leader role, serial entrepreneurship need not involve establishing a new firm as it can take the form of, for example, a management buyout, a takeover or a speculative purchase of an existing firm (Wright et al. 1997). What is required is that the entrepreneur recognises entrepreneurial opportunities that are not visible to others active in a target business environment (Singh et al. 1999) and has both aptitude and willingness to act on this impetus. The serial entrepreneur has the capacity to take judgemental decisions about the coordination of scarce resources (Wright et al. 1997) partly through the application of an outsider perspective that may not be visible to the insider. They also have the potential to leverage, in pursuit of sought-after resources, a wide array of social and professional contacts that may not be available to an insider leader. As serial business leaders, there is potential for these entrepreneurs to leverage prior private business ownership and leadership experience (Westhead et al. 2005) to the benefit of a new venture or ailing business. Evidence indicates that serial entrepreneurs are not a homogenous group, however, and thus this chapter contemplates the studied entrepreneur through the ‘opportunist’ lens: one who has a prevailing interest in financial gain and is motivated by the opportunity to build a successful business. The opportunist is proactive by nature and rarely engages a new business opportunity as a defensive move. While often subdivided into serial dealmakers and organic serials (Wright et al. 1997), it is difficult to pigeonhole the studied entrepreneur into either category, as he appears

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adept in either role. Of note is that serial entrepreneurs perceive themselves to be more autonomous in effecting business ventures as they gain experience (Wright et al. 1997), allowing them the capacity to be outside or inside, depending on the specific business objectives. Dr John Teeling, the entrepreneur studied in this chapter, has established, gained temporary and/or permanent control of, bought out and speculated on over 30 companies in his 50-year career. These organisations span across numerous sectors, including mineral exploration, textile production, utility provision and whiskey distillation. Collectively, these enterprises have a worldwide presence. John’s professional life story gives us the opportunity to contemplate the serial entrepreneur’s outsider leader role in newly formed and transitioning businesses, many of which would not have been created or rejuvenated without his influence.

6.1 John Teeling—Outsider by Choice “I’m not a joiner of any organisation. Groucho Marx. Any organisation which would have me, I won’t join.” Author Interview with John Teeling, 2017.

6.1.1 Background John Teeling was born and raised in Dublin’s Northside and continues to live there. His career spans from the 1960s to the current day, and no one genre, sector or approach can define him. At face value, he would appear to have moved from public to private sector, having worked as a lecturer at UCD Business School for 20 years at the beginning of his career. However even this ‘fact’ is not what it appears, as John acquired, managed and disposed of numerous businesses while simultaneously carrying out his lecturing role at UCD, before resigning from his university post in 1988. John is an entrepreneur in the true meaning of the word: he has been “entre” (meaning ‘to swim out’) and “prendes” (meaning ‘to grasp, understand or capture’) in each of his business ventures. Contemplating the 30 individual businesses John has founded or led since the 1960s, he muses, “if you live a long time, you do a lot of things,” noting that “you

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actually forget businesses you were involved in.” Considering his significant success in numerous enterprises, one may speculate that his continued prowess is down to a wide insight. However, John is more reticent as to whether there is an entrepreneurial formula, “or else it’s a very narrow perspective that they [entrepreneurs] use everywhere. I’m not sure what it is. I’m not.” While each of John’s business ventures and professional roles has its own merits, this chapter focuses on those experiences that required John to contemplate or take on a formal leadership role in a business setting.

6.1.2 Starting Out John’s first formal venture into enterprise could be linked to an external catalyst: his father died when he was 14, and as the eldest of four children, John helped his mother with the business his father had left behind, Emlee Trust, a private money lending firm. Of that time, John has previously stated that his mother placed a lot of trust in him “which was great for a 14-year old,” and that there was “a lot of work to be done” (Kenny 1991, p. 343). However, John’s entrepreneurial tendencies started long before the death of his father. He was an active trader of marbles by the time he was 12 and “was always very keen to work with [Dad] on this little tiny business, giving out [promissory] notes.” A firm believer in the born entrepreneur, John is “as certain as I want to be that this particular gene or talent or weakness is inbred,” a view he reiterated when speaking of the key entrepreneurs in contemporary enterprise, “…without exception, there’s a little wire or a little electrical impulse in them that captures the idea or the vision. They look at the world differently.” John was “doing the books” of his father’s business at 12 or 13, and following his father’s death, John had to “go around and collect money,” and remembers a turning point in this early experience, which paved his perspective regarding business challenges: The hardest thing I ever had to do in my whole life, my whole life, was in November, in 1960 and I remember on a wet Tuesday and I remember just as clearly now. You know I’m sure psychologists would make major things out of this. They would, of course they would. I had to go up to Home

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Farm Road at the time, to collect 2 and 6, the weekly premium, insurance premium, and it was wet and it was windy and I didn’t want to do it and I remember saying “I don’t think it’s fair.” I was trying to do the Inter1 at that stage and you know I shouldn’t have to do that when all the others are going home to their warm houses. If I hadn’t have done it [collected the money], I don’t know what I would have done with the rest of my life. But I could not go home to my mother without having done it…I never ever doubted myself after that, ever, and everything was alright after that.

For the remainder of his school and full-time further education, John ran the family moneylenders’ business with his mother, a business that lasted until the early 1980s. Once John stepped down from its active management in the late 1960s, his two brothers and sister worked in it for a period (Kenny 1991). On leaving school at 17, he was offered a role with the ESB, a highly valued secure position in Ireland’s sole provider of electricity at the time. However, that very security appalled Teeling, as he recalled the experience, “I lasted two and half hours. At the break they said to me ‘you know we’ll put you into the pension plan and if you’re lucky, you’re starting at grade 18 you know you [could] get to grade 9 or 10.’ I was appalled. That was the end of me, that was the end of it. I came home to my mother who was less than impressed with me, but I couldn’t see my life like that.” Having extracted himself from the ESB, John was offered a scholarship to attend UCD and chose to study a B Comm. Neither of his parents had finished secondary education, which partly influenced his decision to go to university. As a Dublin Corporation scholarship student and being from the other side of the city as the university, he initially felt an outsider in UCD’s “strong group” as he was not “in the club” to begin with. John acknowledges, “I’m in the club now. They were tight to get in. UCD got me in, the B Comm got me in…People would have me into places now of course, but not for the longest time. But that suited me fine. I’m not a joiner.” As one of three scholars, they were ranked first, second and fourth in the degree class, which he closely followed with a Master of Economic Science, and in 1967 John secured the Friendly Sons of St. Patrick’s  Inter (or Intermediate) certificate was a state exam completed at age 14–15 in Ireland.

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Fellowship to go to Wharton School of Finance at the University of Pennsylvania in the USA to study for an MBA. John’s ability to “concentrate brilliantly” helped him in his studies, while garnering an ability to do discounted cashflows while studying in the USA proved lucrative following graduation. On his return to Ireland in 1968, an opportunity to lecture at UCD came up, as the Business School had “managed to get an MBA approved, first one in Europe, in 1965 and they needed people with American qualifications to teach on it.” As the wages were low, John supplemented his UCD post by lecturing at the College of Industrial Relations (now NCI). Discussing the benefits of these lecturing posts, John believes it was good for him, “The best way to learn something is to teach it, as you know. Because if you don’t know what you’re talking about you get badly caught.” At the end of his first year lecturing at UCD, his mentor Michael MacCormac (Professor of Business at UCD) came to him with a further job opportunity, calculating discounted cashflows for the Smelter Corporation of Ireland, part of Tara Mines, based at 162 Clontarf Road. “They gave me the job on the spot and when they opened their offices, they gave me the room I’m in now, still, same room, 48 years later and it suits me fine,” he says. These surroundings echo Teeling’s outsider perspective as highlighted in a previous entrepreneurship and innovation case study, “His office is in the suburbs rather than the city centre and he has none of the trappings of a business executive; no secretary, no dictaphone and no one to make the tea” (Ilgner et al. 1996, p. 1). At this stage, John had three roles (UCD, NCI and Tara Mines) while also working as a part-time consultant for a number of other firms, when McCormack suggested John go back to the USA to do a doctorate. He secured a Ford fellowship and completed a DBA at Harvard (1970–1975). The programme purpose was to produce educators involving two years of course work and a number of case studies, completed over five years. John acknowledges that Harvard was “a big decision. To this day I’m not sure it was the right [one].” As John was engaged to his wife Deirdre, he travelled “over and back writing cases” and struggled to select case topics in the third year of the programme. His tutor suggested Irish whiskey. John’s case focused on Irish whiskey marketing in the USA, and when completing the case history, he realised there was a business opportunity in this space:

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The view was that Irish whiskey would give you a hangover and people had never tasted it. Now that’s a hard thing to change. If you tasted it and get a hangover it’s one thing but won’t taste it because you’re going to get a hangover, that’s even worse. So I thought at that stage looking at it that I could build a distillery cheaper and better and run it and not make a haimes [mess], I would make the products that people wanted and I still believe that to this day. I wouldn’t make the products that the people think I should make, I’ll make the products that people want. You might say that’s obvious in marketing. It isn’t that obvious at all. Companies make what they think people want, not what people want.

We’ll return to John’s venture into the whiskey market later in the chapter, but for now it is worth contemplating the gestation period of most ‘overnight’ business leader successes.

6.1.3 The Easiest Way to Make Money Simultaneous to his lecturing roles and studying in the USA, John dabbled in the stock market from the very start of his career as “the stock exchange was always the easiest way to make money so I would have bought a few shares, so anyway, that was it and I was teaching.” He developed a particular interest in undervalued public companies while studying at Harvard and applied the principles of Graham’s net-net asset (NAV) model2 that he learned about while at Wharton. Under this model, if the net assets per share of a company (net of all long-term debt) were higher than the market price, then you bought (Kennelly 2014). Applying this principle to trading, John “picked 11 shares on the stock market that I thought were seriously undervalued and over the subsequent seven or eight years I managed to create mayhem in several of them.” When he returned to Ireland from the USA in the mid-1970s, he had “enough to get a house. Seven or eight grand [thousand].” John continued to speculate, on his return to Ireland. He realises that his activities on the stock market could be construed as asset stripping, but he takes a pragmatic view of  Net (net) asset value (NAV) is the value of an entity’s assets minus the value of its liabilities, often in relation to open-end or mutual funds, since shares of such funds registered with the US Securities and Exchange Commission are redeemed at their net asset value. 2

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stock trading: “a dollar is an orphan, the dollar has no loyalty to anybody. It’ll move and so capital will move where it’s most wanted.” Selecting investment opportunities required a combination of realism, ingenuity and support from others: I picked companies that I would take stakes in and given that you’d no money you had to take, the biggest stake in the smallest company. Irish Wire Products (IWP) had a total market capital of around 300,000 and we borrowed money again.

When asked what he learned from these experiences, John quipped that he “learnt that I should probably have stayed at that whole thing.” The outsider perspective remains strong here, as John was leading a charge against the existing approach to financial management in each speculated business. He also saw monetary potential that others had not in relation to the stated business value in each case. John puts this down to a mixture of luck, an eye for opportunity and having an understanding of and access to resources: I know they say you make your own (luck) but I don’t think you do. It falls on your head, or you fall over it, or fall into it. I mean, I saw the opportunity in natural resources by working in the company, I saw where there were some opportunities. But then I saw where you would be able to get the seed capital. In other words, and that’s where a lot of entrepreneurs spin off businesses—where they have expertise because they know what to, what it is. They say, you know, that fella is not doing that right or he’s missing that. Now, I can get Joe Soap, Jane Brien, Mary Murphy—and I can get a couple of hundred grand here and we can go and develop that.

6.1.4 Finding a Partner As John’s ability to successfully identify undervalued publicly quoted companies grew, he needed financial support that spread beyond traditional lending. John mused, “I think the banks have lost that because in

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entrepreneurship, it’s the initial seed capital. Now, can you have a pre-­ seed capital? That comes from family, friends and fools. Though the last one is important. The fools.” When contemplating who might be appropriate in the role of business partner, John spoke about the need to be known in the community, as to succeed in generating capital there need to be “Doors open. That’s the point. And the doors don’t open for the poor guys coming in. Guys coming from non-commercial backgrounds and women and they struggle very hard to get their ideas, ah published.” He went on to speak of a number of the key entrepreneurs of the last 30 years in light of this perspective: “Even if you look at the great start-ups. If you look at the Fangs, the Facebooks, the Alphabets, the Apples, with the exception of [Steve] Jobs. [Mark] Zuckerberg was from rich parents. [Jeff] Bezos was a merchant banker. Jobs is Jobs. Elon Musk was from wealthy parents.” While John believes he is social, he is not ‘sociable’ and therefore sought out a business partner in the late 1970s to complement his own skills. He identified Donal Kinsella as a “fellow traveller, we shared views, he’s a risk seeker not a risk averter. We started doing things together, we’re into the 1980s now and I’d been doing well in the 1970s and into the 1980s. Still in UCD, still in Tara Mines and ah, I got him through Tara Mines.” Notably, it was John’s existing contacts that identified his future business partner. Together, the two men with another ‘mate’ of John’s upped the ante in terms of the companies they targeted by applying the NAV model to those companies publicly quoted on the Irish stock exchange. They gained control of Seafield Gentex (a textile group) with the intent of stripping its assets (it was restructured into a profitable property vehicle) and Glen Abbey (a hosiery producer) to leverage its equity to build up stakes in other companies, before hitting a road block with the acquisition of Dublin Gas: …we went after a couple of companies. By now it was the late 70s and we went after Seafield Gentex, Dublin Gas and Glen Abbey all at the same time. Too much. You know, we thought we were masters of the universe. Anyway, we got ourselves into difficulty but extracted ourselves. In Dublin Gas we got stuck, lost an EGM [extraordinary general meeting] and I was bought out, and then at that stage Donal said he wouldn’t sell.

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While all three companies were selling at a fraction of their asset worth, only Glen Abbey met the criteria of the NAV model. Having overstretched their supply lines, the directors of all three companies refused John and his partner’s requests to join their boards, and the banks—having significant outstanding loans out on these ventures—got nervous (Kenny 1991). Seafield Gentex directors proposed receivership in 1979, an event that would have caused John and his partners to lose everything, so “we had a go at running Seafield,” heralding a new chapter in John’s professional trajectory.

6.1.5 F alling into the Leader Role…When You Have to Stay a While While the original intention in these ‘strategic stakes’ was to turn over the businesses as paper transactions without engaging with their day-to-­day operation based on the NAV model, John took on the CEO role in Seafield in 1979: “I’d to take leave of absence from UCD to run it for a couple of years. Which was fine, I didn’t mind, it was good. I got rid of the assets and I did alright, I didn’t make a big amount of money.” John followed up with a core leadership role in Glen Abbey, having bought a 29% stake in the group from its co-founders and taken control of the company for a second time in 1983, “which was my third attack on Glen Abbey. That was brilliant, oh I enjoyed that.” Once the takeover was complete, the prevailing advice was to try and “make a go of it and ran it, tried to make a go of it, 1200 workforce. It was a struggle. So I sold off all the divisions, turned it into a cash shell. Mini-max regret strategy. Minimise my maximum regret.” In 1987, Glen Abbey was sold to a UK property developer, only to be bought back by John in 1989 when he briefly returned to the CEO role. Contemplating the shift from trading on a firm’s assets to running that firm, John acknowledges that each requires a different skill set, unlikely to reside in a single individual. He believes it is vital to know your own limits and to identify the right people with the right technical skills to support the business: I used to make 50% of all the knickers [underwear] in Ireland in Glen Abbey and I never wore them, at least not often (laugh). So I don’t have the

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technical skill, I’ll pull all the other things together. I’d know probably enough to have an intelligent conversation with someone who knows nothing but with a technical person I’m lost but you know technical skills are something I buy in and it’s always been like that. Maybe the difference between the leaders and the entrepreneurs, you asked me that is, the entrepreneur can get those resources, they can buy all those things. That’s his job, to acquire them.

While unwilling to remain in the business-leader role in the longer term, John points to the challenge of hiring “somebody who is technically qualified” and who is also “flexible” enough to lead a growing enterprise. He likes “somebody who shows on their CV that they have succeeded at anything before,” although he is not worried about the arena in which these achievements occurred: “I don’t care what it is, if you won the junior Eurovision [Song Contest] in Croatia—wonderful. You had to work to get there, you, nobody else.” Even with this ethos, he is not always successful at locating the right person for the required leader role: How good am I at hiring, at hiring managers? I’ll give you an example, and I’m not so sure I’ve improved it since. I’ve people with me a long long time. I’ve a lot of people with me a very long time. So in other words, if they can live with me then I can live with them. That’s the thing, and I’d say it’s equal. I was involved with a company called Cambridge Leasing Finance. It was a start-up and it was flying, flying. Now I’d at the same time hired eight [managers] because I’d about 1200 working at that stage and of the eight I’d got three right. And we’d worked hard, you know— three out of eight, Cambridge had hired and they seemed to get them all right. I did not believe it though, so I sold all my shares. The only time I sold it all at the top. You can’t get it right, can’t. You just can’t. Now, three out of eight might not have been great but am, I can’t see more than five out of eight.

Contemplating his level of resolve to rectify such appointment errors, although John “doesn’t mind making mistakes,” he sometimes feels he “sticks too long” and points out that very often “the ones you don’t want to keep are the ones who stay.” Thus, John’s strong preference is to stick with those he knows when hiring key personnel, reinforcing the value of professional contacts, “There’s a guy joining my commercial team in

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January, again people I know…yes, people I know and that I’ve seen and that I can work with.”

6.1.6 Digging for Treasures Having stayed in management roles at Seafield over the early 1980s, John returned to his mining roots in 1983, seeking out opportunities in mineral exploration. Over time, he became involved with a variety of mineral exploration companies including Conroy, Minquest, Kenmare Resources, African Gold plc (Zimbabwe) and Pan Andean plc (Bolivia), among others. John is previously on record as saying that his job in the exploration companies was to “get the money, the people and the projects, manage it for a while, then hire professional managers and get a public quotation for the shares” (Kenny 1991, p. 357). His reflections on these experiences capture the entrepreneurial balance of ‘swimming out’ to and ‘grasping’ an opportunity: I sat down and said look, what I can do here, and I’ve never really changed this, I can put together the resources for a mineral exploration company. There are opportunities. So, the opportunity was there, and the rest of the things, you know, did you have, did you have energy, did you have the ability, well these were not issues. So, I raised 85 grand [thousand] in 1983, Donal Kinsella would’ve been with me, a couple of other guys were with me, each with 15 thousand pounds. Each would’ve made 150 thousand in three years [tongue click], ah, and it was the first exploration venture and the idea was, I didn’t have a specific objective, but it was all high risk ­ventures. I bought a company called Kenmare, with Donal for a thousand pounds, bought control for a thousand pounds. A great coup again, brilliant. I deserved it for that. It was a public company and ah, maybe I’m showing off and I shouldn’t, but it was one of the few things that happened that was good. Kenmare is one of the biggest titanium companies in the world now. I am long gone.

By 2009, Teeling was the co-founder and chairman of six London Stock Exchange (AIM) listed natural resources companies with a market capitalisation of EUR200m (O’Gorman, 2010). When contemplating his

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success in a number of diverse sectors (e.g. clothing, utilities, resources and whiskey distilling), John highlighted the need to continue to have an outside perspective on each industry or sector, even if you’ve been in it for a long time. Without this vigilance, it is possible to get caught up in the hubris of ‘vicious’ sectoral cycles which occur as industries peak and trough, particularly when in speculative business environments. He used the instance of resources (e.g. the mineral industry) as an example to articulate this advice, “The business developed in a way faster than anyone thought. After doing nothing for 20 years from about the mid-90s onwards, they boomed for a few years then sagged again. They go through vicious cycles and for the last seven or eight years you know we were more into selling than buying.”

6.1.7 Leaving the Past Behind John finished in Tara Mines in 1985, having been held on retainer in the interim decades. By 1988, John had “about nine ventures going at the one time. I had so much going on, I couldn’t keep it all going,” so his lecturing role at UCD “had to go.” When contemplating his move away from lecturing, John is philosophical about his resignation, “…the Registrar thought it wasn’t right that I was doing these things and was quite happy for me to finish.” It being a Business School, there was potential for the role of entrepreneur and role of lecturer to be mutually beneficial as while John “didn’t do any admin,” he “did a lot of high profile public things” that could benefit the School and enhance their links with private industry. However, John believes this perspective would need acceptance on both sides that “there shouldn’t be a standard form, [of lecturer] any more than there should be a standard entrepreneur.” Even Harvard, who perceives itself as entrepreneurial was more about “leader and management. You know, it was how’re you going to manage these companies to world domination, not how’re you going to create a world dominating company.” John has retained his connection with UCD in the interim, speaking regularly at alumni events, often involving those he once taught. This pattern of leaving the past behind but staying connected continued throughout his career. Leaving the door ajar in this way allowed a return to Glen Abbey and to whiskey, each when the time was right.

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6.1.8 Distilling the Benefits Having contemplated Irish whiskey when completing a case study as part of his DBA at Harvard in the early 1970s and in liaison with a class colleague, John retained an interest in the industry over the forthcoming 20 years. By the mid-1980s, he sought to buy shares on option in Irish Distillers Group (IDG), which was the only listed whiskey company in Ireland at the time. It was going to cost IR£ 200 million to buy it, which John could likely have generated in junk bonds by leveraging Glen Abbey and cultivating links with Merrill Lynch and Goodbody’s among others. However, he “lost his nerve” to go after a company perceived to be “a national treasure”: I thought I would have developed so much antagonism towards me from the authorities if I downsized it. So I hadn’t the guts. I was going to have to fire 800 people. There were 800 too many. There were 1100 [employees] and there should’ve been 300. So, I decided against it [buying IDG].

Having accounted for nearly 60% of the world whiskey market in the mid-nineteenth century (Kennelly 2014), the Irish market was in severe decline by the 1980s, holding less than 1% of the global market despite the fact that worldwide spirits’ sales remained buoyant. John’s logic was “where there’s a monopoly (as there was with IDG), there’s an o­ pportunity” (Teeling 2007), and in 1987 he co-purchased the chemical alcohol plant, Ceimici Teo, from the Irish state and started distilling whiskey: Kenmare [mineral exploration company] had got licenses in the Philippines. I was coming back on the plane or going out on the plane and I read that Cooley’s State-owned industrial alcohol company was for sale. I thought that the opportunity was there, that I could break the monopoly. What had happened in IDG (Irish Distillers Group) was that they had put the four family-owned whiskey producing companies together to form IDG under pressure from Seán Lemass, Prime Minister of Ireland, but they kept all the families on the board creating a huge overhead.

Returning to the recurring topic of ‘the club’ in an Irish context, John acknowledged the value of having the right people on the team who knew the relevant personnel when building the deal to purchase Cooley’s in 1987:

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This is where the contacts win out. The civil servants didn’t want to sell it to me because they thought I was going to asset strip, going to take all the lab equipment and sell it in Brazil, or somewhere like that, which never occurred to me. Afterwards, I realised it was a very good idea. So, we did a deal to buy it for peanuts, what’s smaller than peanuts? Anyway, for very little. On the understanding that we’d attempt to rescue or resuscitate and I wonder do the civil servants, I wonder do they know what they started by doing that because we did, we did rescue and resuscitate. Would Irish Whiskey have happened? Ya, but it would have been much slower. Much slower. We [used] the BES (Business Expansion Scheme3) and various things like that. The industry didn’t care anything about us.

Originally, the intended strategy was to manufacture and sell own-­ brand whiskey. However, acquiring IR£ 9.5m in BES funds provided an opportunity to create a branded Irish whiskey to compete with IDG. As the first independent whiskey distillery set up in Ireland in 100 years, Cooley’s first malt whiskey was distilled in 1989, followed by its first grain whiskey in 1990. John acknowledges his struggle with the leap from acquisition to management and is previously on the record as enjoying “getting the money, the people and the projects, manage it [the acquisition] for a while, then hire professional managers and get a public quotation for the shares” (Ilgner et al. 1996, p. 4). However, as Cooley’s grew “it required more time and ah, I didn’t distance myself enough in terms of that. Now I did have distance, I used to have management teams that do a job. I don’t see my job as management.” In the interim, whiskey has become a “pet project” to John as he “kinda fell in love with it,” which he believes is “very dangerous.” A gradual withdrawal of the BES scheme in the early 1990s drained Cooley of much needed investment and left it in a precarious finance position against corporate raiders through to the mid-1990s. Not wanting to renege control to investors in the absence of equity capital, John sought to take partners into Cooley to fight takeover

 BES was a private investment tax incentive scheme supported by the Irish government to encourage private individuals to invest in business development opportunities within Irish companies. 3

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bids from Burn Stewart and ironically IDG, a strategy that many within the establishment were shocked by: We took people into Cooley when it was really against the grain. I mean they thought we were insane. Enterprise Ireland4 and the IDA [Irish Development Authority5] never supported us which I thought was poor as I supply whiskey to 18 Irish distilleries now. And they were ‘na, why would anybody do that?’ They didn’t see the opportunity. They just didn’t SEE. And when they [IDA] brought it up to their main board in the next venture in 2013 because they didn’t want to reject me because I’d proven successful, they still turned it down. And ah, incredible. Couldn’t see what I thought was very simple; there has to be an opportunity because almost all the distilleries are pot stills, and I was the only one making grain. So, I thought it wasn’t even speculative. Now, it’s speculative to make it work but we had the opportunity and it is, it’s working really well at the moment, far better than I thought. That’s why I’m kinda stuck as a manager.

By the end of 2011, Irish whiskey was enjoying an unexpected revival, with annual growth of around 11.5%, far faster than all other whiskey categories (Kennelly 2014). While Cooley was sold to Beam/Suntory in January 2012, John’s evolutionary role as a serial entrepreneur continues, and he has since founded the family-owned Great Northern Distillery in 2012, encompassing two large whiskey distilleries in Dundalk (Ireland).

6.1.9 Conclusions and Reflections Contemplating the evolution of his professional trajectory from starting out in his father’s business, through his years at UCD and Tara Mines, his speculative share trading and interim management roles of the 1970s and 1980s and onto the purchase of Kenmare Resources and Cooley Distilleries in the late 1980s and founding Great Northern in 2013, John acknowledged the shift in focus over the years: “So, it evolved and you  Enterprise Ireland is the Irish government organisation responsible for the development and growth of Irish enterprises in world markets. 5  IDA is a non-commercial, semi-state body promoting Foreign Direct Investment (FDI) into Ireland through a wide range of services. 4

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know, the 1990s became more management if you like, rather than entrepreneurial.” Despite this shift in emphasis, John does not see his job as management, as his strengths lie in leading the charge on a target venture rather than on existing business. However, he accepts that management is a necessary interim task in pursuit of an end goal in relation to business acquisition and development. He articulates this view in relation to Great Northern Distillery: I don’t see my job as management. I do in Great Northern at the moment. Only because it’s an interim. From January [2019] it’ll be a commercial (entity). I am the entire commercial department at the moment. We have a guy starting in January 2019 to develop the commercial team.

As discussed earlier in the chapter, John’s eye for opportunity and access to the right advice and resources offers him a unique insight into what is required for entrepreneurial activity to occur, whether in a start-up or in an established business. However, he is reflective when it comes to identifying true entrepreneurs in each generation of business leaders, “I suppose you very rarely see an Elon Musk, you see, a totally different person who looks and has the ability to get followers to come with him. Totally disruptive. Very rare, so they’re the real entrepreneurs and there are very few, there are very very few of total disruptors.” When considering a recruit for a management team in any of his projects, John states that if he could grow them internally he would “because of culture, culture is vital. I think a culture at the early stage of the company, the culture, is very very important. A culture of ‘can do,’ not ‘ought to do’, do when necessary. It’s not a bureaucracy and it can’t be, or if it is, it’s not going to survive.” Despite lauding the benefits of internal promotion, John believes he continues to comprehend the value of an outside­in perspective when leading a business. This is particularly true when he is not involved in the day-to-day operations, which he primarily leaves to his management team in each company. Speaking of Great Northern Distillery, John notes: Now our [Great Northern] operation in Dundalk is the second biggest [whiskey] complex in the country and and I’ve 24 hour working in the place with 24 people. Yet, it could be less. It could be one person per shift.

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If you go to Tullamore Dew,6 then I’m over-manned. Tullamore Dew has one person per shift and I said to him ‘what happens if you need to go to the bathroom?’ and he said ‘I go to the bathroom,’ and I said ‘what if something breaks? Where are the people to go and fix it?’ He says, ‘well it stops, it’s computer controlled, that solves that problem.’

This willingness to look at other businesses in a non-protective way may be one of the hidden talents of outsider leaders, those who take the opportunities to step outside to gain a fresh view of the inside. John also recommends that leaders need to embrace a wider performance measurement than profit alone, when contemplating progress in a business, particularly one that did not originate with the current owner: “There’s great pleasure in that. One of the greatest pleasures I had was in Cooley was seeing a bottle of Connemara [a Cooley brand] in the Raffles Bar in Singapore.” However, when one suggests that this is a unique outside perspective, John notes that, “we don’t think, we don’t think that we’re that far outside. You know, how can anybody not see what I see?” This self-awareness is echoed in John’s discomfort with the title “serial entrepreneur,” often afforded him in the popular press. When ­contemplating the term, he offers unique insight into the mind-set necessary to continue to take the risks and have the confidence with entrepreneurial leadership activity, particularly when one is regularly the outsider in a target enterprise: The serial entrepreneur, I hate the word, and what happens is, the first time is so hard. You don’t trust yourself, you don’t trust anything, it’s just so hard and then you see, ‘Jesus, that wasn’t that difficult,’ and it isn’t. It really isn’t. I talk to a [university] class and they say ‘oh ya, it’s alright for you,’ and it is alright for me. But you know you just do it, and then you put together the team that could create the return. If I was meeting you here this morning, before you would leave I would have the company and I’d have the initial capital. We could do it before you leave, if I liked your idea. So, what happens then is, certainly, people who are, who are enterprising, entrepreneurial, see loads of opportunities. I think, before they do the first one,  A brand of Irish whiskey, produced in Tullamore, Co. Offaly.

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they don’t believe themselves. There’s the confidence thing back again. So, I would see more opportunities now than I’ve ever seen before in my life.

Despite been active in business for more than 50 years, John shows no sign of slowing down, “There are more things I want to do now, and up to now some of it’s focused on whiskey now [as CEO of Great Northern], some of it’s focused on derivatives of it, types of it and things they do. So, there will be one or two other things that I will certainly do. As I said I might back a bit out of resources (mineral exploration), I’d like to go back into the net (net) assets again. I ah, the stock market is very high at the moment but there would still be opportunities there.” When asked what it is that continues to motivate him, John discusses the trajectory from idea to fruition, “It’s the hunt rather than the kill for a start. I think that the best thing that can happen to you is that if you’re awake at 4 in the morning… and you’re ‘ya, I should do that,’ or have that idea that you should do something, thinking it through at 4 o’clock in the morning and if you can remember it the next day, then you do it, you start planning it, and then you see it in reality.” This is not to suggest that John is boundary-less in his entrepreneurial aspirations, and while open to opportunity, he is highly aware of his areas of interest and expertise: I’m not into tech; I’m not into property. It has to be something that I find interesting. Resources [mineral exploration], I’m not as interested as I was. Although there’s loads of opportunity, I think there’s a lot of them out there. I think I got battered and bruised, you know, by resources, they’re now more risky which they weren’t for a long time. Ah, and I would like to know, I need to know a bit more about some of the life sciences areas. I would love a mill with a water wheel.

On finishing the interview, John left with this final thought when contemplating entrepreneurial activity, “You only make money when you sell, and I was a very good seller. Everyone is a good buyer. Everything you buy is always a good decision at the time. The crap you’ve kept makes you a bad seller, and I’m a bad seller now. I was a very good seller. A very very good seller. I would like to get back to that.”

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Summary of Some of the Key Learning Points from the Chapter • Entrepreneurs tend to be comfortable with an outsider leader role, establishing businesses based on unforeseen opportunities recognised by them but not by others in their chosen industry. • A wide variety of entrepreneurial and speculative networks facilitate awareness of new opportunities, creating an insider perspective when the entrepreneur engages with these networks. • Serial entrepreneurs do not necessarily remain in a particular sector, they have capacity to recognise opportunities regardless of context. • The opportunist outsider is proactive by nature and rarely engages a new business opportunity as a defensive move. • Outsider leaders may see the entrepreneurial potential in failing organisations by viewing these entities through a change leader lens. • A lack of buy-in to the outsider leader’s approach or vision can be problematic, particularly if that is stemming from those who own or run the business as the ultimate insiders. • Decisions relating to organisational takeover or buy-out are made based on, for example, revenue or business potential, depending on the circumstance. • When moving from trading on a firm’s assets (e.g. liquidating an entity) to running that firm, serial entrepreneurs recognise the need for different skill sets, which are unlikely to reside in a single individual. • All things being equal, the serial entrepreneur believes business management should be performed by a specialist although circumstance can dictate that they perform the role of CEO, at least in the short term following takeover/creation. • The outsider leader often uses their networks to identify and hire those who have specialist technical skills needed to support a business and to perform required management roles. • These individuals are not necessarily soloists, and often recruit others with complementary skills to their own when engaging with existing organisations who have unrealised potential.

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References Carland, J.C., J.W.  Carland, and W.H.  Stewart Jr. 2000. The Indefatigable Entrepreneur: A Study of the Dispositions of Multiple Venture Founders. Journal of Business and Entrepreneurship 12 (1): 1–10. Hyytinen, A., and P. Ilmakunnas. 2007. What Distinguishes a Serial Entrpreneur? Industrial and Corporate Change 5 (1): 793–821. Ilgner, T., L.  Quinn, R.  Pittock, F.  Cassidy, R.  O’Sullivan, K.  Naidoo, and G.  McWilliams. 1996. The Entrepreneur, Cooley Distillery Plc, BA 359: Entrepreneurship & Innovation, University College Dublin, Ireland. Kennelly, J.  J. 2014. Cooley Distillery: The Independent Spirit of Ireland. Harvard Business Review Case Study Collection, Product #: NA0270-PDF-ENG. Kenny, I. 1991. John Teeling. In Out on Their Own, 341–363. Dublin: Gill & Macmillan Ltd. O’Gorman, C. 2010. John Teeling Life as an Entrepreneur. Teaching Case Study, Dublin City University, Ireland. Singh, R.  P., G.  E. Hills, G.  T. Lumpkin, and R.  C. Hybels. 1999. The Entrepreneurial Opportunity Recognition Process: Examining the Role of Self-Perceived Alertness and Social Networks. Academy of Management Proceedings, August. Teeling, J.  2007. The Just-Drinks Interview, September 11. http://www.justdrinks.com/interview/the-just-drinks-interview-cooley-distillery_id91495. aspx. Accessed Nov 2017. Westhead, P., D. Ucbasaran, and M. Wright. 2005. Novice, Serial and Portfolio Entrepreneur Behaviour and Contributions. Small Business Economics 25: 109–122. Wright, M., K.  Robbie, and C.  Ennew. 1997. Serial Enrepreneurs. British Journal of Management 8: 251–268.

7 Outsider Leader in an Outside Market: The Challenges of Market Entry

With sixty employees, the organisation in this chapter is defined as an SME (European Commission 2015). The case focuses on Dennis Van Booma, a co-founder in the exhibited company. Initially, an SME is dependent on the owner-manager for resource allocation and capability development and assumes a strong emphasis on centralised control (Kelliher and Henderson 2006). The founder or founders tend to be embedded in the day-to-day operations of the company and are close to all business stakeholders (e.g. customers, suppliers and employees), allowing for rapid response to market changes and providing a unique competitive advantage to the small firm. These market opportunities go some way towards alleviating the limited resources available to the SME affiliate to its small number of staff and limited access to funds (Brush et al. 2002; Julien and Ramangalahy 2003). At this stage in the business life cycle, much of the organisational strategy is tacit in nature and may not be formally recorded in the business plans (Murphy et al. 2018). However,

This chapter is written by Chris O’Riordan; Patrick C. Flood; Felicity Kelliher; Malcolm Higgs

© The Author(s) 2019 C. O’Riordan et al., Outsider Leadership, https://doi.org/10.1007/978-3-319-97463-7_7

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as an organisation grows and particularly if the SME expands internationally (as is the case in this chapter), the business requires a leadership approach different from that required in SMEs that concentrate on their home market. The owner-manager will likely need to reduce their involvement in the day-to-day operations of the company to focus on strategy development as the business expands (Murphy et al. 2018). As centralised control can curtail international expansion plans, the owner-­manager may also need to delegate to key employees (e.g. country managers) to allow the company to embed in new markets (O’Riordan and Kelliher 2007). By default, the owner-manager may no longer have a full appreciation of each customer, supplier and employee in each international market and may need guidance from those on the ‘front line’ to allow for an optimised management and reporting structure to be put in place. Each of these criteria brings the owner-manager role to a new level—that of outsider leader in each foreign branch of the SME. Dennis Van Booma’s company is currently at three international locations and anticipates opening in a fourth country in the near future at the time of the case. As detailed above, SMEs have specific resource and capability opportunities and constraints, and as such are influenced by particular factors affecting their potential to internationalise (Lu and Beamish 2001; O’Riordan and Kelliher 2007). A successful internationalisation strategy depends on acquiring information and knowledge about the market that the firm wishes to enter (Julien and Ramangalahy 2003), requiring the strategic decision maker (in this case, the owner-manager) to build capabilities in business, sector and macro environment analysis in order to optimise the firm’s strategic fit within a foreign market. When contemplating entry into a foreign market, particularly one where a different language or legal system prevails, the organisation requires careful consideration of the national landscape under the PESTEL criteria. Originally developed by Aguilar (1967), these macro-economic criteria are examined in addition to the anticipated market forces (Porter 1980) faced by all competing organisations in a particular sector (e.g. the bargaining power of customers and suppliers, identification of substitute products or potential new entrants and the relative intensity of current market competition). Market analysis helps identify an organisation’s SWOT relative to its current competitive landscape as well as their level of strategic fit

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a­ffiliate to the interaction between the company’s strategic objectives, internal capabilities and external opportunities. By c­ omprehending these criteria, an organisation may be better equipped to successfully enter foreign markets over its lifetime. As internationalisation is an investment that needs resources that may not result in fast returns, it needs to be an integral part of the firm’s overall strategy to embed these activities in the day-to-day operations of the firm (Andersson et al. 2004). In the SME environment, the assumption is that strategic decisions are made by the owner-manager as lead strategist (Kelliher and Henderson 2006) and that internationalisation is part or a consequence of an SME’s overall strategy (Andersson et al. 2004). Therefore, it is the owner-manager’s leader behaviour that dictates whether an organisation pursues an internationalisation strategy at all (Andersson et al. 2004). Andersson et al. (2004) advise that the owner-­ manager’s career should be followed to assess the impact of their behaviour on the pursuit of an international strategy in the SME environment. In the presented case, Dennis Van Booma’s career is tracked in this way. Finally, once an organisation expands beyond its national borders, both the organisation and its leader can be conceived of as an outsider in the entry market. A contingent factor in this process is the environmental dynamism experienced by the owner-manager as their behaviour, experience, motivation and beliefs (Harveston et al. 2000) have more influence on the decision to internationalise than either the size or age of the company. This chapter focuses on the individual behind the strategic decision to go abroad as the unit of analysis such that we can comprehend the dynamics of outsider leadership within an international landscape.

7.1 D  ennis Van Booma: The Entrepreneurial Leader as a ‘Juggler’ 7.1.1 Background Procentec is a Dutch company with its head office located in Wateringen, a town in the province of South Holland. It is a privately owned ­ISO-­certified business, with over 60 employees working across three international

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l­ ocations (with a fourth soon to open at the time of this case study) in research and development, production, sales, training and support services. The company was established in 1997 and initially concentrated on assisting other businesses with improving their networks that are built using PROFIBUS and PROFINET technology. These represent global standards for traditional fieldbus communication in automation technology and the more recent Industrial Ethernet. Subsequently, Procentec entered the training market as they sought to impart the extensive knowledge that they had acquired around network maintenance and issue resolution. In the intervening period, over 4000 people have undertaken certified training with Procentec. Product development (which is now the primary business) began in 2003, when the company released the ProfiTrace toolkit to facilitate pre-implementation network testing and live system troubleshooting. This was followed by other innovative product groups, including the ProfiHub family product portfolio, which helps to create the most reliable network infrastructure on the market, and ComBricks, a monitoring, networking and control solution. Ongoing development and innovating of these products and portfolios over the years have seen Procentec introduce improved cost-effective versions, compatible with existing networks as add-ons or replacement components, to meet customer demands for increased diagnostics and reduced system redundancy. These product groups have firmly put Procentec on the map as a key player in the network solutions market and they have grown from strength to strength since, in spite of their small size relative to much larger multinational corporations as competitors. Their most recent product, Atlas, was launched in April 2017, which has branched the company further into the growing Industrial Ethernet diagnostics domain. In development for over 12 months, Atlas provides organisations with network transparency through a compact device that employs a user-friendly intuitive web interface to help minimise costly downtime. Through the interface, organisations are made quickly aware of all potential problems inside the network. A weighted algorithm provides users with a quality score of the network, based on the different devices that are connected; this acts as a crucial early-warning system of pending issues to allow for pre-emptive and planned action. By developing the product from the ground up, Procentec ensured that Atlas was focused firmly on the c­ ustomers’ needs and is easily and quickly installed. It is also integrative with existing

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Procentec components. The product has already had an impact, being awarded a quarterly CE-Design Award by DARE!! Measurements (an accredited testing organisation) in 2017. In tandem, the service side of Procentec has also expanded, with the company now offering customers network audits, testing facilities, maintenance support online and on-­ site, commissioning and consultancy. This embeds the company with the customer and creates a key closeness between both parties that leads to a long-term mutually beneficial relationship. In the highly competitive technology sector, this is critical for long-term success. The case study focuses on Dennis Van Booma, the CEO of Procentec. Dennis, along with his brother and a close friend, founded the company and now leads the strategic development of the business. We examine how Dennis, who is now in his mid-40s, initially got into the business, how he has approached the challenge of an SME competing against larger businesses and multinational corporations and how he has helped to instil the company culture. In addition, the case study looks at Dennis as both a reflective leader and a leader in action. We then go on to consider two critical issues that he has had to deal with over his tenure. These concern ways to balance the need for leader control with demands for greater participation from others in an innovative business, and the tough choices that a leader can face when deciding whether to promote individuals to managerial roles from within or hire from outside. We find that Dennis, although ostensibly an insider by virtue of his ownership, corporate position and long-term involvement with the company and its staff, also demonstrates features of outsiderness as appropriate. As leader, he seeks to balance or even juggle these two in a manner that allows him to remain connected with the core business while sufficiently removed to make the strategic, sometimes difficult calls, which are necessary to grow and prosper on an international scale.

7.1.2 The Early Years Stemming at least in part from his family background, where his father passed away when he was only one year old (“I had to stand on both legs very early on in life”), Dennis has a very much ‘can-do’ and positive

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attitude. This is essential in a growth-focused, innovative technology business such as Procentec. His independence from youth became a strength and instilled in him a self-belief that much can be achieved by seeking out opportunities, querying and questioning, and through not being afraid to take a chance. Overthinking can mean that these opportunities are lost—the right timing is critical. Family is important for Dennis on many levels and represents an in-­ group of support and resources for the leader-entrepreneur, where he feels very connected. He and his partner have two young children, and the desire to provide a good life for them is one of his many motivations to be successful. This can, though, come at a cost, and he values their willingness to accommodate the arduous working life of an entrepreneur: “I think, in the last 20 years, you have worked so hard, I did sometimes 80 hours a week and the most important thing [family] you forget…I found the right partner. I got lucky.” On a work level, family is key on a daily basis as Dennis works in the organisation with his older brother, Harry, who is the CFO and also a shareholder. Dennis’ education puts him comfortably in two worlds: an undergraduate degree in microelectronics from The Hague University of Applied Sciences provides him with technical knowledge and expertise, while a subsequent executive MBA from Erasmus University Rotterdam later in his career equips him with a more business-oriented skillset. This combination, placing him on the border of both, allows him to engage and lead in different ways. He is capable of conversing with those working on the technology internally, and with multiple stakeholders inside and outside of the organisation on more macro and strategic matters. In this regard, as leader, he translates technology and business speak as required in a manner that the audience can comfortably understand. This emphasises the value of the ‘tech’ leader being exclusively an expert in neither world but essentially in both to a reasonable degree. He acknowledges that his initial move into the business was somewhat fortuitous, as he worked on a project relating to industrial data communication as a student: “…digitalisation was still on the eve of being utilised everywhere and I was fortunate to study those standards and develop a product out of it.” In addition, he was invited to participate as an adviser on an exhibition, where he helped people with questions related to the

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new technologies. This allowed him to develop a deeper understanding and engage with stakeholders, but also highlighted both the interest of the market in new technologies and the lack of existing knowledge amongst those operating within. Crucially, these represented potential customers for technologies that Dennis was comfortable with, ripe for the picking to an energetic new entrant. The key was recognising the opportunities earlier than others and taking steps to pursue these, vital traits of any successful entrepreneur. This has helped to put Procentec at the cutting edge of innovations in their sector.

7.1.3 B  attling the ‘Giants’ by Being Different and Unconventional in Approach Dennis demonstrates that, to be successful as an entrepreneur and as a leader, one needs to emphasise action. He notes how he always had a passion for invention and improving systems, and these are areas that give him great satisfaction. This is a critical attribute in the fast-moving technology business that he operates within, where making an impact and shaking up the establishment are challenges that the smaller business must tackle: You enter a business where other companies may be around already for a hundred years, have a system of a hundred years and a technology of a hundred years. And suddenly you enter with something so disruptive, and you’re so fast and agile, and the others are unable to pick it up.

His battles with large multinational and better-resourced competitors illustrate how bringing the fight to them, acting differently and taking time to contemplate what it is that customers really value are critical for success in an SME. While the world of technology may be high-speed in some respects, in other aspects companies can behave surprisingly conservatively and in a seemingly non-customer-centric manner. This represents an opportunity for the outsider to strike, as their nimbleness—their capacity to change radically and adapt—and their willingness to act somewhat unconventionally give them a sort of David-versus-Goliath type advantage. The key is recognising this, embedding it and adopting

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such an approach consistently throughout the organisation, to ensure that customers can rely on the outsider enduring beyond merely today: Of course by bringing in innovations—that helps a lot and also that you bring a message forward and you participate at events where the crucial ambassadors are sitting and that you leave the tie at home. That you become part of that world, and relate to those people and bring forward these innovations and wear them. For example, the other crew was still doing everything on a sales perspective and an arrogance perspective because they are large, and that you [Procentec] really feel connected with those customers. And you’ve got the right ambassadors on board and things can go really fast. The competitor has other things to do and then they just drop completely the product line.

7.1.4 Cultural Design and Co-ordination Procentec is an international business. Although based in the Netherlands, with sales offices in Italy and Germany (and the UK shortly), the bulk of their business in terms of sales and services happens outside of their home country. Not only are their distributors and customers global, but so is their workforce. The technical skills needed to develop Procentec products are in short supply in the Netherlands, and so the company have hired extensively from other countries. In order to facilitate the influx of nationalities and to avoid misunderstood communications, the agreed working language in Procentec is English: “That means emails in English, talking during lunches in English and some official documents in English.” Consequently, the insiders are required to make fundamental changes to accommodate the outsiders, which is a reality that is driven by the market and a necessary choice for management to make in order to globalise. Thus, the company is a mix of highly intelligent staff from many varying backgrounds, functions and skill sets. Given their differences, Dennis acknowledges that they also have a diverse range of values and ways of thinking. Consequently, as leader, he seeks to unite the organisation behind his core values, which he describes as winning both personally and collectively and sharing the win with the team. In this respect, Dennis

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believes in the merit of financial rewards as a means of driving performance towards victory and sharing credit for successes with others. Thus, these values are connected: one (sharing) helps to achieve the other (winning) while also being an outcome of winning itself. It is the responsibility of the leader to instil such values in the team—something Dennis sees as crucial to their continuing success. As part of his leadership approach, Dennis actively plays the role of integrator. Within the organisation, he seeks to blend knowledge and insights across the different levels by engaging with staff through lunch-­ time talks and open discussion on the floor. Regular dialogue and sharing of ideas and opinions is critical as these can come from anyone, anywhere, “especially from the bottom layers of your company. It could even be the cleaner, because they are connected to a lot of people because they do not form a threat. They hear a lot.” Thus, Dennis acts as a ‘boundary spanner,’ as he bridges between internal stakeholders to unify and represent them and their perspectives at a senior level. However, as we will explore shortly, there are limits to Dennis’ willingness to integrate others’ opinions in some key areas of the business process.

7.1.5 T  he Reflective Leader: Contemplating Approaches As a leader, Dennis is very self-aware of who he is, his core values and how he behaves. This allows him to adapt and change where this is needed. With an MBTI score of ENTJ,1 he acknowledges that his extroverted nature means that he connects well with other people while being intuitive helps with understanding others as well. However, he can also be strict and at times quite direct in how he delivers his message, again reflective of his MBTI personality type. This can necessitate some adjustment when speaking with groups in Procentec, as he works on greater elaboration of his message and taking more time in delivery. In part, the changes that Dennis has made to his own behaviours and approaches  The Myers-Briggs Type Indicator (MBTI) refers to one of sixteen personality types; an ENTJ (extraversion, intuition, thinking, and judgment) score suggests an individual who is self-driven, motivating, energetic, assertive, confident, and competitive. 1

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stem from his willingness to seek out coaching, particularly internally and even from those at more junior levels within the firm. Dennis believes that the right person will listen to the leader’s ideas and contribute their own outsider perspective, as they are connected to other networks that may be harder for the leader to access. While part of the culture by virtue of their position and membership, it is important that the leader does not become complacent in their perceived knowledge of the current sense of situations internally. To avoid distance widening between Dennis and the day-to-day operations as the business expands, he subscribes to the notion of leading by ‘walking about’ to keep in close contact with his team. He starts each day by dropping his jacket (symbolically removing robes of authority or seniority) and walking through all of the offices to say a “good morning” to his colleagues. While a simple step to take, culturally this is very effective as “you can also feel some sentiment as to what is going on that day. Try to spend some time with people that want to share some feelings.” This ensures that the leader stays at least on the edge of the insiders’ domain and does not lose that important connection. Openness with one’s followers is valuable for a leader. By sharing parts of your life story with other team members, essential trust is built. Dennis refers to this as “the Johari window,2 where you open a bit of your private life and tell a bit about your struggles.” Instead of locking away life outside of work as off topic or out of bounds, one shows that they have weaknesses and issues the same as everyone else: “because you are not Superman as a leader.” This is a more realistic, honest picture of the person who leads the business and helps to develop trust and connectedness with employees. A leader does not have to be perfect to be a good and effective leader. To reinforce acceptance from their followers, Dennis knows that it is critical for the leader to recognise the contributions made by others; they need to feel accepted and appreciated as well if one expects reciprocity. In his case, ‘We’ takes priority over ‘I,’ even if the leader is the idea instigator  The Johari window (Luft and Ingram) is a technique that helps people better understand their relationship with themselves and others; four criteria (known to self, known to others, not known to self, not known to others) amounting to four cells: arena (known by all); blind spot (not known to self ); Façade (not known to others) or unknown. 2

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and in spite of their natural drive to win. Thus, the team shares in the long-term rewards, but the leader—as part-owner, in Dennis’ case—ultimately benefits the most anyway. In essence, by meeting the needs of the many, the needs of the few are also more than met, “and that creates a likeability factor.” He believes that arrogance should be avoided: the leader needs to remain humble and level headed, retain their overall perspective and values and always remember those around them who contributed to the successes. Otherwise, they can become a resented outsider and rejected by the in-group because of their negatively inclined behaviour.

7.1.6 T  he Leader in Action: Blending Distance and Connection Interestingly, Dennis does not subscribe to the notion that leaders should be implementers in their organisation. He contends that by being involved in fieldwork, the leader is then subject to their own set of KPIs. The issue is not when leaders succeed but where they fail to hit their targets; this sets a bad example for those at levels below the leader who can then “drop the ball themselves.” Thus, the detail around problems and decisions are the concerns of others, not the leader: “I have a saying ‘when everything is important, nothing is important’…People should not bother me with little issues, they can do it themselves.” A strong and effective leader will extract themselves from such minutiae and the operational morass, as they need to remain outside of such problems that are implementation-related challenges and focus instead on the core organisational purpose. It is important for the leader to adopt a pace that is consistent with that of their team: “The hard lesson in life is that it’s sometimes faster to take the sand path rather than the paved road.” Dennis has found that, as leader he may be at a particular point and heading for the finish line on different decisions or choices, but everyone else has yet to start. Consequently, considerable energy and time is spent backtracking. He has learned that a better strategy is to approach the journey in a more incremental manner, so that everyone feels involved in the process:

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“I think sometimes they think I’m too fast and sometimes I should slow down a bit and share more information.” Understanding the information and comfort needs of others can give rise to some compromise, as we will soon see. When dealing with outsider investors, it is vital that insiders behave in a manner that demonstrates equity, trust and integrity, as they have access and knowledge that can be wrongly exploited. In the case of Procentec, Dennis and his brother are the owners (both working in the company) along with a non-family investor, and are very conscious of this. The structure provides the company with a different, less insular perspective on strategic choices, as an external opinion is contemplated as a necessity. Decisions at corporate level acknowledge this arrangement and need to avoid any perception that it is the majority family/insiders on one side and non-family/outsider on the other. Indeed, Dennis and his brother see the benefits of an outside opinion when they are not in agreement: “… maybe in the beginning it feels rotten that we have to share some emotions. But, at the end, we adore it because again it means that there is a clean slate.” Thus, it is important for the insiders to be aware of their natural advantages and at times, where appropriate, take action to moderate or even nullify this in order to be fair to all where a positive insider-­ outsider relationship is organisationally beneficial. In a technology company, leaders need to avoid what Dennis calls “The Leader’s Trap.” Initially, he argues, the leader is highly motivated and heavily involved, they are calling the shots. But then they encounter people with different ideas and perspectives, which certain leaders believe slows everything down. These people (outsiders) can even be internal to the organisation, it is their lack of unity with the leader’s views that distinguishes them as being on the outside. If the leader sees this as a ­blockage, as the outsider is getting in the way of the leader’s mission, they are unlikely to seek explanation for the outsider’s standpoint. Frustration with and resentment of these perceived outsiders or naysayers gives rise to the leader declaring that they know what to do and others should just follow and move out of the way. The blame phase comes next as the organisation begins to slip away, until finally motivation is lost and failure is experienced. In essence, the trap that the leader falls into is a lack of balance between being in control and allowing others to share in this

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control with them, relegating them instead to an out-group existence in spite of their knowledge and experience. The role of the leader is then less about autocratically dictating in a world filled with valuable stakeholders and potential outsiders and more about subtly influencing them as they move forward, engaging with their concerns: “…you have to stand side by side, whisper in the ear, I call this ‘the power behind the curtain’.” In this way, outsiders can be re-converted to insiders if the approach taken is less adversarial and more inclusive before the crisis point is reached. In recognising this, Dennis has taken steps himself to compromise on his natural desire to be in control and accepts the necessity of allowing participation where it is beneficial to Procentec. Thus, as a leader, Dennis demonstrates that it is important not to be entrenched in a single position and end up trapped in an impossible situation due to a dogmatic view, but equally not to always be turned by the desires of others. In this respect, a blended approach is helpful, where one combines the need to be in control with the acknowledgement that stakeholders must be given leeway to work their way through challenges and opportunities and make decisions and choices based upon their analysis and sense of the situation. The key for the leader is to differentiate those aspects that are not up for negotiation and are decided upon centrally from other aspects of the firm’s operation and strategy that appropriately reflect a participative authority and permitted autonomy.

7.1.7 The Empowerment Dilemma Modern management thinking seems to affirm the importance of empowering the workforce: “Nowadays, in this society, everybody desires ­freedom. We created it ourselves, we should appreciate it.” By way of enhancing contemporary employee enjoyment of the job and motivating them on to greater performance, Dennis argues for a more refined perspective here: “I believe in two leadership styles that are combined.” He acknowledges that for him as an entrepreneur and an innovator, empowering people can be “…difficult in the beginning, because you have to let things go” and something that has had to evolve for him over time: “Sometimes, it hurts when you think right and it becomes left, but you just have to follow it. One more voice to the outside world.”

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Today, he recognises the value of delegated decision making and that the leader cannot be a dictator in a stakeholder world: “The empowering, that’s a must, especially the people with high IQs.” This relieves him and the senior team of excessive involvement in what are largely operational or tactical trivialities, and allows them to focus instead on mission critical strategic matters. In addition, greater participation gives other staff increased ownership of what they do, which leads to better long-term outcomes for the business: “History has shown us that when three people or more come to a consensus, on average you have the best decision.” This takes effort from the leader, with as much experience and knowledge of the technology as Dennis has, to avoid looking over people’s shoulders and correcting them instead of allowing them to make mistakes as learning and development opportunities. This approach also recognises the potential for innovation in approaching tasks in an alternative manner. Otherwise, the outcome can be damaging to the organisation as staff do not develop self-confidence, begin to fear making errors or trying new avenues of exploration and any benefits of empowerment are lost. However, in spite of this acceptance, Dennis continues to have doubts that empowerment and participation is what everyone really wants. He believes that financial rewards and the luxury that this allows you to acquire can be valued more than the grief that comes with sharing control and responsibility. Thus, empowerment for empowerment’s sake is not the answer, it needs to be tailored and appropriate: I have a tendency to feel that sometimes people want to step back a bit to the old system where people decide for you. You get your salary and you’re happy. You really want to contribute but not go into this stress situation.

The key factor, then, is the timing and scope of empowerment, and when one ‘lets go’, as the legitimacy of the leader needs to be maintained. In Procentec, the innovation process is highly centralised, where new products and offerings are initially invented: “I say there has to be a small part of controlling, but that controlling takes place on the point [of ] getting the innovations on paper.” From the company’s perspective, this is their core competency and what adds value for customers ahead of the competition. The reason for centralising this process is that too much

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empowerment means that everyone wants a role in decisions around innovation. Excessive interference stifles and slows the essential entrepreneurial aspects that require focus and speed: “If you are in an innovation business, a high tech business, you have to be fast and you have to be very strict in what you create.” Innovations are arrived at “on a non-Stalinistic method” by a select few personnel, and then spread throughout the system to those in production and sales where the effective empowerment happens as others have their input. While this can create tension and conflict, particularly amongst a highly educated and skilled workforce, this is the price to be paid to ensure that ideas are moved along in an uninterrupted fashion and critical momentum is maintained. Indeed, Dennis contends—as part of the Leader’s Trap—that stalling of progress because of excessive interference can become an even greater ill, as eventually the leader may become dangerously autocratic out of frustration and attribute adverse outcomes to others, whether they are at fault or not. Thus, while compromises and mass consensus are not possible around the innovation phase and are avoided, beyond this the team have their say openly and are listened to: The innovation was design this product and the group think—because you want them involved a bit—is what is the colour? If the group says yellow and you think green, then it’s yellow. You have a vision where you see the product on the shelf and you see a green product on the shelf but in the end will be a yellow product. But at least everyone is on board.

Thus, Dennis contends that, when empowerment goes too far, ‘disruptors’ can appear: “It is a bad word, but I would call it a disease.” These are individuals who, through their actions, inactions or words, harm the progress and momentum of the firm. Although they are part of the in-­ group through their position, they—perhaps inadvertently—behave in a manner that is more in tune with out-group membership. While debate and discussion are welcomed (but beyond the innovation phase, in Procentec’s case from Dennis’ perspective), this must reach an end-game in order for products to be launched and profits to be earned. Thus, a dissenting voice or alternative view can be valuable and may give rise to important changes, but if this becomes disruptive, it needs to be addressed

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before its negativity infects others. Dennis argues that, as a leader, “you should not be afraid to dismiss a disruptor…because disruption causes more harm than to let’s say leave him on in his castle,” even if they are highly skilled and in short supply as is the case in the sector that Procentec operates in. In addition, Dennis believes that excessive empowerment can lead to burnout amongst staff when management place too much emphasis on sharing power. This can arise because, as part of shared responsibility, staff become over-burdened with multiple KPIs to such an extent that “they run against a wall.” Thus, in an ironic twist, too much freedom can end up becoming highly restrictive. While recognising that his views on empowerment may be somewhat contrarian and different, Dennis contends that this approach works for Procentec, with the proof being their track record of developing highly innovative and market-leading products in a globally expanding business.

7.1.8 F rom Within or Without? The Challenge of Managerial Recruitment One of the difficulties for insiders is the emotional attachment that can exist, both between them and the leader and them and the organisation. Naturally, such attachments are primarily valuable as people become familiar with and care for each other, which fosters team work and a united effort towards a common vision. In the early evolution of many businesses—and Procentec is no exception—managerial appointments are organic and from the pool of staff already in situ. This makes sense: existing employees know the business and the customers, they ­understand the technology and are culturally acclimatised, and have an operational track record of some success. In addition, they have a relationship with the leader, the proximity of which can be close given the small size of the workforce. Appointing such personnel as managers makes sense on many levels in the early stages of business evolution, and Procentec have experienced some enduring successes here, though not as many as they might have anticipated. As the organisation grows, it can be difficult for Dennis as the leader to disappoint such loyal staff when it comes to promotions.

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However, appointing from within may not be the best decision for the organisation if they are ultimately not suited to the role, lacking in the capabilities required to transition from a technical to a managerial mind-­ set. Equally, expectations of role fulfilment may require competencies that are not available to that employee, potentially resulting in a loss of status or respect amongst their peers. Indeed, as Dennis highlights, the insider may suffer as they experience demotivation in the new role and find that the skills they once had in a technical sense as their strengths have depleted from not being used or updated on relevant work. Thus, “they become a victim of that situation,” effectively stuck at a crossroads where they are not cut out for management but now also out of touch with their previous valuable role, even overtaken by others. In essence, the insider suffers because of their ‘insiderness,’ providing a cautionary and demotivating tale perhaps for others contemplating such moves. The outsider does not come with internal baggage, they begin with a clean slate and are selected for their applicable skill set and not for their friendship or longevity of service. Equally, the arriving outsider does not have a connection to the firm, its products or its processes that may blind them in progressing the goals of the organisation. They are not part of the internal ‘establishment’ that has organically developed and settled over a period of time but arrive with different thinking, competencies and experiences, and a new hunger that is needed in the very competitive tech industry. Outsiders are more comfortable with the concept of changing and more willing to engage in the actions required to facilitate this; Dennis has found that insiders can talk about change and appear to be on board but show reluctance when actually pushed to engage. Thus, a new person from the external environment, who is not entrenched in the ­status quo ante, can bring an injection of energy and focus otherwise lacking. Dennis speaks highly of his sales director, Matt Dulcey, who he initially met while they undertook an MBA together (which still indicates that relationships do matter, though in a different context where managerial and leadership competencies are perhaps made more evident). Matt represented a clear outsider as a former entrepreneur himself, with multi-­ sector experience, who was not embedded in or biased by the Procentec culture or the technology. His task with the staff was clear: “Give them

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structure, give them KPIs and bring the stuff forwards.” Thus, with no real emotional connection, there was no great distraction or loyalty to established thinking. The outsider mindset permits a new and exciting picture of the future to be imagined. However, outsiders still need to find ways to learn the organisational culture if they wish to integrate and function effectively. Dennis notes how Matt would come directly to him if he needed advice on the technology or what the needs of different customers were, aspects that an insider would naturally know but which need to be clarified early on for those coming into the organisation. In a technology business, which is highly reliant on demonstrating a deep and convincing command of the products for sale and an understanding of how customers are to be dealt with, such cultural sensitivity and nous is essential. Thus, the arriving outsider benefits from access to helpful and sympathetic insider(s) without an agenda, who are willing to guide them through the unknown, at least in the initial stages. In this respect, the disadvantages affiliate to the outsider can be accommodated and compensated for in a reasonably straightforward manner, with a little forward planning and compromise. Ultimately, it appears to be perhaps easier and more effective to teach the outsider the insider perspective than it is for the insider to grasp the outsider equivalent.

7.1.9 Conclusion and Reflection Leaders and managers are jugglers by nature, as they try to consistently keep many different balls in the air at the same time in order to appease stakeholders and achieve objectives. We argue that Dennis is no different here, but what is also prominent in his case is the need for him to juggle daily being both an insider and an outsider, even within the organisation itself. Whatever way you look, he is clearly an insider—CEO, co-founder, spent the great bulk of his working life in the same company, knows his staff by name; he is Mr. Procentec, a ‘company man.’ This is a good thing, as Dennis is passionate about the organisation and its staff, wanting to achieve success for himself personally and those working with him. He is highly connected with internal stakeholders, shares personally with them,

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listens to what they have to say and supports them along the road. Loyalty is one of the rewards he attains for this, but is loyalty enough to be a success? As an organisation, Procentec itself is something of an outsider, representing a small fish swimming amongst veritable global sharks in its sector. To compete, the organisation thrives on being different to the more conservative competition in how it engages with customers in a more informal and inquisitive manner. It looks for key “ambassadors” within potential customers and establishes a connection that is inclusive in nature, seeking out customer feedback and insight for the betterment of the Procentec offering. Crucially, Procentec strives for consistency in this relationship, not walking away from fruitful product lines like some of the competition appear to. They are David, the outsider, battling the giant multinational Goliaths who seemingly have all of the advantages of size and dominance in the market. But, as in the story itself, the outsider re-balances the odds by looking for opportunities and exploiting the insiders’ weaknesses around adaptability and their capacity to change at pace. We also see another side to Dennis, the ‘company man’—that of the outsider entrepreneur who maintains a distance from the day-to-day operational activities within his own firm. He has learned, over the years, the folly of the leader being active in implementation, and he withdraws from this. Instead, Dennis seeks to rise above operational matters, keeping a watchful eye, intervening when required but not interfering—it is the invisible hand of the outsider as he whispers from “behind the curtain.” This retains the leader’s influence but allows others to get on with the work, offering them autonomy to make mistakes and to learn from this action. His dual education means that he is comfortable in both the technical and business domains, as he connects and translates between each of these disciplines, but his experience has taught him the importance of adopting a ‘light touch’ when it comes to the detail of implementing strategy in his organisation. Dennis’ approach to executive appointments suggests that he himself can favour outsiders as their inherent advantages outweigh their risks, which can be seemingly easily accommodated anyway with insider support. How does this align with his sense of loyalty and caring for his staff?

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In simple terms, it’s a business, and Dennis’ approach is consistent with Procentec’s ethos regarding the hiring of technical staff from other countries. Dennis does what is right for Procentec overall and its success, which—because of his core values of winning and sharing—is right for those who he is ultimately loyal to in return. His preference at times for outsiders is a logical decision in a commercial domain, head over heart, and one that he feels works. This may not be the same for every organisation, but it serves Procentec well. This demonstrates that the leader, even in a small company, has to be able to step outside of their internal, relationship-­ filled role and make realistic choices from an objective standpoint. The centralised control of innovations that Dennis has instilled in the organisation does not meet with unanimous approval all the time, and he has had to face down and even remove disruptors. His insightful articulation of The Leader’s Trap illustrates how damaging excessive interference can be to the business, and this helps to justify the perhaps more unconventional approach that he has taken. However, this is difficult where close relationships have been built and are reinforced daily, as he walks the offices to engage with his staff. But what is the alternative? If Procentec does not innovate and is not at a pace appropriate to the sector, they stagnate; this is their core competency and has brought them great success. Take their new product, Atlas, where the development period was over a year. Delays here would represent opportunity and sales lost for a business without the resources of the multinational giants. Keeping a tight grip of the innovation process ensures consistency and, most importantly, works for the organisation. Why change what is not broken? The involvement of others after this point is actually welcomed. Dennis is not an autocrat, which would simply not work with a highly skilled workforce who need to have a voice. But, in these circumstances, he sees those tasked with innovation—including himself—as in-group members within the organisation, with other staff effectively temporal outsiders for this purpose until their input is welcomed. As leader, he has to bridge or span these virtual groups and maintain order: he exists in both domains simultaneously. Thus, we suggest that Dennis is an insider and an outsider leader at the same time—in his attitude, in his behaviour, in his philosophy and within

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his organisation. This is not accidental; rather, he has deliberately chosen to be this ‘juggler’ because it gives him the best of both worlds in a fast-­ paced, highly competitive sector. Certainly, the small size of the business with just over 60 staff and a handful of locations helps facilitate this approach, and as Procentec expands and internationalises further in the coming years, Dennis may need to adjust to accommodate greater numbers and complexity. Whether that adjustment is more outward or inward in his leadership style remains to be seen. Summary of Some of the Key Learning Points from the Chapter • As SMEs internationalise, owner-managers can evolve into outsider leaders in their international locations where the organisation itself is also an outsider. • A leader may appear to be an insider because of their association to the organisation, but this does not stop them from thinking and acting like an outsider. • There is value in the leader adopting both an insider and an outsider perspective, depending on the circumstances that they are facing, even in SMEs. This can require a degree of juggling on their part as they strive to remain connected to operations and influence their followers, while sufficiently separate to think and act strategically. • Supports are important for both insiders and outsiders. • An outsider view may need to be facilitated and encouraged by insiders through their positive behaviour and engagement as opposed to resistance and rejection. That said, there are red lines in these relationships, and it is important for the leader to identify and share the ­existence of these pivot points with others and stand over decisions made when these red lines are encountered. • Leaders with both technical and business skills can operate as crucial ‘boundary spanners’, occupying and negotiating a space between two domains that keeps technical and business specialists unified. • Small businesses can compete with larger entities when they act in the manner of an outsider by behaving differently, shaking up the market and playing to their strengths while exploiting the weaknesses of the traditional insiders.

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• Leaders are not implementers and need to remain above this aspect of business management, adopting a ‘light touch’ approach through intervening as opposed to interfering with the implementation process. • The leader needs to work at a pace that gets them, their staff and the organisation to where they need to go, but not at the cost of losing along the way those colleagues who need to get there as well. Thus, it is not just about articulating the vision but also about bringing people along the journey. • Empowerment can be a valuable tool for a leader to engage employees in their vision for the organisation, but this needs to be used appropriately and where it is effective. Too much empowerment can stifle progress and create disruption, with too many voices and opinions. • The leader has to be cognisant of where a centralised approach is in fact better, even in areas such as innovation. In this respect, they may end up treating some organisational insiders as outsiders by virtue of being temporally outside of the decision. • Promoting insiders from operation/technical to managerial roles may demonstrate reward for loyalty, but can be damaging for the organisation and the individual if they are not sufficiently experienced or suited to the role. • Hiring outsiders for managerial and leadership roles brings new thinking and energy, a willingness to embrace change and a lack of baggage; however, this must be tempered with a lack of historic business knowledge. • What the outsider is missing—in terms of cultural and organisational nous—can be learned with the help of sympathetic insiders and forward planning.

References Aguilar, F.J. 1967. Scanning the Business Environment. New York: Macmillan. Andersson, S., J. Gabrielsson, and I. Wictor. 2004. International Activities in Small Firms: Examining Factors Influencing the Internationalization and

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Export Growth of Small Firms. Canadian Journal of Administrative Sciences 21 (1): 22–34. Brush, C.G., L.F. Edelman, and T. Manolova. 2002. The Impact of Resources on Small Firm Internationalization. Journal of Small Business Strategy 13 (1): 1–17. European Commission. 2015. User Guide to the SME Definition. European Union Ref. Ares (2016)956541. Harveston, P.D., B.L. Kedia, and P.S. Davis. 2000. Internationalization of the Born Global and Gradual Globalizing Firms: The Impact of the Manager. Advances in Competitiveness Research 8 (1): 92–99. Julien, P.-A., and C. Ramangalahy. 2003. Competitive Strategy and Performance of Exporting SMEs: An Empirical Investigation of the Impact of Their Export Information Search and Competencies. Entrepreneurship Theory and Practice 27 (3): 227–245. Kelliher, F., and J.B. Henderson. 2006. A Learning Framework for the Small Business Environment. Journal of European Industrial Training 30 (7): 512–528. Lu, J., and P.W. Beamish. 2001. The Internationalization and Performance of SMEs. Strategic Management Journal 22: 565–586. Murphy, M., F. Kelliher, and D. Harrington. 2018. Exploring the Perceived Impact of Strategic Learning Plans on Growth-Focused Small Service Firms. In Contemporary Issues in Entrepreneurship Research Creating Entrepreneurial Space: Talking Through Multi Voices, Reflections on Emerging Debates, Emerald Book Series, ed. D. Higgins, P. Jones, and P. McGrown, 157–175. UK: Emerald Publishing Limited. O’Riordan, C., and F. Kelliher. 2007. A Study of the international Management Practices of an Irish SME: The Case of FLI Environmental, Irish Academy of Management Conference Proceedings, Queens University Belfast, September. Porter, M. 1980. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press.

8 Outsider After the Fact: Leading in a Founder-Present Business

“There is a critical difference between starting and managing a successful firm.” (Boeker and Wiltbank 2005, p. 131)

A founder-led company’s success primarily depends on the entrepreneur’s leadership skills, their management capabilities and their influence on the growth of the business (Koryak et al. 2015). If one assumes that the founder embeds themselves as the organisational leader following the entrepreneurial event, the relationship between leader personality, organisational characteristics and firm performance is far stronger than in other firms (Khedhaouria et al. 2015). These businesses rely on the founder’s approach to strategy, and the interplay between entrepreneurial traits and business characteristics (Flanigan et  al. 2017) to succeed. Thus, the founder serves as a locus of control and decision making, thereby occupying a position of unique influence in the organisation (Simsek et  al. This chapter is written by Felicity Kelliher; Patrick C. Flood; Chris O’Riordan; Malcolm Higgs

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2015), one which could ultimately deter its optimum development in the absence of outsider influence. Founder-led companies are associated with niche strategies: simple, informal structures and intuitive, risk-embracing decision making (Miller and Toulouse 1986). While a small number of founders focus on formal strategies, structures, processes and procedures depending on their personal orientation (Murphy et al. 2018), this approach is far less prevalent in small firms. This is despite findings that processes, routines and resources underline substantive capabilities that enable a firm to grow (Koryak et al. 2015). This anomaly may be partly explained by the reality that the founder as business leader becomes accustomed to autonomy in all aspects of the business and while they may seek out information from others when making decisions, they are unlikely to delegate to employees when forming the organisation’s strategy (Kelliher and Reinl 2009). As such, the business strategy plan tends to depend almost entirely on one mind (that of the founder), is informal at best and may not even be articulated to internal or external stakeholders (Murphy et al. 2018). One of the challenges of an entrepreneurial personality is that some of these traits are detrimental to the organisation’s optimised success once the business evolves (Boeker and Wiltbank 2005). As articulated by Jayaraman et  al. (2000), “a founder’s ongoing involvement in general management activities may be decreasingly valuable or even detrimental to a company’s success as the firm grows” (p. 1216). Research shows that once the entrepreneurial event is over, founders are less enamoured with the day-to-day running of the business including the development of appropriate structures, processes and procedures that need to be embedded in the growing company in order to succeed. Growth may also necessitate hiring staff and many founders are inexperienced in managing human resource development within the firm. The recommendation is therefore to introduce functional diversity (Boeker and Wiltbank 2005), as attempting these activities unaided may lead to a dissatisfied workforce and, ultimately, diminished customer base. This leads to the conventional wisdom that the addition of professional managers with more managerial than entrepreneurial oriented capabilities is advisable to successfully lead the firm as it develops (Willard et al. 1992).

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Notably, the relationship between an entrepreneur’s personality and the organisation’s characteristics is more significant in dynamic business environments, such as the commercial hot beverage sector presented in this chapter. As a result, these firms often identify unmet needs through the application of niche strategies (Miller and Toulouse 1986), even in mature markets. This is partly because founders often have a strong internal locus of control1 and pursue more product innovation, are more future oriented, and tailor their approaches to the circumstances facing their firms (Miller and Toulouse 1986). When first created, these firms are close to the market facilitated by their simple informal structure and direct proximity to their customers (Kelliher 2007). Assuming they can hone their forecasting skills, they are likely to spot changes in the market before others, allowing for the capture of competitive advantage in a dynamic environment. It is important to remember that while the entrepreneur may have successfully entered the market with a specific niche product or service, both customer demands and market dynamics including the introduction of substitute products and new entrants necessitate perpetual innovation to ensure market retention and growth (Dunne et al. 2016). The founder business may therefore outgrow their original niche strategy as an established market player, whose actions can now be observed by other market players and potential entrants. In addition, the size of the original niche segment may be insufficient to meet their revenue aspirations, and the ‘small, proximate and agile’ benefits described above may dissipate somewhat as the company grows. Thus, innovation is required to retain or enhance the founder business’ market position, particularly in a dynamic market, requiring time to be spent on developing their offering. However, the general management requirements described above can often take the founder away from activities such as strategy formulation, innovation and business/market development (Dunne et al. 2016). It is worth contemplating a final aspect of growth-oriented founder-­ led firms that may impact the decision to introduce an outsider leader: that of personal preference. The options at this point include battling on  Internal locus of control: A belief that an individual can have control over events in their lives and that outside factors can be influenced by one’s actions. 1

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in the hope that the founder will ‘get it right’, selling the business and thereby ending the entrepreneur’s involvement in its operation or embedding a management team with complementary skills to that of the founder, who can then focus on strategic elements of future business development, where their own skills are likely to lie. While a less prevalent option, despite the value of different managerial capabilities to handle the increased complexity and managerial tasks of a growing enterprise (Boeker and Wiltbank 2005), the introduction of an MD into a founder-­ led company is the focus of this chapter. Research has paid special attention to the implications of leadership by founders vs. non-founders in the same company (Daily et al. 2002). In the case of small firms, the power and central position of the founder affords them a higher relevance in the determination of the business’s orientation (Simsek et  al. 2015), influenced by their leadership style and personal characteristics. The introduction of a non-founder leader offers us a basis for analysis under the auspices of outsider business leadership. This outsider leader has a different leadership style to that of the founder, while the founder position is adjusted based on the outsider’s introduction into the business (Simsek et al. 2015), offering us some interesting insights into the insider-outsider dynamic in a growth-focused small-firm environment. Grace O’Shaughnessy joined Java Republic, a small founder-led Irish Coffee Roaster in 2006 as their Operations Manager, stepping into the role of MD on behalf of the founder shortly afterward, as he moved into the CEO role in the company. This chapter discusses Grace’s outsider leader journey in the last 12 years within Java Republic, as it grew into a mid-sized operation with over 75 employees and an annual profit of EUR€500,000 (javarepublic.com 2018). It discusses the inherent tensions (and opportunities) that existed during the initial changeover from founder-focused leadership to that of a professional management team and highlights the benefit of honest and open communication when building trust in the outsider MD–insider CEO relationship (Boxer and Berry 2014). The dyadic relationship that has developed between Grace and the company founder in the interim period is explored in consideration of the dynamic nature of business development and the market it occupies. Outsider-insider equilibriums are highlighted at various j­unctures, while the authors acknowledge the reality that ‘nothing stays the same forever.’

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8.1 G  race O’Shaughnessy: Coming in from Outside to Lead with the Founder 8.1.1 Background Born in the mid-1970s, Grace O’Shaughnessy is originally from rural Ireland, the eldest of five children. Although her parents were not from a business background—her mother is a homemaker and her father worked for a pharmaceutical firm—she was sure of her professional path from a very young age, stating that she “always wanted to be in business.” She “always loved food science” and “had a dream…to go away and travel and visit Africa and help them grow crops.” While this dream is yet to be realised, Grace is interested in “seeing people thrive on very little and being able to help them do that.” When reflecting on her early ambitions, she mused that “maybe it was the fact that I was the eldest” that she had “always envisaged that I wanted to lead people, work with people.” As her education evolved, Grace solidified her interest in food and beverage, and studied food and food science at Dublin Institute of Technology, requiring a move from home. During her studies, Grace had a work placement in Green Isle Foods, Ireland’s largest frozen food and manufacturing company and an integral part of the 2 Sisters Food Group, the third largest food company in the UK and one of the leading food manufacturing companies in Europe (greenislefoods.ie 2018). The role involved “analysing proteins, fats and carbohydrates, very much lab work” and following her work experience, she was offered a role with the company when she finished college. Having successfully completed her college programme, Grace decided to “travel for a year and get it out of my skin…and the company kept the job open for me.” She returned to Ireland in 1997 after a year in Australia only to realise after three weeks with the company that she “needed to go away again,” and “went to Holland of all places to pick tulips for three months.” This was despite the fact that “there wasn’t a lot of employment really in what I wanted to do but I think equally I had itchy feet to move on.”

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Following this period of travel, she recalls, “My Dad rang me…and I remember he said, ‘Grace you’ve had your fun. You need to come back and start your career’ and he said, ‘Those people have rang looking for you again.’ So I came back to Dublin.” Having met with both individuals who had sought her out, one of whom had left Green Isle and moved to Kylemore Foods, a family-run confectionary company incorporating a bakery and chain of restaurants (Newenham 2013), Grace had a choice to make between the two companies when each offered her a job. While Green Isle was offering a higher remuneration package, Grace’s decision came down to the best fit based on her professional ambitions. Having assessed each organisation, she surmised that: Green Isle for where it was; was already positioned—all the procedures and manuals were done. You go in and do your job, that’s your box. I didn’t feel I’d ever have a chance to step outside of that. Where Kylemore on the other hand was quite an established company, but I would have a finger in a lot of pies [from] which I would gain an awful lot of experience. So, I took the job with Kylemore.

8.1.2 Building a Management Career Grace started off in quality and science and analysing products, a role that involved long hours but one she enjoyed. During this time, her general manager “was a mentor to me and he would feedback to me ‘Grace, you need to do more of this, or less of that, in order to be the best manager you could be.’” She felt quite included in Kylemore, perceiving herself to be an insider from the start, “I always felt that my opinion was valued from the very get go.” She performed well and within a year, in 1999, was asked to step in as bakery manager, something she was “really chuffed with,” particularly considering her young age. The promotion left her “managing a predominantly male team” of over 200 people while still in her early 20s. Grace made the decision to go back to college on a part-time basis and complete a post graduate course in business management and consumer foods to complement her management role. Having completed her studies, she “managed the bakery in its entirety until they

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closed everything [in the bakery division] in 2001.” Brian Hogan, chief executive of KSG and grandson of the founder of the company has since reflected on the closure, noting that the bakery business was “not to be,” being usurped by the advent of frozen and par-baked breads (Newenham 2013, online). Brian noted that while it “was not easy telling them we were closing the bakery,” the timing of the closure meant that Ireland was in a growth period, and therefore “of the 300 people that we let go, every one of them had found a job as good or better by the time their four-­ week notice period was over” (Newenham 2013, online). Grace had “worked with a number of consultants during that shut down period, and one of them offered me a role…in an operations capacity” at Lir Chocolates. Grace stepped into the role of Operations Manager in mid-2001, another founder-led business established in Dublin in 1987 by 40-year old retiree Connie Doody2 and co-founder Mary White (lirchocolates.com 2018). Doody and White had both began to step back from overseeing the totality of the business by this stage, with White’s role greatly reduced when she was elected to the Seanad3 in 2002 (O’Donoghue 2017) and Doody stepping down as MD later the same year. When contemplating why she was chosen for the role of Operations Manager as an outsider to the company, Grace points out that Lir “hadn’t the skill set within the business” that they required for the role and therefore sought it elsewhere. When making the decision whether to join Lir, Grace noted that “I really liked the company. I worked for the company as a student and then I took the job as Operations Manager and stayed with them for four and a half years building everything from quality systems to operations and purchasing up along.” This moved Grace from a male-­dominated work environment to one “led by two female leaders, very different ­characters, very strong characters.” Although Grace as an outsider needed time “to understand where I fitted into that mix,” she thoroughly enjoyed her time there and believed the role gave her the confidence for what was  Doody was forced to retire from her executive officer post in the Irish civil service upon her marriage at age 23, due to Irish regulation at that time (1971). The civil servants’ marriage bar was lifted in 1973. 3  The Seanad is the upper House of Ireland’s Oireachtas (national Parliament), located in Dublin and composed of a mix of 49 members chosen by specific election criteria and 11 government appointed members. 2

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to come next. During Grace’s time with Lir, the company continued to grow, moving to a larger manufacturing facility in Navan, County Meath, and in 2007 it piqued the interest of Zetar Plc, a UK-based chocolate maker, who purchased it from Doody and White at the end of that year (O’Donoghue 2017). By the end of 2005, Grace reflected on her role at Lir and didn’t “ feel it was enough for a challenge, so I said I needed to extend myself again and push myself. That’s something I’ve always been comfortable with is pushing myself outside comfort zones, to excel. So, I left Lir Chocolates with no job to go to, and took some time out to understand myself, what I want to do and where did I want to go, and I loved the food and beverage industry, so I wanted to stay in that…I noticed the job in the paper about two months later, and I met with the then CEO founder of Java Republic and the Operations Director, the rest is history.”

8.1.3 P  aving a Path to Professional Business Leadership Having gone through a number of interviews and background checks, Grace started in January 2006 as Java Republic’s GM. Grace believed she was “lucky in all the roles of Java Republic where the individuals knew of my background, knew of my approach to work, and how disciplined I was and that stood to me in being appointed.” Java Republic is an independently owned coffee- and tea-distribution company, established in August 1998 by David McKernan (Javarepublic. com 2018). A veteran of the beverage trade, David has a passion for ethically sourced materials, high-quality roasting and superior blends, as reflected in the company tagline “coffee for the people, by the coffee people.” Although Java Republic entered a mature business market in 1998, it had successfully pursued a niche strategy throughout its existence, securing a strong client base with a brew-based system using bean-­ to-­cup technology and barista coffee machines which they also supply. Focused on the business-to-business (B2B) market, Java Republic has developed tailored coffee-brewing solutions for offices, hospitality services, hotel groups, cafes and corporate catering services, providing over

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100,000 cups of coffee/tea per day (Javarepublic.com 2018). Java also offer 46 blends of organic tea, introduced after several years in business, in order to expand the company’s product offering to their existing and potential client base. Of note is Java Republic’s simultaneous focus on both product and service excellence, developing its brand and staff at the same time, to offer a unique technical skill to the hot beverage market. It has developed the Dublin based Barista University, which offers a range of Speciality Coffee Associate of Europe (SCA) accreditations. As stated on the Java website, “Our Barista University is among the best equipped coffee training centres you’ll ever see. This is where we carry out all our on-site training. We also use this facility as our tasting room—where our Quality Team ensures that each and every blend of Java Republic coffee meets our exacting standards” (Javarepublic.com 2018). This niche strategy has proven lucrative for the company as Ireland has woken up to the benefits of premium coffee in the last 20 years. Starting at a veritable zero baseline in the 1960s, 75% of Irish consumers are now drinking coffee, many of whom fit the niche pursued by Java Republic. From when Grace joined the company in early 2006, she embraced the ethos of the founder, who quickly saw her potential as the company MD. This was a role that the founder didn’t particularly relish and was willing to relinquish to the right successor to allow him to focus solely on the company strategy. However, Grace took a pragmatic approach to the offer, recommending a phased introduction that would result in a smoother transition into each person’s proposed role: “The founder approached me to take over the role of MD for him. Knowing him now, it was very much a role he didn’t like in terms of managing people and the process and detail and that was my forte. So, I said ‘listen I’m only in the door’… I was just gone 30. ‘I still need to understand the dynamic of this business and the structure of the directors and what have you.’ I said, ‘I’ll prepare a paper for you on every department and the culture in the business to see where we can take it.’ So, I moved through the ranks of general manager to operations manager to Ops director and finally I took the role of managing director (MD) in February 2008,” while the founder moved on to the role of CEO.

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8.1.4 Leading from the Front As with most appointments, there is a settling-in period while colleagues attempt to gauge the leader’s capability and approach. This is particularly true when the appointment is from outside the current workforce, as colleagues have little prior experience of the individual and some may have anticipated the role for themselves. In Grace’s case, after 12 years in Java Republic, she received some feedback from Board colleagues that she had further unreleased potential: “Grace, you are like an iceberg, we only see [the tip] but we know there’s so much more capability underneath.” In the initial period after her appointment to MD, Grace’s capacity to “take time to sleep on something if I felt something was wrong” was helpful when dealing with significant challenges. In one case, early on in her appointment, she approached an individual who had not fully bought into her appointment. Rather than leave a problem fester, “I approached the individual and said listen we have a problem, and this can’t continue and I need your support and we got to a mutual place— and we pulled everything apart.” While Grace believes a leader should not “force anyone into a corner,” she “equally won’t sit back and be someone who will be the little woman, sat on a seat and do my job and what have you. That never fazed me. So, I tackled it head on and dealt with it and challenged the issue…If there’s an issue I will come up front and take it to hand.” The period following Grace’s appointment was “a huge learning for me and a huge accomplishment I believe, at a very young age in quite a male dominated industry in Ireland.” Reflecting on her management trajectory, she noted that “there were very few female leaders in my industry, to break in and start to build a career,” and that there were times where she had to address this and to have colleagues buy into her as leader as described above. When asked why she thought that was the case, Grace says that she believed there can be “a fear of breaking through that barrier, and I don’t mean that glass barrier from the female piece, I think women are very honest about how they approach work,” intimating that they may be more reticent than others to “put themselves out there” if they believe they “may not be able to do” the entirety of the role.

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Grace’s initial focus as MD was to put some structure on process as the company prepared for further growth without “taking away the happy place that we all work in,” requiring careful calibration between efficiency gains and worker satisfaction. During this period, the company “focused purely on sales, and profit and loss and really nothing in between,” leaving a gap in knowledge by “not understanding what that in between was or [what] was needed to drive to top and bottom line.” This required a leader who was process driven, capable of converting vision into action. Such a leadership approach proved complementary to that of the founder, reinforcing the benefits of introducing additional personnel at senior management level, even in a smaller business (Koryak et al. 2015; Murphy et al. 2018). While Grace notes that she “is logical in my thinking…with step 1 2 3,” she recognises that when things do not go according to plan, she “is not so good when it goes 2 3 1 you know.” Her particular forte is being able to see “that’s the priority, and that’s not a priority” and to communicate that to both the founder and her team. Acknowledging that while “you know and understand that there are goals and objectives and someone has to own it,” as MD Grace was equally conscious that this also meant that responsibility must rest with the whole team rather than a single individual. Notably, it took some time for Grace to be accepted fully into the business as anticipated by Boxer and Berry (2014) above, “It took the guts of two years…to trust me…and some team members took that amount of time to say ‘ok we have the right person in the role here.’” Despite these challenges, Grace remained focused on what was best for Java Republic, stating that “anything I did I believed it was for the company and the betterment of the company.”

8.1.5 D  ifferentiating Between Two Leader Roles: Insider and Outsider, CEO and MD While founders often step aside in growing businesses, it is less common to work alongside the founder and former MD in the same company when someone new takes over the role. Differentiating between the MD and CEO roles has been an interesting journey for Grace over the last 12

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years, as there can be “an awful lot of overlap you know.” This was particularly true in recent times, as Grace as MD and David as CEO “crisscrossed over marketing, operations, less so in HR, sales, commercial” in the last year (2017). This resurrected old concerns as to “who’s the decision maker?” It also created potential confusion among employees when asked to do something by both parties (Grace and David), as to whose request they should prioritise. As a result, David, Grace and the Board “redevised the roles within the business, so the buck stops with me. So, I’m fully responsible for all of the day to day business decision-making and accountability stops with me. He [David] is a brand ambassador, he’s a thought leader in the industry, external PR and senior client relationships and when it comes to everything day to day then that falls with me.” This arrangement has resulted in David stepping back from active participation on the internal management team and positioning himself entirely at Board level in the organisation. When contemplating her imminent step into the CEO role, Grace “believes on the business leadership piece you need to be one who is all encompassing in owning what you sell as a product, or service…I don’t believe you can look one way without encompassing the rest and that’s from a customer point of view, right to your staff. I think you own all of that as a leader.” Speaking of company culture, Grace notes that while “culture didn’t matter in my early stages of my career because I wasn’t high in the pecking order,” she sees it as vital in a leader role, “Now I find to look at the culture that we’ve built in the business in Java Republic we need the positive culture, albeit mercenary at times, to get things done.” Now that the company is in a growth phase, having implemented a major companywide rebranding strategy beginning in January 2018. Grace’s challenge is to find the balance when “trying to build a company with structure and process and drive performance, while actually keeping some of that family feel and not becoming too corporate, and that’s a huge challenge at the moment.” At this stage, Grace and the team are preparing for a new transition based on Java Republic’s growth strategy, and she points to the benefit of her participation in an MBA programme at Dublin City University in this process, “I think this MBA programme has done that for me, being very honest…I would not have been ready, because all of my projects on

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the modules to date, every one of them, I’ve surrounded Java Republic with… a strategic piece in operations… the cultural piece of our actual organisation… our strategy of where we sat relative to competitors in the market landscape. I wouldn’t have had the tools to be able to do that, had I not gone on this journey.” Considering the near future, Grace believes that she will retain the same leadership style she exhibited in the MD role as she steps up into that of CEO: I’m key to myself, I don’t think I’ll change my personality. I don’t think you can. I think some of the things that I’ll take from here is actually the standing back somewhat more, you know being removed somewhat more from the day to day and being very much more strategic. Spending more time with our people, but more quality time, not just the odd 5 minutes fleeting on the floor, but actually productive quality time. They need to understand our strategy from top to bottom and it’s not presented in an hour in a boardroom. They actually have to believe it and understand it and where they play a part, and I believe that’s my job to really ensure they own that. And that’s taking away some of the day to day [work] that I do, and actually building the management team around me. I coach them. They will have their functional skill set but I believe as we grow I have as much responsibility to maintain the culture that we’ve developed and that our founder has developed from the get go and that passion in the business for the product and what we do and how we work with each other. I aim to take that further, and there is a balance needing to be made as we have new people joining that we maintain that, and I think that falls with me because they will have enough to do functionally on the ground to manage departments and day to day [operations]. That’s something I’ll have to be very strong on.

The future is bright for Irish coffee with off-trade value sales of €176 million predicted for 2020 (Kennedy 2016). In particular, premium brewed coffee consumption has increased exponentially in recent years with a 7% growth recorded in the Irish Market in 2016 (Murphy 2017), and Java Republic in a perfect position to leverage this uplift. Building from ­inception to a client base of over 1200 clients in the B2B arena, Java Republic made the decision to branch out into cafes in 2016, opening

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two cafes in Dublin that year to leverage this growing demand for brewed premium coffee. Grace believes they are on the cusp of a new era…

8.1.6 Looking in from Outside in Retrospect Reflecting on her 12 years in Java Republic, Grace considered the pivot points that brought her mentally and physically from the company periphery on day one to one where she resides in the heart of the organisation today. Having accepted the MD role in 2008, Grace acknowledges that she grappled with her “position”—in what was essentially a founder-led business—with the founder still in situ. This was a “very family orientated” business, one that required her to consider her position, which she remembers as being a mixed bag of emotions: I think the difficulty in feeling as an outsider was—‘ok where is my position? I’m the MD of a business, of a small business that also has a founder CEO, so who’s the go to person? Who’s the decision maker? What’s my purpose? And what’s their purpose?’ And that point of view, was probably not so much from an outsider’s point of view, but actually around fit. I was very cognisant from an early stage in Java Republic that it’s very unusual to have an MD and a founder/CEO in a small operation. But as I grew into that role I realised quite quickly we have two very different person skill sets, and to be fair to our founder he recognised where he was lacking; he needed somebody to come in. But that took me a couple of years to understand that and it equally took me a couple of years to understand well, how I manage the best…for the company going forward?

As noted above, this challenge was revisited recently, and leader roles within the company became more defined as a result, with Grace taking entire responsibility in the day-to-day running of the company, requiring her to step into the role of CEO as well as MD, re-merging the two roles for the first time in over a decade. Grace believes that this move gives scope for “the team to understand that they have one person to go to, one person who’s accountable.” While Grace does not have a coach in Java Republic, her mentor is their Board chairman “who doesn’t work in the business and I meet with him monthly. He comes from a great strategic

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background and a cultural background and is challenging. Challenging in a way where I don’t ever feel like I’ve done wrong, but makes you think could you have done things differently?”. From a leader perspective, Grace sees herself as “very positive, from a female point of view,” and seeks to “lead with respect…regardless of anything else.” This includes asking colleagues “how they are? And it’s not just about a job, and how are the family? I feel that when I do that, I get it in return.” She is “one who will never ask of somebody, or something to do that which I won’t do myself ” and believes that “whether you are male or female you should be sitting at a leadership table because you deserve to be there [based on] your skill set and not because you tick a quota.” She notes that authenticity shines through in successful business leaders, as they “have an emotional attachment to what you do and that comes across and how proud you are about the people and about the company.” Told by others that she is “a very good listener,” Grace highlights its value in practice, “I’ve had feedback to say I would sit in the meeting and I would listen. I won’t come to a conclusion straight after that. If there is an issue, I will listen to all sides and I will make an informed decision. I’ve always been like that, and maybe that’s come from my dad who would have been the very same: not to jump to conclusions.” While “very thorough” when making decisions to ensure she has covered all the angles that need to be covered and has assessed if there are consequences, Grace balances this approach with an awareness that it can “take too much time.” This does not mean that Grace is fearful of making tough decisions, which she has had to do throughout her career. She is also willing to challenge those who do not fulfil expectations, and is open to standing up to people when the need arises. Grace notes that appropriate employee performance appraisal systems can aid in this process as, “having their performance appraisals and giving feedback…is a real core that…removes the personality, and you’re actually now beginning to talk about behaviours that you expect to see, both the personal behaviours, and the functional.” Acknowledging that she joined a small company and that “in any small company as you grow, you’re taking on a multitude of hats and have a multitude of decisions to make,” Grace believes a key difference

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between when she joined Java Republic and where it is today is that she has “built a team around me, and in the past that team wasn’t there.” Looking back, “5–6 years ago we had no management team. It was the finance director and myself. Now we are building that corporate structure and that gives me space.” These structural changes have offered her the opportunity to stand back from the day-to-day operations and think more strategically about the company’s future. The benefits of this evolution are not lost on Grace, who notes that “outside of the MBA, I’ve never felt I’ve had as much headspace to think and do things and build strategy because that’s my responsibility… actually driving and building that strategy and what do we want to do and what do we not want to do. So, I actually feel now more than ever that I am balanced with the team around me who can take ownership for their areas and their functions, and feed in and meet and collaborate and do what we need to do, and allow me that headspace then to think at a bigger level.” Asked if she would go internally or externally in a search for a senior leader, Grace believes she “would look at both, and the reason I would say that, I have come across individuals both male and female over the last number of years who have great capability but may never have been approached to go on a programme or [asked] ‘would you like to have this role?’ I think sometimes we can be too quick to look to greener fields outside of a company” for future leaders. Grace shows her own capacity to mentor talent from within Java Republic, describing how she encouraged an employee to come onto a program to step up and be a manager within the business. She believes that “You can spot something in someone that may never be tapped into, and she was someone who would never have come to the table to ask for that, and I think that a responsibility of me as a leader and as an MD of the business [is] to watch out for that, and therefore pick out talent. Some may never want it, and that’s quite ok, sometimes I’m envious that they don’t want that because they’re happy out in what you’re doing but I think we’ve a responsibility to pick those individuals that have something that we see, we can tap into and expand and develop for them.”

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8.1.7 Conclusion and Reflection Reflecting on her drive towards leader roles from early in her career, Grace noted that she “always wanted to be the best at whatever I put my hand to and even going back to school I was like that. I was a high achiever. I studied well. I studied hard…I never wanted to be second best I always wanted to get to top grades in whatever I put my hand to. If I had a project, I would excel at that project.” At each juncture in her career to date, Grace knew “it was never going to be easy,” but “I was a firm believer that if I worked hard, I’d get reward.” While Grace had doubts early on, she believed confidence came with age and with delivery of success, reflecting the perpetual balance of effort and reward and the impact of experience when seeking out new challenges built on a “belief in myself.” Discussing the value of mentors throughout her career, Grace believes “having a mentor all throughout that journey has been crucial to bounce loads of things off.” She recalled that, from an early age, she had a mentor in her work, each of whom had “given me I think, confidence to say that I have the ability to do it. There is still that fear in the background that you could fail but I think it’s the want to succeed that drives me in everything I do.” She recognises that mentoring is a two-way street and that you have to be willing to ask for help for the relationship to work, something she was not always open to: “I did go through a phase in my early career where if I couldn’t do something I would still try and do it myself without asking for help.” Having been given feedback a number of years back on this trait, she is more open to seeking out and giving advice, noting that one has “to have those frank conversations around the table, you have to be very trusting and very honest to those around you to do that and I think that’s been something that has stood to me to have those and not be afraid of having that feedback.” When considering how one can encourage employee development within an organisation when in the leader role, Grace highlights the importance of being very open in a working environment and to be able to “sit around the table with colleagues who can voice to you without any cloud or cover.” This requires an openness to both giving and receiving feedback and to not taking it personally—something “that’s come with

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experience throughout the years with dealing with situations from a work environment more than personal, that when you’re challenged with difficult employees, or directors, or situations. When I think back to some— they were daunting. But I think if you go through those you do get stronger and you say—‘I came through that and I dealt with it and I got the right result.’” Although only at the mid-point of her own career as a relatively young woman who is still in her early 40s, Grace acknowledges that she has been drawn to founder-led and family firms throughout her career to date. She believes there are certain challenges for these firms: as “corporate structures start to evolve, families struggle with that. Because its systems, and procedures, and KPI’s, and numbers, and you nearly have to depersonalise it.” However, there are also great strengths affiliate to the founder mentality as a form of outsider leader themselves, gaining traction within an often mature business market. Grace reflects on her experience in Lir Chocolates to highlight this point: If I go back to some of the leaders I’ve met and worked with. Mary White and Connie Doody of Lir chocolates, were two women who initially started a business from very, very little. OK, it’s been sold on throughout the years, but they went from a kitchen counter to a €27 million turnover business, they never gave up. I think that Mary herself was very much involved in the commercial side of the business. She never took no for an answer, and it was as much her passion about the product and the business and her relationships that grew that business from the get-go and that is something I’ve always stood to. I would be very strong at building relationships. I do believe in any business—you buy from people, so from that perspective Mary always stood out as someone where ‘no’ just wasn’t in her vocabulary. It was going to happen. I would equally be someone you know when I see business, don’t tell me how it can’t be done but give me two or three reasons why it can be done or how it can be done. [Grace also discussed Mary Robinson, former President of Ireland and UN Ambassador]. So they are people that I really look up to from an Irish scale you know and always watch what they do and follow them.

Reflecting on her journey to date in both her professional and private lives, Grace considers her trajectory as one of balance, “That’s been my

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life to date from a personal point of view, I am married to Stephen and I have one little girl Emilia who is nearly 8 [who] brings me great balance to work and study and life you know, and to be fair I suppose you talk about family it’s always been asked of me ‘are you not going to have more kids?’, and I’m like ‘no.’ I like my work and I like to be challenged and I think honestly that I would find it difficult to balance all of that with a bigger family. So I feel like I’ve made my contribution and a good one and I’m happy to leave it at that.” As a parting thought, Grace notes that “even now I look and say ‘no I am not an insider’…I think if you are that insider, you can’t be objective…not just sitting on the fence you know, but you are on the periphery of being connected when you need to be, hearing everything that’s going on. Acting on only what you need to act on, but actually being very objective. If decisions need to be made, they’re made. If you’re on the inside, I think you get really clouded on what you need to do.” Summary of Some of the Key Learning Points from the Chapter • Leader role demarcation should be made clear to internal and external stakeholders when a founder remains in an active leader role in the company after an outsider leader is introduced. • It is important to articulate who the primary decision maker is, who’s accountable and who employees should prioritise when delegated to. • There is a value in honing sector-specific technical capabilities that can provide the outsider leader with required complementary skills that may not be available among founder leaders. • A balance of further education and mentor support builds confidence in one’s capacity to lead in a variety of different roles and contexts. • The mentor-mentee relationship is a two-way street; one has to be willing to ask for help. • Business capability development requires a simultaneous focus on product and service excellence and a balance in product, brand and staff’s technical skill development. • It is the outsider leader’s responsibility to respect the business culture that the founder has developed, while simultaneously ensuring flexibility is facilitated in pursuit of growth.

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• Leaders are champions who express their pride in their people and their company. • Growth-focused small firms need to build a corporate structure to give the leader space to focus on strategic intent. A core benefit of building a management team is establishing functional diversity in successful pursuit of growth aspirations. • There is a significant development benefit in delegating to the management team. Leaders can encourage and support their team to take ownership for their areas and functions, and feed into the business strategy. This approach also allows the leader the headspace required to think at a “bigger,” more strategic level. • Successful leaders are open to both giving and receiving feedback, even in instances where there is a valid argument for improvement. • Open honest communication builds trust, a vital component in building relationships between founder, non-founder and staff. This process can take significant time to embed in the culture of the organisation. • Leaders should push themselves and their team outside of their comfort zones, to exceed what is perceived to be possible. • Leaders should give people their time, particularly when implementing change in order to help them understand, participate and ultimately own the change. • Developing skills is a perpetual activity, with conscious regard for continuous professional development for both leaders and staff. • It is important to take time out to rejuvenate and reflect on one’s career trajectory, comparing it to both one’s professional and personal goals. • In business, leaders should say “don’t tell me how it can’t be done but give me two or three reasons why it can be done or how it can be done.”

References Boeker, W., and R. Wiltbank. 2005. New Venture Evolution and Managerial Capabilities. Organization Science 16 (2): 123–133.

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Boxer, R., and A.  Berry. 2014. SME Managing Director and Non-executive Director Trust Relations: The Dynamic Interplay Between Structure and Agency. International Small Business Journal 34 (3): 369–386. Daily, C., P.  McDougall, J.  Covin, and D.  Dalton. 2002. Governance and Strategic Leadership in Entrepreneurial Firms. Journal of Management 28 (3): 387–412. Dunne, T., J. Aaron, W. McDowell, D. Urban, and P. Geho. 2016. The Impact of Leadership on Small Firm Innovativeness. Journal of Business Research 69 (11): 4876–4881. Flanigan, R., J. Bishop, B. Brachle, and B. Winn. 2017. Leadership and Small Firm Performance: The Moderating Effects of Demographic Characteristics. Creighton Journal of Interdisciplinary Leadership 3 (1): 2–19. Greenislefoods.ie. 2018. Great Tasting Frozen Foods. http://www.greenislefoods.ie/. Accessed Apr 2018. Javarepublic.com. 2018. It Was Nearly 20 Years Ago Today…, Dublin, Ireland. Published January 17. https://www.javarepublic.com/nearly-20-years-agotoday-2/. Accessed Apr 2018. Jayaraman, N., A.  Khorana, E.  Nelling, and J.  Covin. 2000. CEO Founder Status and Firm Financial Performance. Strategic Management 21: 1215–1224. Kelliher, F. 2007. Small Firm Cooperative Constructs: Addressing Industry Power Relationships. Journal of Small Business & Enterprise Development 14 (3): 501–513. Kelliher, F., and L.  Reinl. 2009. A Resource Based View of Micro-Firm Management Practice. Journal of Small Business and Enterprise Development 16 (3): 521–532. Kennedy, I. 2016. Irish Coffee Culture Continues to Grow. An Bord Bia, Ireland. July 1. https://www.bordbia.ie/industry/manufacturers/insight/ alerts/pages/irishcoffeeculturecontinuestogrow.aspx. Accessed Apr 2018. Khedhaouria, A., C. Gurau, and O. Torres. 2015. Creativity, Self-efficacy, and Small-Firm Performance: The Mediating Role of Entrepreneurial Orientation. Small Business Economics. 44 (3): 485–504. Koryak, O., K. Mole, A. Lockett, J. Hayton, D. Ucbasaran, and G. Hodgkinson. 2015. Entrepreneurial Leadership, Capabilities and Firm Growth. International Small Business Journal: Researching Entrepreneurship 33 (1): 89–105. Lirchocolates.com. 2018. From Humble Beginnings, Dublin, Ireland. http:// www.lirchocolates.com/our-story.php. Accessed Apr 2018.

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Miller, D., and J.-M. Toulouse. 1986. Chief Executive Personality and Corporate Strategy and Structure in Small Firms. Management Science 32 (11): 1380–1409. Murphy, M. 2017. 7% Growth Forecast for Irish Coffee Market. Food for Thought, February 20. https://www.fft.ie/7-growth-forecast-for-irish-coffeemarket/15042. Accessed Apr 2018. Murphy, M., F. Kelliher, and D. Harrington. 2018. Exploring the Perceived Impact of Strategic Learning Plans on Growth-Focused Small Service Firms. In Contemporary Issues in Entrepreneurship Research Creating Entrepreneurial Space: Talking Through Multi Voices, Reflections on Emerging Debates, Emerald Book Series, ed. D. Higgins, P. Jones, and P. McGrown, 157–175. UK: Emerald Publishing Limited. Newenham, P. 2013. The Rise of Kylemore from Bakery to Catering and Beyond. Irish Times, August 16. https://www.irishtimes.com/business/retail-and-services/the-rise-of-kylemore-from-bakery-to-catering-and-beyond-1.1495393. Accessed Apr 2018. O’Donoghue, 2017. I Got Married at 23 and Had to Retire. At 40, I Started a Chocolate Firm in My Kitchen. My Business Works Series, The journal.ie, November 8. http://www.thejournal.ie/connie-doody-lir-chocolates2-3688210-Nov2017/. Accessed Apr 2018. Simsek, Z., J.  Jansen, A.  Minichilli, and A.  Escriba-Esteve. 2015. Strategic Leadership and Leaders in Entrepreneurial Contexts: A Nexus for Innovation and Impact Missed? Journal of Management Studies 52 (4): 463–478. Willard, G., D.  Krueger, and H.  Feeser. 1992. In Order to Grow must the Founder Go: A Comparison of Performance Between Founder and Non-­ founder Managed High-Growth Manufacturing Firms. Journal of Business Venturing 7: 181–194.

9 Outsider by Birth: Leading in a Family Firm

Leadership in family firms is often differentiated from other businesses based on their approach to strategy, the interplay between family and business characteristics, kinship, the applied management approach including the use of internally or externally developed knowledge, the principles of merit, performance measures and outcomes and the effects of minority shareholders and non-family managers. Family business leaders have historically been perceived as entrenched in the role over long periods and primarily trained on the job, although this perspective is being challenged in recent studies (Stewart and Hilt 2012). This view is in contrast to the traditional view of non-family business leaders, assumed to be formally educated with a market discipline that generates a relatively high turnover of these individuals within public firms (Oswald et al. 2009). Contrasts in management style suggest that delegation to professionals is more prevalent amongst non-family business leaders, who lean towards a more rational, analytical and formalised approach to command and control activities (Zellweger and Astrachan 2008). Although research indicates that non-family CEOs have a positive impact on ­family This chapter is written by Felicity Kelliher; Chris O’Riordan; Patrick C. Flood; Malcolm Higgs

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firm performance (Tabor et al. 2018), this is not to suggest that one form of leadership is better than the other. Family business leaders tend to have more intuitive skills affiliate to an organic sense of the firm’s history and trajectory built on mutual accommodation in pursuit of a sustainable future. While all these criteria are important aspects of family-firm management, the focus of this chapter is on the activities and impact of outsider leadership on a family business. When contemplating business leadership, it is important to remember that family firms are far more common in most economies than public firms (Speckbacher and Wentges 2012) and contribute significantly to the global economy. In many cases, these firms are owned and run by individuals who are directly related to the founder of the firm and familial traditions and values influence managerial practices, resource stocks, and the control and motivation of family and non-family business leaders (Chrisman et  al. 2007). From the perspective of insiders to the family group, there can be perceived and actual differences in the treatment of family members based on birth position, gender, generation or different branches of the family. These differences can create significant intra-­familial conflict, a reality notoriously common in this business setting (Stewart and Hilt 2012) that may amount to a threat to the firm survival, propelling a potential need for outsider leader engagement. By viewing family members as a finite resource (Tabor et al. 2018), the business can potentially reach beyond the familial fold in pursuit of an optimised leader team. Leading a family firm as a non-family member is a complex role. Emotional and cultural entanglements such as those described above make it impossible to professionalise a family firm simply by recruiting non-family managers. This is best articulated by Stewart and Hilt (2012, p.  17): “The family firm cannot operate just as if it were a non-family firm. Being a “professional” manager in the family firm requires the capacity to navigate through idiosyncratic family cultures.” From the viewpoint of entrenched CEOs, external management may be seen as a threat to their power base. They may also choose to retain traditional methods, particularly in functions related to privileged control over resources such as cash flows and executive positions (Stewart and Hilt 2012). For these and other reasons, family firms can find it difficult to attract, reward and retain professional managers (Barnett and Kellermanns 2006).

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Efforts to import HRM practices without consideration of the family context may also generate conflict as can a differentiation in the reward structure of non-family executives. Meritocracy mixed with preferential access for kin leads to ambiguities for all concerned (Stewart and Hilt 2012). Some family members may have little enthusiasm for independent board members and may view these influences as a threat to their perceived and actual benefits as family members. Family members may also wish to preserve their socioeconomic wealth rather than to maximise their financial wealth (Gómez-Mejía et al. 2007); this may include their capacity to provide employment for relatives or to maintain a long-­ standing company name that provides prestige to the family. In contrast, from the viewpoint of non-family employees or indeed young, female or other branches of the family, appointment of a professional manager may be seen as an opportunity rather than a threat. In larger family firms, board configuration is important as inappropriate decisions regarding the make-up of the board can increase the potential for opportunistic behaviour, negatively affecting the culture of the family firm, or increasing monitoring costs without corresponding benefits (Jaskiewicz and Klein 2007). Family members sometimes have difficulty separating professional relationships from those within their family (Kellermanns and Eddleston 2007), causing conflict about goals and strategies. Leader decisions are therefore more likely to be perceived as personal attacks by other family members. Thus, the complex and sometimes fragile relationships that exist in a top management team composed of family members influence policies that affect the firm’s management and ultimately its performance (Ensley et  al. 2007). Inclusion of non-family members in the CEO role may alleviate some of these challenges, as this individual does not face kinship criteria as an outsider leader by birth. Of note is that even prosperous family firms rarely survive beyond three generations (Chami 2001; Crosbie 2000), partly explained by the issues that arise in the shift from one generation to another that have a negative impact on the firm’s engagement in strategic planning. Even in the case of firms that survive intergenerational transitions, significant declines in performance have been observed putting non-family and minority at a disproportionately greater risk (Sehyun et al. 2014). These

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observations suggest that with business growth and the entry of the second or subsequent generations, uncertainty increases with respect to which family members, if any, should be involved in the firm. While strategic planning and succession planning are useful instruments in alleviating this risk (Eddleston et al. 2013), leading this engagement regardless of whether one is a family member or outsider leader is a complex process in practice. There may also be some benefit in appointing external managers onto top management teams to provide objectivity (Speckbacher and Wentges 2012), particularly in multi-generational family firms, as can be seen in the forthcoming case. Anthony Dinan joined the Cork Examiner1 newspaper, a wholly owned subsidiary of the five-generation family-run TCH, in 1980 as their financial controller. He worked his way up through TCH’s management ranks to become its MD in 1994, the first appointment outside the family in over 120 years, where he remained at the helm of the business until his retirement in 2010. At its height, TCH employed over 800 staff and had a turnover of in excess of EUR€350–400 million (Vaughan 2013). This case explores Anthony’s trajectory and reflections as an outsider leader in a large-scale family firm.

9.1 A  nthony Dinan: ‘Born’ to Lead a Family Firm 9.1.1 Background Anthony Dinan was born in Cork, Ireland in 1948. His father was “a very brainy man,” who would likely have become a doctor but as the eldest of four children he had to leave school and go to work at 14 years of age when his mother died of Tuberculosis. As a result, Anthony’s father followed his own father and grandfather into the print business and began as an apprentice at the Examiner newspaper in Cork. In later years,  The Cork Examiner newspaper title was later changed to the Examiner (1994) and then the Irish Examiner (2000) in a series of rebranding exercises at TCH. The publication will be referred to as the Examiner throughout this book. 1

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this “meant exciting times sometimes” when Anthony would sit across the desk “from my relations and my father negotiating” as a union representative in the company Anthony would later join as a member of the senior management team. Both of his parents encouraged Anthony to complete school, but when he was at the end of his final year of school in 1966, there was no choice but to “look for a job.” Driven by his father, Anthony was “made at home to write to, a long hand letter to, every company that I could think of that was in the telephone directory.” Reflecting on his father’s drive for him to do well, Anthony said, “That was good. You know, he was very good and very supportive and very pushy.” Having distributed his long-hand letters to various companies, Anthony “ended up getting two jobs in the one morning. Ford’s and an insurance company and I opted for Ford’s.”

9.1.2 P  aving a Path to Professional Business Leadership Anthony immediately began work with the Ford Motor Company in the Wages and Sales Summary Department after having finished school. Despite having secured gainful employment, he was keen to pursue further education, an ambition relatively outside of the norm at the time, “There was no free education at the time and I didn’t feel my parents were in a position to put me through college so I studied at night.” Anthony went to the local School of Commerce (now the College of Commerce) to see what they had available and selected the Institute of Chartered Secretaries’ four-year programme, or “the Corporation of Secretaries as it was then” (subsequently taken over by the Institute of Chartered Secretaries). This required a lot of dedication as Anthony would “finish work at 7 [pm] to cycle to the School of Commerce for classes that started at seven and went on until ten that night, three nights a week.” He successfully completed year one of the programme; however, the School of Commerce did not have enough candidates to offer the second year of the programme in Cork, so Anthony and two other classmates completed the programme via “correspondence [distance learning].” This approach was “quite cumbersome so it took longer than the three years…because

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by the time you got the information, by the time you got your books and you read them, you sent away the answers to the questions they posed and they wrote back to you and then you wrote back to them and this went on what felt like forever.” This recollection is testament to a World before the advent of ICT and the Internet, a landscape we will return to later in relation to the paper media sector. After two years with the Ford Motor Company, Anthony decided that if he was to finish Chartered Secretary exams, he would need to leave Ford due “to the regimentation of the organisation”: Ford’s expectation that employees would “do a lot of paid overtime” was detrimental to Anthony’s academic ambitions so he decided to seek out an employer “who’d be a bit more flexible.” From here, he “moved around a bit to get experience.” He worked in the building industry at Cork-based SISK Group, a construction and property company, for about four years, followed by “BrikBilt,” a house building company in Cork and then with Noel C. Duggan, MD of a well-known steel fabrication and structural engineering firm, who Anthony notes “was a man who led by action.” After that, Anthony “had accepted the offer” of an internal auditor post at UCC in 1977 when a friend congratulated him, stating, “now you can go in there, fall asleep and wake up when you retire.” This “worried the life” out of Anthony, as he’s “just not built like that” and he withdrew his acceptance, spending the next three years with Harrington’s Confectioners Limited instead, a family business established in Cork in 1966. Anthony is quick to point out that he “was very lucky to have very good bosses” in many of these firms, noting that “it takes people to encourage you all the way along the line.” He reflects on two specific instances when first starting out as an employee of SISKs in 1970, where his boss Sean Ryan offered him an opportunity to develop his skills as a future business leader: “he gave me the opportunity to go on a four-day course to London, and to be sent on a course to London at the time was unheard of.” The second was an act of recognition, wherein his boss Sean gave him a double bonus for going beyond the call of duty during the 1970 bank strike in Ireland, with the caveat “you probably thought we didn’t notice you doing this this year. We did.” This allowed Anthony to give something back to his own parents as it “coincided with my parent’s

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25th wedding anniversary and we had a dinner for themselves and the relations. So my sister and I were able to do that which was good.” When looking back on these instances, Anthony notes that they were “just examples of people encouraging you,” pointing to the reality that the better leaders in his own experience were generous in their approach to supporting and mentoring colleagues and younger members of staff. He reflected that a leader who can “give other people credit for things” is vital for human development in the workplace, noting that his supervisor in Ford, Donal Cramar, was of a similar ilk, “If you did something right. If you balanced something out or whatever, he would go to his supervisor to show them what you did. Whereas many people will take it and say, that is what I did or that’s what my department did. He gave you credit for it which was a huge thing at the time.” When asked about the highlights of his early career, Anthony spoke of pivot points in his initial steps towards business leadership, “I suppose being promoted in SISK’s always stuck in my mind as being good. Completing exams because I suppose at the time, 1966, coming out of school we all thought we were useless at everything or you could be made to feel that. Just completing those, you know they were achievements.” Anthony also credits those with leader roles within these organisations with building his confidence through quiet mentorship, “Noel C. Duggan was very encouraging as indeed was his wife Maureen. Michael Harrington would also still be a very good friend of mine and so, I think I was lucky.” Notably, the majority of these businesses are multi-generational family firms: Ford was established by Henry Ford in 1903, SISK Group by John Sisk in 1859, Harringtons Confectioners Ltd in 1966 and Noel C. Duggan’s in 1967, a fact not lost on Anthony as he reflected on his career trajectory: If I look at the history, in one form or another I was with family businesses for all my working life. Ford in one way was a family business and I think they, the family came back in and got involved again in recent years and SISK’s certainly was, and they all were in some way.

In his early career, the roles held by Anthony in these respective entities were building his professional experience rather than necessarily engaging

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the family in an alternative leader trajectory for their business. This was to change in Anthony’s move to what was then the Cork Examiner in 1980 as financial controller.

9.1.3 Leading a Culture Change from the Outside In The Examiner was a wholly owned subsidiary of the TCH Group, once one of Ireland’s leading newspaper groups with over 800 employees. Launched on August 30 1841 by John F. Maguire, the Examiner claims the title of Ireland’s oldest daily newspaper. The Crosbie family first became involved with the Examiner a year after it was formed, when Thomas Crosbie joined the paper at age 15 and progressed up the ranks to Editor over the intervening years. Crosbie became the paper’s custodian after the death of John F. Maguire in 1872, taking over as owner in 1873 having purchased the paper from Maguire’s widow the following year. Thomas Crosbie and generations of his descendants served as Editor of the Examiner in its standalone form and subsequently as a subsidiary of Examiner Publications (Cork) Ltd. His descendants also served as MD of the holding company, TCH. The TCH Management Board was made up of three branches of the Crosbie family and included members at varying levels of involvement in the business. Based in Cork, TCH published three regional and national titles at the time Anthony entered the firm. Having joined in 1980 as financial controller, Anthony noted that as an outsider he was relatively unusual on the management team, “I found that up to 1986 I was the only outsider who had come and stayed.” Anthony believed this was bad for the company, “I was 32 when I went in so I had worked elsewhere and at that stage…anybody there was there from school [age].” When contemplating the impact of solo firm experience and long tenure on TCH employees Anthony believed “They knew no different. They didn’t know any other behaviour.” Anthony was appointed to the Examiner board and to TCH’s board of management in 1985, and was the first non-family member to run the paper since its acquisition in 1873. It took some time for the family to acclimatise to this outside influence, particularly those board members

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who were not accustomed to working with Anthony within the firm on a day-to-day basis. Anthony became TCH company secretary two years later, in 1987, and subsequently added the role of HR Director in 1992, new ground for him as leader: “Doing the HR side for 6 years was a new area to me and was a very big challenge because at the time I was financial controller as well so sometimes they’re said to be opposites but they’re not really if you work them properly.” He was conscious that historically there was little incentive to develop as an employee, as “you rose to the top of your scale in 5 years” and “the differential between the top of their [pay] scales and being a manager wasn’t great.” Anthony sought ways to encourage HR development, in an attempt to “change the culture that existed in the business.” He organised a careers night for younger members of staff, and invited higher level institutes to attend, although “two out of about fifty” staff took up the opportunity for further education. The decision was made to encourage outside applicants who brought an alternative perspective with them, telling existing employees, “ye don’t know how lucky ye have it here. So they were spreading the gospel as regards the different cultures outside in their respective areas.” By 1988, Anthony had helped bring in “about 7 or 8 key people” and “they were all preaching the same thing, varying from the finance area to the HR area.” This shift in rhetoric influenced existing employees, who “started studying and you gave them incentives to study.” TCH was also instrumental in starting a family business centre within UCC around this time, and “you sent people on those courses.” Reflecting on these changes, Anthony believes …that the outsiders coming in bring a different culture. You’re not going to change the culture without people seeing things differently. We also sent a few people out on audits to other companies by arrangement with Deloitte’s who were auditors at the time. We asked them would they give them [employees] experience doing audits in other companies so they’d see what it was like. So, what I’m saying is how are you going to get people to see things differently? How are they going to get the experience? So, we sent them out for a couple of weeks doing basic ticking off work or ­whatever for the auditors but they saw how other companies worked and you know, they went down to the canteen and people told them how things were [and] they realised how good they had it.

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Anthony acknowledged that this shift in the employee team make-up resulted in some initial resistance from existing employees, but he believes that “these guys showed people how to do things, then that changed that attitude because they were there to help them. So that was the difference.” Once included in the organisational structure, Anthony made a concerted effort to “merge the whole lot together and form groups in different ways.” Speaking about specific initiatives, Anthony recalled that “one of the things we did, we did the business development programme with the IMI in groups and we took about 30 middle managers and put them on this programme from all departments, both newcomers and existing people and they had to do projects in groups.” By having colleagues work together with “an outsider and an insider in each of those groups so it was their project,” collegiality took hold at project level. Anthony was subsequently appointed MD of TCH in 1994, which he described as “a very interesting move for me because it brought me into a new area.” He remained in this position until his retirement from the role in 2010 at the age of 62. The remainder of the chapter discusses how Anthony navigated key decisions and leader-organisation member-family member relationships throughout his career as a professional manager in a family firm.

9.1.4 N  egotiating with Three ‘Families’: Owners, Employees and Relatives Under One Roof Having started in 1980, Anthony knew that for “the culture to be commercially focused,” it needed to address its cost base. He eventually got the company to agree, in 1984, that there was a need for reversal of previous employment agreements and for some redundancies. This was a difficult message to relay, one that was diluted by the then CEO: “I told the then chief executive that [he] needed 54 redundancies and he couldn’t bring himself to say 54 so he said 45 when he went to meet them.” Taking this example on board, Anthony acknowledges that fault does not always rest at the feet of the employees, “Sometimes it’s the company that creates the delays, because companies find it hard to make [decisions]…You’re not solving a problem fully and you still have part at least of that problem

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left over to deal with later. So then you’re going back a second time and the third time you lose credibility completely.” Acknowledging the need for tough employment decisions to help sustain the firm, Anthony recalls that when he was appointed HR Director in 1992 (a role in which he remained until 1998 while simultaneously performing the role of MD), he was responsible for negotiating with the trade unions within TCH. His view was that “the organisation had to be put right,” and he looked for “what did you need to do in order to do that.” One key management goal was to seek the reversal of a four-day week agreement negotiated in 1976, resulting in employees “being paid for five days but working four days.” Historically, the four-day agreement was in return for people accepting new printing technology, but the result was that “before technology (pre-1976) there was 408 people employed, when I started in 1980 there was 464 people employed because you had to print your papers on the fifth day.” While the “big bonus in 1991 was to get a return to a five-day working week,” Anthony noted the difference between this situation and the scenario when new technology was introduced in the mid-1990s: “…we said, before we introduce this technology, these are the conditions we want, before we invest the money…and in 1993 we had new rates for new comers. You couldn’t keep on employing people at the rates we had.” This process “took years” as it required the removal of “closed shop practices [that] were there before, so you’d come from a lot of history. Getting rid of quite restrictive practices was extremely important.” While the proposed changes had the potential to be unpalatable, “people at the end of the day were sensible and people wanted to hold onto their jobs,” so changes were made in pursuit of sustainable business development goals. Notably, despite being with the company for a number of years at this stage, Anthony’s transition to the new role of HR Director resurfaced an outsider objective view in how he approached and dealt with this challenge. As discussed earlier in the chapter, fate created a unique scenario where Anthony’s own father was a member of the trade union’s negotiating team at the Examiner. When speaking of his father, Anthony commented on his father’s mathematical ability, which meant that his father “would run rings around the [management] negotiating committee” at the Examiner. He became known as the “Chapel Accountant,” the Chapel

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being the term used for each section of the trade union in the printing business. Therefore, his father was a prominent union member while Anthony was the chief management representative at each side of the TCH negotiating table. The balance of working for one family as a member of the senior management team while working with one’s own family as core employees required a carefully negotiated professionalism in all work-based interactions to ensure that boundaries were clearly drawn. Mutual respect was at the core of this unspoken agreement: “…recognition is so important to people. Sometimes people think it’s all about money and very often it’s not. It’s about giving people recognition for what they do. Appreciation and showing them that you notice what they do. That you care about what they do and that they are important. Trying to give them a career path wherever possible and being honest with them. Essential.” As noted above, these were lessons that Anthony appears to have learned in his career before he became a leader. Having pointed to the research relating to family members sometimes having difficulty separating professional relationships from those within their family (Kellermanns and Eddleston 2007), Anthony discussed the reality of working with his father in a professional environment, acknowledging that any business leader needs to be “able to understand the other person’s point of view” to make progress. Anthony believed he had an advantage as a manager who came from a frontline family background: …because I knew the way my father thought, I knew what drove them. I remembered an incident when I was probably four or five. My father was sick and he had had TB before he got married, he was in the sanatorium for ten months and he was susceptible to chest infections and he was, he was sick and somebody, one of his colleagues from work came to visit him and when he was gone my mother said, are they paying you this week? and his answer was, always stuck in my mind, “he [the person who made the decision whether to pay his father while out on sick leave], has decided not to”. So that meant that your sick pay was based on whether they liked the look of your face or not or how they felt that that week was going. So when I was negotiating the pendulum had swung completely in the opposite direction and you got paid for sick pay as long as you were out. Now, that was wrong too. So it was a matter of, you know, coming back into the centre and finding common ground. But being fair.

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Notably affectionate in his recollections of his father, Anthony believed that the two men were able to negotiate a fair and equitable interplay, despite others’ perspective: “I think that it’s funny in a way that we often stood up from meetings and I could see guys saying that pup across the way there, the way he was talking to his father, and the two of us would be laughing.” Beneath this joviality is a mutual respect built over decades by acknowledging the value of empathy in negotiation, “by understanding why [people] act as they do and I could see that in, in my father as one of the people who would be involved and advising some of the people in the unions, he would have been thinking back to instances like I’ve recounted when he was sick and the company would’ve been thinking of how the whole thing was abused. Now, and it was.” This outlook suggests that it is feasible to separate the two relationships (that of family member and colleague) if both are willing to address professional lines of demarcation in context. As a key aspect of his role as newly appointed MD of TCH in 1994, Anthony spearheaded a low-cost union agreement secured in 1995. This agreement helped keep the group afloat during a few perilous years for the industry, while allowing margins sufficient to finance a major acquisitions strategy. This deal was not a foregone conclusion and required significant “one-to-one communication” with all stakeholders, supported by the production of the company’s “first 5-year plan.” This allowed management to “go along to the unions…to say, where you are going to be at the end and get agreement on that.” In the early 1990s, trade union opposition to pay and working-condition concessions came close to sparking the first strike in the Examiner’s 161-year history (Riegel 2002). Thus, face-to-face negotiations were tenuous, requiring resilience on both sides as “you’re facing someone, you’re getting the body language, they’re getting your body language, they understand what you’re saying. They know if you’re serious or you’re not.” However, Anthony is clear as to why resolution was possible in this case: In some [cases] I think there is very much a “them and us” attitude which doesn’t help and I’d no problems with the unions provided that they are constructive and that they work with you and accept what you’re saying

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but that’s a matter of building up trust which is important generally, and that if you tell them something that they’ll believe it and that you’ve got to, you know if they ask you, which they did one time, what’s your bottom line and you give them your bottom line you tell them, you’re asking me a very dangerous question, if you ask me for a bottom line I’m not moving from it and that’s what happened with a negotiation. In 1993 we went to the wire and the doors were closing and they then accepted that we were very serious and they signed off, they signed up to an agreement and that helped to pave the way for a joint agreement between the printers union [GPMU] and the journalists, the NUJ in 1995 which allowed us a lot of flexibility on technology and so on.

Having secured a palatable deal with the unions, Anthony went on to negotiate profit-sharing arrangements for staff instead of trying to match the Dublin newspapers with what the Cork paper dismissed as costly pay-structures. Throughout this process, Anthony lived by the ethos “we negotiate with the unions, we communicate with our staff,” an approach embedded in his belief that “it’s not in the union’s interest to communicate [management’s] message.” His view is that this management communication strategy must be on the employees’ terms to be effective: You communicate, you tell them what happened at the meetings and you go and you tell them at times that suits them. Now, that meant on occasions when there was something important happening, going in at two in the morning when a shift was ending or going in at six in the morning when a shift was starting or whatever, but you’re making the point that you’re serious about what you’re doing because you’d be troubled by doing this, not that you’re troubling someone to come in on their day off to listen to you or something, you know.

This mix of mutual respect, pragmatism and forethought built “a willingness on both sides which is built up from a trust that you’re serious, you’re looking after their future” which ultimately brought negotiations to a fruitful conclusion on both sides of the negotiating table.

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9.1.5 L eading in the 1990s to the 2000s: Growing the Group Through Acquisition Despite being the largest family-owned media group in Ireland supported by healthy newspaper revenues of circa IR£20 million per  annum by 1994, TCH’s publishing empire was at this point limited to the Cork Examiner, Evening Echo, and the Waterford News & Star, all regional papers in Ireland. The holding company also had interests in property, forestry and other investments, but an acquisition strategy launched in 1995, and enabled by the aforementioned union agreement, would cement TCH’s role as the largest media group based outside of Dublin by the end of the century. Anthony saw this strategy as a “job to be done” and he felt he “… would be able to do it [the role] and that I’d be able bring people around me who would be able to supply any absence of knowledge that I had, any lack of knowledge that I had about a particular asset and if they weren’t available you hired them and you contract them or whatever.” This highlights the outsider perspective, seeking the best minds available regardless of whether they were within or beyond the family or organisation boundaries. A fortuitous investment in the 1980s offered capacity to pursue this acquisition strategy. TCH were long-term shareholders of the PA, through which they held 1671 Reuter’s shares. Anthony recalled that “the shares were valued at £1671 [Irish] pounds at the time in the balance sheet and Reuter’s was floated…The original Thomas Crosbie was involved in that and we then had shares in Reuters because we’d shares in PA and we could have sold the whole lot for 1.87 million that would have brought us in first day and I had, one of my first battles was to say no, sell a portion of them and so on. We made 15 million sterling out of those shares. So that gave us a basis, a leverage in relation to the investments we did then in TCH.” Anthony favoured adopting a medium- to long-term view for development policies (Riegel 2002) when he took over as MD of TCH in 1994, an approach echoed in this phase of the business development under his leadership. Preparation for the acquisition trail was strategic, built upon Anthony’s research as an aspect of a Master’s programme he had com-

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pleted previously (1989–1991): “I had taken over as MD of the holding company at that stage so basically I had to produce a vision which I did in my thesis, developing a family business with a particular emphasis on its core business. I think one of the great benefits of doing the Masters was that it was an action learning programme…you were doing projects that people didn’t realise were projects but were really true to life and they were developing the business all the time. I saw that in order to develop it further as well you had to get bigger and you were either going to acquire or be acquired.” Negotiation with the unions was simultaneous to facilitate the business synergies affiliate to TCH’s acquisition strategy, and in 1995: We had the electronic page makeup agreement which allowed increased flexibility on input. It meant that sub-editors and linotype operators and readers all sat down next to each other, and they were doing the same job and you broke [it] down. We literally that time broke down a wall between two departments and they were all now working in the same room and that cut out the demarcation that existed so, progress was faster then after that but, it was very late because things were on with online and so on.

The group would acquire 15 new provincial titles from 1995 to 2005, supporting an overriding vision for growth: “The moves we made to strengthen the Examiner and the Evening Echo papers by acquiring regional papers I think were very important.” Each of these titles was typically a multi-generational family business itself, heralding the end of respective familial involvement following TCH acquisition in each case. The strategic intent behind these acquisitions was evident in Anthony’s media commentary at the time: “The addition of the Echo Group is a perfect fit for our business from a commercial and geographic perspective. It allows the Echo titles to maximise the potential of the synergies that arise from being part of a larger organisation” (Anthony Dinan TCH Group MD, quoted on RTE news report Jan 26 2007). By the late 1990s, regional newspapers were reaping record margins and the Examiner revenues were IR£37.8 million by 2000, with circulation reaching circa 60,000 copies per day. This fuelled continued acquisition activity not just from TCH but from its rivals in Ireland and the UK,

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and by 2005 TCH was worth an estimated €350m–€400m when Irish and UK media assets were “selling at spectacular sums” (Vaughan 2013, online). When asked if TCH was for sale in 2005, Anthony stated that it was not and that the intention was to “continue the acquisitive path” (as quoted by Vaughan 2013, online). In the largest of its print media investments, TCH acquired its 12th publication, the Sunday Business Post from Trinity Mirror in April 2002 for EUR€ 10  million, followed by the acquisition of the Irish Post from Jefferson Smurfit for EUR€2.5 million in 2003. This was TCH’s first acquisition in Britain, with a circulation of about 31,000 targeting Irish emigrants based in the UK. Stepping out of the print media realm for the first time, the group also acquired five radio stations during this period, including WLR and BEAT FM. Reflecting on TCH’s acquisition period of the late 1990s through to the 2000s, Anthony acknowledged that while the acquisition strategy was fundamentally a success, he learned that “diversification really doesn’t work unless you’re very lucky. We went into new things and that’s why I say that when you ask me. Not all of which was successful. I mean these are tied in again to leadership. The ideas that you can transfer your skills to any company are very foolish. They’re not right and that was a costly exercise that we learned and I would always have given the organisation credit for allowing us to make those mistakes. We said, we’ve made a lot of money in this, we’ll take a small percentage of it and try and invest in some companies and see if it works. It doesn’t. Because you get sucked into the management—and you shouldn’t be involved in that.” Anthony’s capacity to navigate this period of acquisition-based growth was partly enabled by the outward-looking Chair of TCH and Crosbie family member, Alan Crosbie. While acknowledging that the requirements for becoming an executive in a family firm are known “almost from the day you’re born” (Crosbie 2000, p. 7), Alan traded his position as Chief Executive at Examiner Publications to become non-executive Chairman of TCH in 2001 at the age of 46, and interestingly, published a book around this time about passing down a family business through the generations, titled “Don’t leave it to the children: Starting, building and sustaining a family business” (2000). Within the book he argued that family firms fail “for infinitely predictable—and preventable reasons” (p. 9) and that they can turn around and broaden a company’s business

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base by looking beyond the realms of the family itself. While congratulating his successor at Examiner Publications, Padraig Mallon, Crosbie stated that “it was time to bring in a new chief executive” (Riegel 2001, online). This was the first time the Examiner was without a member of the Crosbie family at its helm as CEO, although Mr Mallon left the role the following year.

9.1.6 T  he New Millennium: The Challenge of Leading Change In 2004, TCH announced it was closing down its printing operations after 153 years, and a new company Webprint Concepts Ltd was contracted to print TCH papers at a plant in Mahon, a suburb of Cork City. Under this deal, all of TCH’s 14 titles, with the exception of the Irish Post, would be printed by Webprint Concepts Ltd. Discussing the deal at the time, Anthony noted that he was confident that this move would “benefit our growing readership across all titles and provide greater flexibility and options for our advertisers” (Irish Examiner 2005, online). This move also facilitated the sale of the TCH’s head office in Cork’s city centre, its home for nearly 165  years, to a real estate developer, offering a valuable cash injection to the company that would prove helpful during the subsequent financial crisis (2008–2009). Anthony reflected on these tactics as an aspect of the overriding company strategy, “The moves then that went about contracting out the printing. Selling off the Academy Street premises in the city centre and moving your offices out. I think they were, they were pieces of the jigsaw that fit together.” Of interest is the objective approach taken by Anthony in relation to these decisions, particularly as the Academy Street premises had been the company headquarters since it started operations in the 1840s. While a subsequent ­disagreement over TCH’s printing deal with Webprint Concepts Ltd resulted in a court case in 2008 (Healy 2008) and further disputes in 2013 (Healy 2013), these are beyond the realms of this chapter other than to say that the dispute added to the woes affiliate to the global economic downturn of the time.

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Like most media organisations, TCH suffered as a result of the global economic downturn in 2008, partly amplified by an overhang of exceptional cost items including those affiliated to the closing of the printing operations in 2004–2005 and associated redundancy costs. Having entered 2006 debt free, largely due to the sale of the company head office in Cork’s city centre, TCH had total bank debt of €27.7 million by the start of 2011 (Vaughan 2013). By 2013, the writing was on the wall for TCH, which ceased existence as a commercial entity on March 6 2013 through entering the process of receivership. Within hours of receiver Kieran Wallace of KPMG being appointed to TCH, the bulk of its assets, including newspaper titles, were sold to LMI, which is 100% owned by Tom Crosbie and his father Ted—one branch of the Crosbie family—for an undisclosed sum (Vaughan 2013). Alan Crosbie was not part of LMI, and thus while LMI kept the Irish Examiner and the Evening Echo newspapers in the ownership of the Crosbie family after 140 years in the business, the titles were owned by a smaller family grouping. LMI ran this business in the interim four years before being bought out by the Irish Times newspaper in December 2017 (Sexton 2017), bringing the five-­generation Crosbie family involvement in the Examiner to an end. While recriminations came in many guises following the receivership and subsequent break up of TCH, it is worth noting that Anthony was credited with navigating TCH’s acquisition strategy and was awarded Cork Business Man of the Year in 2006, with TCH named ESAT Cork Chamber of Commerce Company of the Year in 2001 in recognition of their individual achievements and the “exceptional contribution to Irish life, Cork life and the Cork community” (Judging panel chair, Sam Beamish 2006, as quoted by Keane 2006, online). Anthony was also credited with transforming “de paper” (a colloquial term for the Examiner) “from a genteel, family business into a cash-efficient publishing house determined to establish itself as a third force in the Irish newspaper ­sector” (Riegel 2002, online). Anthony’s own reflections on this trajectory return to the challenges of leading as an outsider in a family firm: I would hold that they were actually, if [the acquisitions] were worked properly and if there was proper investment in them and if you didn’t have the emotion that goes with a family business in the existing oldest products that you would’ve done far better with them and I think you still can I think, they [regional media titles] have a longer shelf life.

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9.1.7 Beyond the Family Fold Having been given a shareholding in TCH’s new acquisitions, the Crosbie family bought out Anthony’s interests in 2004–2005, giving the company 100% ownership of all subsidiaries bar TCH Recruit Ireland. In May 2010, Anthony “rocked staff” when he suddenly retired at the age of 62 and was replaced by Irish Examiner CEO Tom Murphy (Vaughan 2013, online). At the time, Alan Crosbie, Chairman of the TCH board, said, “Anthony served our company for 30 years with commitment and distinction. His impact on the company and on the media industry in Ireland was immense” (Hancock 2010, online). Anthony does not appear to have slowed down in the interim years. He has “been involved with a couple of charities and advising a number of small and family businesses, still am.” He was Chair of the Cope Foundation for three years and was on the board for ten years. He also chairs an Addiction Centre in the South West of Ireland, having worked with them since 1999. Speaking about his continued contributions to his community, Anthony believes, “That could be ego driven, that you want to prove that you can continue to do things and that you can, but I think it’s nice to keep the brain going.”

9.1.8 Conclusions and Reflections When discussing his career trajectory, Anthony is reflective on how he ended up leading a family business, noting that it was primarily “circumstance, I think I just fell into it.” He believes that leading as an outsider in the family business fora, “gives you quite a wide perspective,” and that leadership in this context is about “doing things, pushing out the boat an extra bit” and “that you were given scope to do things.” He notes that leadership is all about “communication,” beyond where you think you’ve said enough, “when you communicated all you can and you talked and talked and talked about something and you can’t stand to talk about it anymore, you’re probably about half way there.” Contemplating the difference, if any, between family firms and other media entities, Anthony could see positives and negatives relating to this business structure. In his experience, a long-term strategic trajectory was

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made possible as a private family firm does not have “Plc requirements,” such as “looking at share price, reporting quarterly or whatever…to pacify investors, strategists or analysts.” Anthony also acknowledged having “access to the owners” and avoided having “the strategy thrown completely out the window.” In this sense, while an outsider to the family, he was more closely connected to the owners than would his equivalent in a listed or widely held entity. On the flip side, family board members do not always “differentiate between family needs and business needs,” to the detriment of the long-term viability of the firm. While “Sibling rivalry. Succession … mixing up family issues with business issues, emotions with commercial reality” are recurring challenges in these business settings, “you can have a mechanism like family council or whatever to deal with family issues and to leave the business to be run by the best people to run it who may be family and may not be family.” Anthony believes that as an outsider leader in a family firm, it is important to “recognise that you are not family and that at the end of the day somebody else has the final call on everything that you do.” He notes that the benefit of an outsider eye “is that you can see things clearer I believe because you are not emotionally involved. You can see things clearer because you’ve come in from outside and because maybe you have a different outlook, you have a different culture.” As for his overriding reflections on being a business leader, Anthony believes there are “many different types of leaders, and it very much depends on where you are in the life of a business, how [far] you are along the line and what the main problems are at a particular time.” Those who “know their limitations and act accordingly and take the advice from other people” are more equipped to succeed over the longer term in a leader role, as that “autocratic or, you know, type of leader, I know best doesn’t work out.” Acknowledging that “there are times when you have to say, look, I heard what you say, I’m making this decision now having taken their advice” is a reality of the role as “that’s what you’re there to do at the end of the day.” In this case, the leader has to “listen, sum up, and give everybody a chance to have a say in what’s happening and to have their say and then you make up your mind.” He leaves us with an underlying ethos of the leader role:

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You must be prepared to lead, literally to lead not just to direct. You’ve got to show that you’re prepared to do something yourself, as well as expecting other people to do it. There are times when a leader needs to go out and do things with everybody else to show people that they’re behind the project. You’ve got to give people the resources they need in order to do things. That’s the physical resources and the human resources as well as everything else, and that people are seen to have the power to do something. If somebody were to be seen not to be powerful enough or not to have sway with you and you’ve given them a job to do, well you’ve got the wrong person doing it [and] it won’t succeed. A leader has got to have this vision of where you want to get to. You’ve got to be able to communicate, to communicate with everybody. I think accessibility is very important, very, very important for a leader. I don’t think that you should at the same time over stretch yourself in the sense that you try to be involved in everything. You know. Knowing when to delegate and knowing when not to delegate is really important also. You’ve got to show you believe in what you’re doing and when things are bad, don’t panic and still go around with a smile on my face, talking to people. Otherwise you shut people out.

Summary of Some of the Key Learning Points from the Chapter • Outsider leaders in family firms need to be aware of the family dynamics as well as those associated with the commercial entity. • Families are not a homogenous group, and thus outsider leaders may be accepted by certain members of the family and kept at arm’s length by others, particularly if it is one of the first times that a non-family member holds a leader role in the organisation. • An influential outsider-leader advocate within the family, as was the case with the company Chair who was also a family member in this instance, is an important voice when proposing change in the family firm setting in order to generate necessary buy-in to the outsider leader’s vision for the firm. • Negotiating with power cohorts such as the family-led board of management or union representatives requires mutual trust and respect and regular in-depth and face-to-face communication with various

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internal stakeholders at times and locations that show management’s commitment to inclusive strategic intent. The outsider leader’s diversity of experiences, skills and contacts acquired in different roles can equip them well to turn their hand to alternative contexts, as they use what they know already works and can draw help and advice from who they know previously. Mentors both within and outside the organisations in which the leader is currently and previously employed are important catalysts for leader development at various career stages. Outsiders employed at all levels of an organisation can bring new and fresh perspectives that challenge existing cultures within the family firm, and can encourage existing employees to appreciate their position relative to other organisations. A balanced hiring strategy is important when choosing between insiders and outsiders, as each has their advantages. It is critical to retain valuable personnel with potential and internal know-how and to promote them. However, it is also important to seek an injection of those with new knowledge that is lacking in the current organisation, who can quickly learn from and drive forward those already in situ. Outsider leaders often recruit others with complementary skills to their own when engaging with existing organisations who have unrealised potential. By bringing key personnel into specific functions (e.g. marketing, sales, HR), internal culture may be adjusted to facilitate the release of this potential.

References Barnett, T., and F.W. Kellermanns. 2006. Are We Family and Are We Treated as Family? Nonfamily Employees’ Perceptions of Justice in the Family Firm. Entrepreneurship Theory and Practice 30 (6): 837–854. Chami, R. 2001. What Is Different About Family Business? International Monetary Fund Working Paper, WP/01/70. Chrisman, J.J., P. Sharma, and S. Taggar. 2007. Family Influences on Firms: An Introduction. Journal of Business Research 60: 1005–1011.

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Crosbie, A. 2000. Don’t Leave It to the Children: Starting, Building and Sustaining a Family Business. Ireland: Mario Publishing. Eddleston, K.A., F.W.  Kellermanns, S.W.  Floyd, V.L.  Crittenden, and W.F.  Crittenden. 2013. Planning for Growth: Life Stage Differences in Family Firms. Entrepreneurship Theory and Practice 37: 1177–1202. Ensley, M.D., A.W.  Pearson, and S.R.  Sardeshmukh. 2007. The Negative Consequences of Pay Dispersion in Family and Non-family Top Management Teams: An Exploratory Analysis of New Venture, High-growth Firms. Journal of Business Research 60: 1039–1047. Gómez-Mejía, L.R., K.  Takács Haynes, M.  Núñez-Nickel, K.  Jacobson, and J.  Moyano-Fuentes. 2007. Socioemotional Wealth and Business Risks in Family-Controlled Firms: Evidence from Spanish Olive Oil Mills. Administrative Science Quarterly 52 (1): 106–137. Hancock, C. 2010. Dinan Leaving “Examiner” Parent. Irish Times Newspaper, May 13. https://www.irishtimes.com/business/dinan-leaving-examiner-parent-1.664333. Accessed Jan 2018. Healy, T. 2008. “Examiner” in Court Battle Over Printing Deal. Independent Newspaper, December 10. https://www.independent.ie/business/irish/examiner-in-court-battle-over-printing-deal-26498353.html. Accessed Jan 2018. ———. 2013. Printing Firm Sues Over Loss of Contract with TCH Media Group. Independent Newspaper, March 20. https://www.independent.ie/ irish-news/courts/printing-firm-sues-over-loss-of-contract-with-tch-mediagroup-29144064.html. Accessed Jan 2018. Irish Examiner. 2005. Webprint and TCH Sign Printing Deal. Irish Examiner, July 5. https://www.irishexaminer.com/breakingnews/business/webprintand-tch-sign-printing-deal-210209.html?c=business&jp=210209&h=webpr int-and-tch-sign-printing-deal&t=html. Accessed Jan 2018. Jaskiewicz, P., and S.  Klein. 2007. The Impact of Goal Alignment on Board Composition and Board Size in Family Businesses. Journal of Business Research 60: 1080–1089. Keane, C. 2006. TCH Chief Dinan Wins Business Award. Irish Examiner, November 25. https://www.irishexaminer.com/ireland/tch-chief-dinanwins-business-award-19196.html. Accessed Jan 2018. Kellermanns, F.W., and K.A. Eddleston. 2007. A Family Perspective on When Conflict Benefits Family Firm Performance. Journal of Business Research 60: 1048–1057. Oswald, S.L., L.A. Muse, and M.W. Rutherford. 2009. The Influence of Large Stake Family Control on Performance: Is It Agency or Entrenchment? Journal of Small Business Management 47 (1): 116–135.

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Riegel, R. 2001. Alan Crosbie Quits as Examiner Chief. Independent Newspaper, February 6. https://www.independent.ie/business/alan-crosbie-quits-asexaminer-chief-26095784.html. Accessed Jan 2018. ———. 2002. Newsmaker of the Week. Independent Newspaper, April 27. https://www.independent.ie/business/newsmaker-of-the-week-26052973. html. Accessed Jan 2018. Sehyun Yoo, S., M.T. Schenkel, and J. Kim. 2014. Examining the Impact of Inherited Succession Identity on Family Firm Performance. Journal of Small Business Management 52 (2): 246–265. Sexton, C. 2017. The Fall of the House of Crosbie. The Business Post, December 10. https://www.businesspost.ie/business/fall-house-crosbie-404859. Accessed Jan 2018. Speckbacher, G., and P. Wentges. 2012. The Impact of Family Control on the Use of Performance Measures in Strategic Target Setting and Incentive Compensation: A Research Note. Management Accounting Research 23: 34–46. Stewart, A., and M.A. Hilt. 2012. Why Can’t a Family Business Be More Like a Nonfamily Business? Modes of Professionalization in Family Firms. Family Business Review 25 (1): 58–86. Tabor, W., J.J. Chrisman, K. Madison, and J.M. Vardaman. 2018. Nonfamily Members in Family Firms: A Review and Future Research Agenda. Family Business Review 31 (1): 54–79. Vaughan, T., ed. 2013. Special Feature: Something Lost, But Something Gained. Irish Examiner, March 7. https://www.irishexaminer.com/ireland/specialfeature-something-lost-but-something-gained-224692.html. Accessed Jan 2018. Zellweger, T.M., and J.H. Astrachan. 2008. On the Emotional Value of Owning a Firm. Family Business Review 21 (4): 347–363.

10 Conclusion

In this final chapter, we synthesise a number of key themes that we identify in the cases presented to help us to better understand outsiders as leaders. Here, we look to contribute to the relative dearth of research that exists on the topic of outsider leadership (Giambatista et  al. 2005; Karaevli 2007; Kesner and Sebora 1994; Miller 1993; Villadsen 2012), and the outsider generally in the social sciences (King 2002; Williams et al. 2014). Each case has been written independently, and, while writing them, we did not set out to prescribe or seek out particular themes in advance. Although interview templates were used, in order to give some structure to the interviews and to ensure that relevant and appropriately worded questions were asked, we used these flexibly to allow the conversations to go in different and interesting directions where possible. Consequently, we believe that each case can stand on its own and there is valuable learning in each and every case. That said, there is also merit in interrogating them to establish broad commonalities.

This chapter is written by Chris O’Riordan; Felicity Kelliher; Patrick C. Flood; Malcolm Higgs

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10.1 What Is an Outsider Leader? While acknowledging that the literature has sought to define an outsider leader before now, we feel that this is incomplete, has lacked nuance and has been stated rather simply as someone from outside the organisation (Borokhovich et al. 1996; Chung et al. 1987; Dalton and Kesner 1983; Davidson et al. 2002; Jiang et al. 2013; Ocasio 1994). We would add further variations on this theme. Our interviewees have been outsiders and, in many cases, in more than one way (Adler 1997; Mayo et  al. 2006). We have Dennis Van Booma, who is an insider by virtue of spending most of his working life in a company that he part-owns but also an outsider in terms of his perspective and actions in market disruption. John Teeling has chosen to be an outsider throughout his career, not wishing to be in any organisation that would have him as a member, to paraphrase the Groucho Marx quote. This perspective has facilitated a vast array of business leadership roles across such diverse sectors as clothing, whiskey production and mineral exploration. Regina Moran, while a technological insider, is in the distinct minority as a woman in the male-­ dominated IT sector. Roland Koch and Fiacra Nagle have been sectoral outsiders, which is more challenging again for the transitioning leader as a “double” outsider by virtue of originating from outside of both the organisation and the sector (Karaevli 2016). In the case of Roland, he has transitioned between the public and private sectors, two diverse and culturally different domains. Grace O’ Shaughnessy is a longer-­term outsider within an organisation where the founder remained in situ after her appointment. Finally, Anthony Dinan was an outsider through birth, embedded in a series of family firms throughout his career. A number of demographic criteria contribute to the concept of outsiderness. We find that both Regina and Grace have been in leadership roles in industries which are more typically male-dominated and where they are one of few female leaders in their respective professions, even today. This is not unexpected as gender is a regularly cited source of ‘outsiderness’ (Cormier 2006; European Commission 2016; McDonald et  al. 2004; Williams 1992), and is reflected in the low presence of females in senior business leader roles generally, particularly in the STEM sector. This gender imbalance is acknowledged by both Regina and Grace as a

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societal challenge. However, they each feel that this can be countered by increased availability of early-career mentors for females to help generate willingness amongst this cohort to be put forward for promotion. We will examine gender and outsider leadership in more detail in a later section. Promotion at a young age was also highlighted as an outsider factor by many interviewees. John was thrust into his first business leader role following his father’s death when he was 14  years old, while Regina was promoted to Tech Support Manager in her mid-20s, a role for which she was “a rank outsider.” Grace took the role of Bakery Manager in Kylemore, leaving her to manage “a predominantly male team” of over 200 people while still in her early 20s. Believing that youth could be perceived to equate to a lack of experience, Grace sought further education to consolidate her knowledge while Regina used her experience as a leader in team sports to facilitate her early move into a management role. In Fiacra’s chapter, we see the ‘returning’ outsider in the form of the owner (and former leader) coming back to the organisation and the challenges that this can potentially present. In Grace’s case, while the founder never left the company, growth forced a recent recalibration of roles. This resulted in her outsiderness being diminished as she stepped into the heart of the company (as CEO) with sole responsibility for its internal operations. Both Fiacra and John are described as ‘serial’ outsiders by virtue of their comfort with moving between organisations and sectors on more than one occasion. Regina appeared to be a sectoral ‘lifer,’ and yet has recently moved into the mobile communications sector after more than 30 years in the IT sector. Our leaders show in many ways that they are adaptable, and this may well be a trait or quality of outsider leaders. This is something that they appear to have developed over their careers, but we also perhaps see aspects of this forming from events in their early years for some, where they applied experience from both work and nonwork settings to help track the transition to new leader roles. In attempting to understand why someone becomes an outsider, we can see evidence in many of the cases of people who wanted to do something different, in some cases quite radically. There is value in trying to understand why this happens. This is not just from the perspective of trying to appreciate what ‘makes’ an outsider but also for organisations who themselves want to avoid losing internal leaders (or those with

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potential) to the external market. By effectively identifying and addressing the factors that drive leaders to the outside early, they are less likely to lose some of their best talent. That said, the reasons for venturing outside may not necessarily be negative or adversely reflective of their current domain, but simply a reasoned personal decision and need to try something else. In this context, Roland wanted to finish up his political career and go back to where it began for him—in business—to pursue new opportunities. Fiacra sought a change away from banking, into a role that meant he had more involvement in running and leading the wider business. Regina’s recent move into mobile communications offers something new and an opportunity to be primarily based in Ireland after years of international travel. In each case, there was considerable risk in moving to the outside, away from domains that had become relatively comfortable, well known and understood into something less familiar. But the drive to do something different—for whatever reason—was stronger in each case than the forces compelling the individual to stay. This is not to suggest that the outsider leader is a risk seeker, but rather that they are not afraid of change at a personal level. Indeed, such comfort with change can be a valuable attribute for the outsider leader and may be a worthwhile area of self-development for those with ambitions in this direction. Arriving leaders demonstrate that they have transitioned from outsiders to insiders because this is the only realistic way to lead the organisations they occupy, as they become accepted by those in situ already (Thomas and Anderson 1998). In this sense, outsider leaders do not always remain outsiders (if we go by the more conventional view of what it means to be on the outside) and do not typically wish to be “social outsiders” (Becker 2012; Furnham 2015). This is understandable, given the difficulties that can be encountered by those who remain external to an important and valuable social group (Levett-Jones and Bourgeois 2015). Whether outsider leaders are “psychological outsiders” (King 2002; Quinn and Earnshaw 2013) is perhaps a little more difficult to determine. Although we appear to see broad personal acceptance in a number of the case chapters that leaders can be viewed as ‘outsiders’ by others, we contend that this is simply a realistic appraisal of the situation rather than an inherent ‘feeling’ by the individuals that they are funda-

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mentally different or that this is a problem. Instead, any sense of “psychological” outsiderness is either temporary (for example, as they transition) or to serve a purpose (as they emphasise different identities as needed (Ibarra et al. 2014)). On this front, outsider leaders may attempt to retain the outsider view and focus, and see the value in having this perspective as strategic leaders. This is an aspect that we will examine further later, when we briefly look at the “tactical outsider.” Overall, we believe that attempting to prescriptively define the term ‘outsider leader’ is of little real value. However, what we would say is that a leader can be an outsider by virtue of a multitude of well-established factors or contexts beyond just being from outside the organisation (e.g. background, education, career trajectory, sector, gender) as well as through a mind-set and an approach that is different or even unconventional at times (Kelsey 2015; Thorndike 2012). In essence, we can all be outsiders; what is of interest here are the degrees and nuances of this and how we use this status in organisations.

10.2 What Do Outsiders Bring? While we acknowledge that a lack of clarity exists in the literature as to whether outsiders or insiders deliver better outcomes for organisations (Karaevli 2007; Lauterbach et al. 1999; PricewaterhouseCoopers 2016; Rejchrt & Higgs 2014; Shen and Cannella Jr 2002; Zajac 1990), and that further research is warranted here, our purpose in this book is not to address that particular gap. However, neither can we ignore such an important debate. In this regard, we have sought to look at positive features associated with introducing an outsider or outsider perspective in the current section, while we will contemplate the challenges in a later section. That way, we aspire to lay out—from the evidence in the case chapters—a picture of outsider leadership that is reasonably balanced, which allows both leaders and organisations to make a realistic appraisal for themselves as to its suitability in their own contexts. We find considerable alignment with the literature on the benefits and added-value that outsiders can conceivably bring to their new (or even old or existing) organisations, which gives them something of an edge on

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the back of their outsiderness (Kelsey 2015). The leaders studied here bring new thinking and fresh perspectives (Ford et al. 2016; Kesner and Dalton 1994; Villadsen 2012), which can help to revitalise the business and the people, particularly if they have been through some challenging times. Anthony comprehended the worker perspective in TCH, based in part on his father’s experience, something that offered a level of empathy that may not have been available to others. Fiacra came in to Compass Group Ireland after a difficult period for the business and was able to reassess how they approached different aspects to find ways to improve this. An insider might conceivably lack this perspective resulting from being too ingrained in the status quo. An outsider joining does not have any loyalties to legacies in their new organisation because they did not create them. Outsiders are not biased or anchored to the organisation’s past and lack historic baggage, seeing things that others are perhaps blinded to internally and that externally they are well positioned to amend (Liang 2016; Nickisch 2016; Villadsen 2012). We see this in Dennis’ approach to challenging the way that larger competitors did business in the sector which involved getting closer to and connected with the customer on a consistent basis. John saw the opportunity in the whiskey distillation trade when those within the sector could not see its potential, due in part to their historic experience in the trade, which had since moved on due to changing customer tastes. Such an outsider edge (in a sectoral sense) allows the smaller, more nimble company to compete with the larger, possibly more bureaucratic entity, being better resourced by playing to its own strengths and nullifying any size weaknesses that it has. This can be seen with Grace and Java Republic, which has successfully created a niche hold in the mature coffee market. That said, it is important to remember that within the organisation the outsiders and insiders are ‘on the same team.’ Legacies, while open to being questioned and challenged where no longer relevant, have to be respected and the leader is best served by being selective in what is replaced and what is retained. The leader, wherever they came from or whatever perspective they adopt in context, functions as a ‘boundary spanner,’ connecting the inside with the outside. In this respect, we might argue that it is not an either/or but both, and we will take up that discussion latterly.

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Experience from other contexts is viewed as a real asset (King 2002; Lublin 2017). We see how Roland found that some of the challenges he encountered in politics were repeating themselves in business, while Fiacra’s banking skills helped him with raising funding for O’Brien’s when he joined. Equally, Regina’s international experience helped her comprehend the potential in diversity, seeking out a balanced workforce in pursuit of an optimised company culture. That said, as Roland acknowledges, it is also important for the outsider not to overstate their past experience in their new location, and there is a value in entering with a modest attitude and an acceptance that they do not know everything. As articulated by Grace, she needed time “to understand where I fitted into that mix” before making significant changes. Importantly, such an approach can help to make the outsider more relatable to their new colleagues. Although they may initially lack internal relationships, outsider leaders with previous industry experience will possess useful external networks (Villadsen 2012) that they can potentially call on for assistance and advice. John acknowledges the value of a wide variety of entrepreneurial and speculative networks in pursuit of new opportunities or when seeking to identify new employees when building a management team for his businesses. This can help to retain the outsider perspective even as leaders become insiders themselves, for as long as they continue to utilise this valuable resource. In addition, their external knowledge helps to compensate for the lack of internal, operational knowledge in the beginning (Karaevli and Zajac 2012); Grace, Fiacra and Roland each show how the skill sets and approaches or systems that they apply as leaders are portable and adaptable between different contexts. What the outsider leader doesn’t know ‘on the ground,’ in terms of internal, operational knowledge, can be acquired over time. However, if they are able to determine, using their existing skill sets and learned approaches from prior experience, what critical strategic knowledge is in the organisation, they are better placed to comprehend how to obtain and measure this potential. This experience offers the outsider leader the tools to convert strategy to practice wherever they are, such that they can bring value to their new destination. This also means that the innate understanding that an insider can have (which may or may not be an advantage) is rendered that bit less significant as decisions are based on more tangible evidence.

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There is a seeming inevitability associated with the outsider and change, and that is apparent in a number of our case chapters. Grace has recently pushed for change in terms of role demarcation in pursuit of greater clarity on who the real decision makers are in the company. Fiacra has brought change into his new organisations by introducing a management structure with different experiences, reforming how meetings are conducted and amending how operations are run. Anthony sought a more rounded approach to wage negotiation within his role as MD of TCH and spearheaded the company’s acquisition strategy in the latter part of his career. Roland also brought change to Bilfinger, which involved rebranding and continuing to refocus the business, and challenged processes internally that he did not regard as being in the best interests of the organisation collectively. In Dennis’ case, he looks to separate himself somewhat from the organisation when making strategic decisions, stepping back from the detail and distraction of implementation to create and innovate the vision. This is also true of John’s historic approach to the management of acquired companies. These changes are not just physical or structural but also in terms of perspectives, getting the insiders to understand that there is another, better way. As we will discuss later, that is not always easy to achieve, particularly when this is coming from an outsider (David and Turner 1996; Shen and Cannella Jr 2002). However, it is critical that the leader finds a way to make these changes both compelling and inclusive, ensuring that the insiders are involved. It may be necessary to put boundaries around this—as Dennis has with the innovation process and Grace in the case of role demarcation—but there is value in having engagement and buy-in, something that the outsider must work at in the initial stages of their transition and in developing positive and supportive relationships. We look at these two themes later in the chapter. An interesting question is whether outsider leaders are best suited to a crisis situation (Clutterbuck 1998) or challenging times. Our evidence does not allow us to definitively answer this per se, but we would lay out the fact that in our cases, we saw many outsider leaders but fewer difficult periods. Fiacra arrived in O’Brien’s at a time when the business was ­growing and continued on this track, as did Grace in relation to Java Republic. Roland’s entry to Bilfinger was at a transitional period for the business, but it was not in difficulty. The ebbs and flows of business tra-

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jectories are evident in Regina and John’s chapters, with the latter consciously seeking out organisations that were not realising their potential. There is certainly no crisis in the case of Procentec, but instead a company that is continuing on a successful track as it further innovates and expands, with Dennis’ outsider perspective supporting this. Thus, outsider leaders can appear to comfortably fit and function within organisations that are not in difficulty. We note that Fiacra’s roles in Compass Group Ireland and ODC were at more challenging times in those businesses’ existences, and his case does indicate that it may have been the right time for an outsider view, such as his, to bring them forward in a new direction. Would the same thing have happened with an insider anyway? We can’t answer that question, but Fiacra is no ‘fire fighter’ or temporary leader. His tenure in Compass Group Ireland was a healthy five years, during which time the company grew. His smooth departure was on the back of seeking out a new challenge and his replacement was an internal appointment. Anthony was with TCH for most of his career and guided the company through a successful growth strategy, which included some periods of tough trade union negotiations. As highlighted above, John sought out organisations that were not reaching their potential, essentially operating as a turnaround strategist in each acquired entity. Thus, from our cases, there is evidence that an outsider leader can be valuable in addressing a challenging period for an organisation, but equally that they can bring something important to a business that is not in any difficulty. In this respect, what we can say is that an outsider leader can bring a different ‘brand’ or type of change than an insider. The question for the organisation is whether that is what it wants (if the choice is theirs to solicit an outsider), as they contemplate the benefits that are associated with the outsider while also acknowledging the risks attached. In this context, one such key risk is whether the outsider and insiders will gel appropriately within an already challenging context, to avoid further compounding what may be a difficult situation. That is a theme that we will return to later, when we look at relationships.

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10.3 The Arrival of the Outsider We regard this as a pivotal time for the outsider leader and their organisation, and this was a prominent theme that surfaced in the interviews. Interestingly, we do not see evidence of the arriving outsider leaders functioning as “false insiders” (in attempting to pass off as insiders) during this early stage, over-emphasising their outsiderness nor “flip flopping” between both insider and outsider identities (Furnham 2015). These would appear to be risky or even arduous entry strategies if attempted. Furnham (2015) suggests that an alternative approach is to embrace being both an insider and outsider in a manner more akin to mediation. In this regard, the outsider leaders know who they are and where they have come from, but are respectful of where they are coming to and recognise that it will take time to gain acceptance. In the case of two of our leaders—Roland and Fiacra—the leap was quite significant, as they essentially changed sectors. Furthermore, John, as a perpetual outsider, faced a similar challenge with enthusiasm in each new acquired company across a range of industries. Unsurprisingly, this is even more challenging than when a leader moves within an organisation or comes in from another organisation. Not only did they have to learn about the new place, people and culture—as any organisational outsider would—but they also had to develop an understanding of the industry and sector that they were entering. Indeed, this is also partially true of Grace’s move to the hot beverage sector, transitioning from food production. This requires someone who is highly adaptable, as we have already stated, but it also requires that they contemplate how they will transition to lead a new organisation. Roland was moving from politics to construction, Fiacra from banking to franchising, and John from clothing to mineral exploration to whiskey distillation and everything in between, all considerable changes with potential risks and difficulties for those involved (Ciampa and Watkins 2005; Mayo et al. 2006). Two approaches seem to have been effectively employed here, which may be of value to others. Roland speaks of his entry into new organisations as engaging in a “deep dive,” by which he gets embedded into the way the business works through immersing himself fully in the opera-

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tions for a period of time. This involves working with staff in the engine room of the business to see how it functions at the level of service delivery and other detailed aspects not normally the direct remit of the business leader. In this way, he is better informed from the outset—not perhaps as knowledgeable as a career insider, but to a sufficient level that he can lead effectively and credibly. Furthermore, people get to know the new arrival early and any pre-conceptions that might exist can be addressed. In Fiacra’s case, he also attests to the value of understanding the business and the people early. An approach that he highlights is meeting the senior insiders on an individual basis without an agenda. This allows both parties to get to know each other and, hopefully, build some early trust and common ground. While circumstances can result in needing to adopt the CEO role during the business creation or takeover transition, requiring an initial deep involvement on arrival, John takes an alternate strategy in the mid-term. He seeks out specialist business managers and technical expertise to embed in the organisation once acquired, leaving him free to scout for the next business opportunity. This is reflective of his entrepreneurial nature. While acknowledging above that outsiders are likely to bring change, as this is often part of their value proposition, we also note that the extent of that change needs to be carefully contemplated. As highlighted earlier, outsider leaders may not be initially operating from a fully informed position, which potentially brings its own risks (Karaevli and Zajac 2012; Shapira 1995). In a challenging or difficult situation, the outsider leader may need to approach change in quite a dynamic and even direct manner to generate the required actions. While John reflected on his natural inclination to stand back from day-to-day business leadership, the Seafield Gentex receivership proposal led to him stepping into the company’s CEO role. Anthony, Regina, Fiacra and Grace each note how some insiders seemed reluctant to change; as leader, they had to confront this perspective at times and address it to ensure the business could develop under their leadership. When there are no ‘burning platforms,’ a softer tone can be adopted as changes are phased in at a slower pace. In this respect, a number of the outsider leaders that we encountered seek to maintain stability and consistency at least initially and where appropriate to allow insiders to adapt to the new ways and approaches. This acknowl-

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edges the fact that the level of change already—with a new leader coming on board—may be traumatic enough for some insiders without loading on more adjustment. In addition, this gives the new leader an opportunity to embed themselves in, get to know the place and the people that they will be working with and to take their time at what is a crucial period for everyone involved. A sensible and sensitive appraisal of the environment on entry and reflecting upon this can be a helpful activity for the outsider leader to engage in until they are ready to take on more challenging areas. In the course of this, they will seek to establish relationships, and this is now considered.

10.4 E  stablishing Insider and Outsider Relationships The “relational” leadership paradigm (Uhl-Bien 2006) has placed a considerable emphasis on the importance of the relationships that leaders have with their followers and their impacts on the leader’s performance. Such relationships, built upon trust, can generate commitment and loyalty from those on the inside (Ahn et al. 2012; Vaid 2015). That said, being trusted is something that outsiders may not have because of a lack of existing relationships (Manderscheid 2008). From the cases in the book, we note how outsider leaders understand that in order to succeed and for the organisation to benefit they need to find ways to integrate and be accepted and to establish their credibility with their followers and other stakeholders. In this respect, they need to transition from outsider to insider, and be supported by their new colleagues, particularly those in the top management team (Miller 1993). Achieving this can be challenging. We outlined above Fiacra’s entry approach, which involved informally meeting other managers before joining, and remarked as to the suitability of this approach in forming initial positive relations. His chapter also shows how some resisted such approaches and did not want to meet with him. This emulates Grace’s experience somewhat, as colleagues had little prior experience of her as an outsider and some may have anticipated the

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role for themselves. The difficulty here appears to be that, while trust and credibility needs be formed to create a relationship, this was perhaps initially lacking because a basis for this reciprocal process had yet to be established. In Fiacra’s case, they did not understand his motives for meeting, even though these were entirely honourable and positively focused. Grace sought to approach an individual who had not fully bought into her appointment in the same way, an interaction that proved valuable in the longer term. This is a dilemma for which there may be no easy answer, but the fact that most managers appeared comfortable to work with both Fiacra and Grace in this manner suggests that we are dealing with a minority here and that perhaps the majority will embrace the gesture in the intended spirit. The hope would be that if the more resistant cohort see others engaging successfully and positively, they will follow suit. In this respect, the approach makes sense but the outsider— as Fiacra and Grace demonstrate—needs to be patient and allow the insiders to get used to the new arrangement at a reasonable pace. In addition, the outsider leader needs to demonstrate to the insiders that they are committed to the organisation, and this is acknowledged in Roland’s chapter. While they may have an extensive and successful track record already, this is elsewhere and historic. They are starting from square one again in terms of relationships and need to show to those already there that this will be a long-term and mutual engagement between them. Otherwise, insiders may wonder, where is the value in investing in the relationship if the outsider is merely passing through? As we will discuss further later, resistance to the outsider is not an uncommon reaction and can be a significant challenge but needs to be handled appropriately and reasonably if relationships are to be fostered. Part of this is listening to the dissenting voices and taking on board their issues and concerns. Regina’s experience shortly after her promotion to CEO (having unintentionally neglected to greet a long-term colleague in the corridor) reinforces the fact that one’s actions are magnified in the leader role. There is value in learning from insiders, as they have knowledge and viewpoints that the outsider may be lacking (Chung et  al. 1987; Karaevli 2007; Karaevli and Zajac 2012) and this is illustrated from Grace’s, Fiacra’s and Roland’s desire to engage early and Dennis’ interactions with new senior hires. Interestingly, Roland welcomes a level of dissenting

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opinion and even plans for it by seeking out the views of those who he knows will argue with him on certain matters. John emulates this perspective, ensuring that he maintains relationships with honest brokers within his entrepreneurial networks, while Anthony had the benefit of his father’s perspective throughout his early career. This allows the leader to maintain focus and perspective, particularly when they have become part of the inside themselves and need a contrarian viewpoint to challenge them and their decisions. As Grace now resides in the centre of the organisation as MD, she depends on the Board Chairman as a mentor, as he “doesn’t work in the business” and challenges her in a way he makes her think “could you have done things differently?” In a sense, it is better to have these debates and arguments internally beforehand rather than having them played out in public, during or after the event. Similarly, Dennis’ ownership structure requires that he and his brother openly engage with a non-family investor in making decisions. This forces them to contemplate items from a more external perspective as well. In essence, by pre-empting what outsiders think, matters can be addressed in advance. As Roland’s chapter demonstrates, it is the unanticipated challenge that can be most difficult. While there is value in giving cognisance to resistance, there are red lines that must be clarified. In Dennis’ case, this is around the level of engagement in the innovation process, something that others are in no doubt about and that he remains consistent and steadfast on. Those who are insiders in every other respect—by being part of the company—are actually treated as outsiders somewhat in this process because there is a danger that too much interference will hamper the pace of progress that is critical in the technology sector. Similarly, Fiacra expects management to work collectively as a group and acknowledges that those who are pulling in the other direction need to be addressed by the leader or even by the group as a whole. Judicious steamrolling over resistance—not a practice engaged in by the leaders in this book—is unlikely to sustain healthy working relationships and damages the credibility of a leader looking to establish themselves as a team player and on the inside. Mutuality provided a landscape for progress in Anthony’s case, where a win-win position was sought in engagement with both staff and the Board of Directors. In this respect, adopting a contingency or situational leadership approach

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may be of benefit generally, allowing the outsider leader to initially nudge people in the direction required, through active engagement and taking on board their perspectives, but then adopt a more directive manner as needed if that is not effective for all. What is key here is for the outsider leader to carefully contemplate the chosen action in advance and the likely impact of this both on the issue at hand and on the ongoing nature of their relationship with insiders.

10.5 H  iring Strategies of Outsider Leaders: From Without or Within? While this was a smaller theme, in terms of prominence within interviews, we still believe that it is a valuable one to reflect on here. Having come from the outside, and understanding the benefits of external knowledge and perspectives and indeed why they were brought in, one might presume a degree of bias in the joiner leader towards other outsiders. This, however, is not the case, and we see arguments for both internal and external appointments, which is consistent with their own acknowledgement of the value of insiders and what this cohort contributes. Fiacra highlights the need for leaders to engage in a balanced hiring strategy, introducing outsiders for their contemporary thinking and that extra edge they bring to the business while retaining, developing and promoting insiders because of the existing knowledge and contextual insight that should not be lost (Chung et al. 1987; Shen and Cannella Jr 2002). John’s acid test is that if the person he hires “can live with me then I can live with them,” with the caveat that if hiring from outside, professional contacts are vital when locating key personnel. Regina’s view is that she likes “to win with people,” regardless of where they originate from, and she believes there is an opportunity to encourage those with potential within the organisation when senior roles become available. This also sets a ­positive example for other insiders with ambition. In this respect, the leader needs to find ways to blend both to deliver better organisational outcomes. Anthony believes that distributing outsiders and insiders within each team helps collegiality take hold at project level, a finding

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that is echoed in the distributed leadership literature. Roland, as outlined above, sees virtue in bringing in people at senior levels who constructively challenge the leader and add balance to the decisions that he has to make, while Grace seeks the alternative view from her Board Chairman. However, as with the outsider leader, Roland acknowledges that external hires need to also adopt a careful and measured entry to integrate with the team. He is less interested in taking on the outsider who is in a hurry than the person who moves at a pace that is respectful of others and the environment, while John points out that new hires need to be flexible enough to lead a growing enterprise. This is similar, indeed, to how we find that outsider leaders themselves operate on arrival. Interestingly, Dennis’ case—who is possibly the most insider of our outsider leaders by virtue of his significant ownership relationship and tenure with the organisation—presents what may be the strongest defence of external hires. He acknowledges the importance of being loyal to his colleagues in terms of promotion and does promote from within where appropriate, but sees risks with this approach, particularly when technical performers are pushed into management roles for which they are not suited. Indeed, it can be argued that this is not fair to the organisation nor the individual as neither is best served by what may possibly be a flawed decision based in part on collegiality and equity exercised to an excessive degree. Where the insider leader becomes potentially over-­ invested in relationships with their followers, for undoubtedly positive and valid reasons, they may run the risk of loyalty clouding their judgement. This is not to say that the insider follower is not the right person— the chapters do demonstrate that this can often be the outcome and that promotion from within sends out very important and valuable signals— but that caution and reflection is understandably required. Is the outsider leader best placed to make such calls? That is difficult to say, but one could argue that for either type of leader, such decisions should be made while adopting both an insider perspective and an outsider perspective, which in this case entails balancing both head and heart. Interestingly, John adds a cautionary note here, stating that even with best efforts, one cannot always get it right when it comes to hiring new people. We now move to consider briefly what this combined insider/outsider perspective is in practice.

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10.6 Insider/Outsider Perspective: Leaders Wearing Two Hats We agree with the views of Karaevli (2007) and Louis (1980) when they contend that the insider/outsider dichotomy is not as simple or as binary as it perhaps first appears. Instead, following Finkelstein and Hambrick (1996) and Shen and Cannella Jr (2002), we argue that it may be better viewed as a continuum, scale or spectrum. This is built less around the physical person and to a greater extent around their perspective or view, which is much more fluid or blended (Unger 2000) in nature. Arguably, what we are seeing here are illustrations of the “tactical outsider” (King 2002; Gladwell 2008), as leaders choose consciously to act or think in this manner to serve a particular purpose. In some respects, operating in this way—as noted earlier—, leaders may even become “social” and “psychological” outsiders, but in a controlled and perhaps temporary manner that is cognisant of the risks attached to remaining within these categories more broadly. Thus, we tend to align with Bower’s (2007) suggestion that leaders can effectively function as insider/outsider ‘hybrids.’ However, while his take appears to be that insiders should look to cultivate an outsider perspective, we see this also in a wider sense and contend that those who were formerly outsiders—from beyond the organisation and even sector— can become insiders but also maintain their previous mindset and resources to call on as needed. The value of the insider/outsider perspective (David and Turner 1996; Lauterbach et al. 1999; Manderscheid 2008) was a significant theme in Dennis’ case, as he operates as an insider who attempts to lead his organisation by taking an external/outsider view where it is beneficial. John confirms this perspective, noting that one of the hidden talents of outsider leaders is their willingness to step outside to gain a fresh view of the inside. Many of the other leaders proffer the benefit of a blend of insiders and outsiders in pursuit of a balanced perspective and that an imbalance (e.g. too many of one or other cohort) is perceived as a bad thing. However, when the leader is one of the few outsiders within the entire company at senior levels, as was the case for Anthony Dinan when he first joined TCH, there is an additional challenge of getting outsiders to join, and remain in, the organisation.

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We should not underestimate the challenge of maintaining the insider/ outsider perspective over time (Geiger 2015), particularly for someone who is, or is closely liaising with, an owner-leader, and this requires a high degree of juggling on the leader’s part. This is evident in Dennis’ divided views on empowerment and the implications of this for the organisation, a challenge echoed by Grace when seeking to clarify role demarcation and decision responsibility in the top management team. In the latter case, the founder’s trust in Grace and the senior management team allowed them to successfully negotiate and renegotiate a complex insider/outsider leader balance over time. Anthony echoes this perspective, noting that when the outsider first joins an organisation, they bring a different culture, but over time this becomes distilled. He recommends emulating the outsider view by having established staff members participate in short term secondments to other organisations to see how things operate elsewhere such that this outsider insight can be brought ‘home.’ In both Dennis’ and John’s cases, as business owners they can see considerable merit in delegating responsibility and autonomy to highly talented staff. This reflects their inside knowledge and trust of them and their skills, built up with some through a multi-annual working relationship in Dennis’ case, and through John’s significant experience in building senior management teams in several organisations throughout his career. As a leader, Dennis moves amongst his staff as a colleague in a comfortable manner, influencing and engaging with them on a work and a personal level and staying highly connected. Regina emulates this approach, conscious of “the impact that you can have when you’re the CEO.” However, Dennis adopts what might be considered a rather contrarian view and sees positives in taking a controlling approach to leading in some contexts that could be more associated with someone who is perhaps operating at a distance. Any apparent contradiction here becomes clarified when we consider his motives for doing this: as leader, he sees the need to stand apart on certain aspects (innovation is a key example) and make the decision personally or within a small circle of decision makers. Regina, John and Grace also echo this perspective, stating that it is they who must live by their decisions, and that accountability rests with the leader. Each acknowledges that this approach does not always meet with universal favour amongst those they are closely connected to. Regina’s decision to

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pursue a career in electronic engineering was not met with resounding support at school or at home, while John notes that there are times when people are happy to see him go. Grace highlights that it helps to cover all the angles and listen before you act to alleviate this potential, but that the decision must be made. This is both more expedient on matters that cannot be held up by elaborate debate and reflection and takes some of the associated pressure away from staff. Is this likely to be an effective strategy to take for all insiders, being an outsider simultaneously and switching perspective as the need arises? Possibly not, as both Dennis’ and John’s ownership status facilitate their approach; in a larger, more politicised or bureaucratic entity, there may be barriers and blockages that prevent leaders from working this way. When one considers the experiences chronicled in this book, employee homogeneity and a wariness of outsiders were both highlighted as challenges to retaining the insider/ outsider perspective in a number of the cases. In Anthony’s case, the decision was made to encourage outside applicants who brought an alternative perspective to the insiders, who had exhibited a resistance to develop and grow with the company aspirations. That said, a number of our other leaders— now as insiders—also speak of the virtues of thinking like an outsider in either a personal capacity or with the assistance of others, something that has presumably been developed in them by wearing both hats along the way. Fiacra notes how “it brings you a different view on the business,” while Roland regards his diversity of experience and the perspective that stems from this as “my competitive advantage.” In this respect, we encounter outsiders who became insiders, but seek to sustain a ‘hybrid,’ blended way of thinking, reflecting Birshan’s (2016) suggestion that it is possible to retain a fresh perspective by maintaining an outsider lens and through learning from others.

10.7 O  utsider Leaders: The Challenges for Themselves and Others While the individual chapters articulate a number of benefits that outsider leaders can bring to organisations, it would be remiss not to acknowledge and discuss the challenges that can stem from their appointments. These challenges are not just for those they are working with or

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for, but also for the leaders themselves, who may find that the level of adaptation and adjustment required is too much. Clearly, there are risks associated with an outsider in any context, and recent research (Rejchrt and Higgs 2014) has indicated that organisations tend to appoint successor CEOs from internal candidates because of their similarity (Davidson et al. 2006; Schneider 1987) to those previously in place. From Carlson (1961), insiders will allow for a changeover that is smoother in nature and with less prospect of disruption, with Chung et  al. (1987) and Liang (2016) noting that they are already well connected through presence and association. The outsider risks can be amplified when the person is in a position of power as they are unknown and unproven in that environment and culture (Karaevli 2007), and may lack valuable firm or industry specific knowledge (Karaevli 2007; Liang 2016; Shen and Cannella Jr 2002). Roland was regarded as an outsider, in certain quarters, when he took up his role in Bilfinger. Transitioning from a highly prominent career in politics, some commentators were surprised at the move. However, any misperception of ‘risk’ that may have been associated with him coming seemingly from the outside stemmed from a lack of understanding amongst others that he was also (then and since) an established and experienced business person. In this regard, it is a challenge at times for the outsider to dispel myths and change potentially biased views by articulating and demonstrating how they are the right person for the job, with the right skill set. Fiacra may have faced an element of this in Compass Group Ireland—not having worked in the contract food sector before—and this could perhaps partly explain the apparently adverse reactions of some to his arrival. Grace recounted a similar experience when she first joined Java Republic, requiring “those frank conversations around the table” to move people to a place of mutual trust. The outsider label can, unfortunately, have negative connotations, and may arise from a premature leap to judgement as opposed to a reasoned appraisal of the individual, their circumstances and compatibility and what they offer. Having encouraging support—both professionally and personally—can help to maintain motivation and enthusiasm in the face of adversity during the transition phase and beyond.

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We have already mentioned the fact that a number of our outsider leaders experienced some forms of resistance or challenges in their new organisations at different junctures. For Roland, this arose with a key shareholder; for Fiacra, with some colleagues at the outset and during difficult periods; for Grace, anticipation that an insider was appropriate for the role; for Anthony, when he transitioned into the role of HR Director; and for Dennis in his role as product champion as he pushes through innovations. This was unsurprising and outsider leaders seem to essentially anticipate this as an outcome of change. There can be a fear of the outsider and what they are bringing, or indeed taking, when they join as their new vision can have implications for those in situ which may lead to tension or hostility as a result (Shen and Cannella Jr 2002). Whether the implications of their changes are ultimately positive or negative for insiders may only become clear over time, but there is a certain comfort with the status quo even if it is far from optimal. Regina experienced “an almost civil service” culture following the DMR/Fujitsu merger, with an aversion to risk exhibited in the parent company that needed to be alleviated to compete in the applications sector, which was essentially “a risky business.” Despite this reality, leadership within the merged entity was complex as the merger resulted in a “huge cultural change” for DMR personnel, with a number of DMR people leaving as a result. Fiacra notes how some people can “revert to a kind of clampdown a little bit” in response to new initiatives. The surprise in this case was that what he was seeking to do was to grow the business, which, one would anticipate, should be in the interests of staff and managers with regard to job security and prospects. However, some reacted in a manner where they seemingly preferred to keep things as they were, which was as part of a business that had experienced challenges and that had been engaging in cost cutting. This view was somewhat emulated in Anthony’s case, when a careers night ­organised by the company for younger members of staff interested in further education was poorly attended, with only “two out of about fifty” staff attending the event. The logic, in a number of these situations, here seems to have been that it is better to stick with what you know, however hard it is, than to take a chance on something that could be better but that you don’t know. There appeared perhaps to be an aversion to change and to strive through

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any associated difficulties, which was realistically bad for all and a challenge for the outsider to overcome who may be perceived as a threat to the existing state. In terms of addressing this, for the outsider leader there is no ‘magic bullet’ that can resolve such resistance, and in some cases, outside applicants and appointments were encouraged to loosen the status quo. However, as noted previously, adopting a steady-paced approach to entry can help in instigating necessary changes and by avoiding taking an overly radical approach in the early stages. Fiacra attests to the value of being patient, which may allow issues to run their course naturally, but this cannot continue indefinitely. It takes time for the outsider leader to establish themselves as an insider, and during this period, there is value in allowing the incumbent members some time to adjust. That said, challenges or issues—which Dennis and Grace appear to have had some experience of—may at times also need to be addressed more directly. The “Leader’s Trap” that Dennis describes is a cautionary tale of how facing interference and dissention and not dealing with it effectively can have serious implications for all stakeholders and the organisation. This is a call that the leader ultimately has to take in context, in terms of what is required, as they may also be the one that needs to change by being more inclusive. However, when they are more ensconced on the inside and have social capital built up with the group, this may be easier to action in terms of achieving an outcome, even if it can be personally difficult sometimes on the back of relationships that have formed. An interesting, and somewhat novel, experience in Fiacra’s case was the re-entry of the owner in one organisation, which resulted in a shared or co-leadership role. In essence, the outsider had become an insider, while the former insider was returning as an outsider. This proved to be quite challenging for Fiacra, who had put his shape and style on the business that was different to the owner and, it seems, how they wanted to approach things. In this respect, we are getting an insider perspective as to what it is like to encounter an outsider entry where the change is quite fundamental, something that, as we have already noted, can present challenges. What further complicates this scenario was that we now had, in effect, an insider leader and an outsider leader running the business together in a co-leadership-type arrangement. If both leaders were

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in unison as to the approach to take (as seems to be the case in Dennis’ and Anthony’s organisations, where agreement is reached between the family and non-family shareholders), or if they had suitably demarcated the role (as in Grace’s case where roles were negotiated and renegotiated with the founder), this may well have worked. As it was, the arrangement lacked this common ground needed to ensure progress.

10.8 G  ender and Outsider Leadership: Where Are We Now? The female leadership debate is, presently, a key debate, and our review of the literature in this sphere and our female leader insights from Regina and Grace highlight many of the issues and opportunities relating to this debate. To summarise what we already know from the literature, multiple factors prevent gender equality at senior levels in organisations, including social barriers, trait stereotypes and perception, cultures and structures (e.g. Bird 2011; Diehl and Dzubinski 2016; Haile et al. 2016; Koenig et  al. 2011; Moore 1988). While there is growing pressure to address these factors, as Sect. 2.9.2 (Chap. 2) shows, research exists that appears to both support and challenge the argument that greater female leadership representation is effective at the organisational level and indeed that the approach being taken can be problematic for those involved. Although we can only skim the surface of this debate with a sample of two female leaders, we still feel that it is useful that we make some contribution here, however small. From the perspective of this book, our two female leaders are demonstrably outsiders but for reasons that go beyond their gender, as we have shown. In particular, it is useful to look beyond the generic term ‘female leadership,’ and comprehend sectoral norms. The chapters do surface reasons for why STEM disciplines continue to have low female participation, perceived to be a “pipeline problem” within the STEM realm from Regina’s perspective. The challenge here is partly explained by societal norms, with those in the engineering profession believing that parents and school teachers could do more to encourage more female students to

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take STEM subjects to help alleviate professional stereotypes (Women in STEM 2017; Dennehy and Dasgupta 2017). Grace acknowledges that she needed “to break in” as there were few female leaders in her industry when she was starting out, and Regina points out that a core component in supporting change is a “culture of inclusion,” leading us to consider the role of mentoring in this debate. A number of the leaders exhibited in this book acknowledge the benefit of mentors, particularly in the early stages of their career. Literature notes that low participation rates within a profession can lead to a lack of early-career female mentors, ultimately curtailing female retention (Dennehy and Dasgupta 2017). Regina seeks to encourage women within her sector, believing that when in a female leadership role, one has a “duty of care to the other females in the organisation,” as there are few female leaders to pull from. This is not to suggest that individuals should only mentor their own gender; rather, it acknowledges the difference in psyche between the genders, with women less likely to put themselves forward for promotion without some encouragement. For those who are at or approaching senior levels in their careers, Grace and Regina each acknowledge the value of having a supporter in your professional corner when considering a step up the career ladder. However, neither individual seeks to exclude men, pointing to the value of diversity of thought in any team. Notably, many female leaders today have lived through an era where the compatibility between career (particularly at senior levels) and family was not always wholly facilitated by society or social structures. Thus, where we are today may be—to some degree—a generational artefact. In this regard, the available pool of future leaders was being drained because of a lack of perspective and foresight by those in power. This was further hampered by poor support for women with young families in terms of adequate childcare resources in many countries. Today, these attitudes have changed somewhat and continue to, thanks to greater discussion and consideration around the issue of female representation in management and leadership roles. In addition, the state (in some countries) now has in place enhanced leave provisions and other targeted resources to better facilitate those with family or care responsibilities who wish to return to work in demanding roles. We also have leaders such as Grace and Regina who— through their stories and achievements—demonstrate to aspiring female

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leaders what can be achieved. That said, there is still a distance to go and— for now—we can see how female leaders can be outsiders arising from gender, while noting that it does not have to be this way. Of interest in this book is that the idea of quotas was met with some resistance, with both female leaders pointing to merit and skill rather than gender as valid selection criteria when promoting business leaders. However, each also points to the prevailing imbalance as one which presents a diversity challenge within organisations, potentially leading to suboptimal decisions. Hence, the dilemma remains and the debate continues.

10.9 Concluding Comments In Chap. 1, we argued that outsider business leadership was an important and contemporary domain that requires further research. The intervening chapters have strived to address this, as we have examined the concept through interviews with outsider business leaders in the context of available literature and prior research. We believe that, in the individual case chapters and in this concluding chapter, we have contributed to this domain through supporting, disputing, refining and expanding aspects of the existing knowledge base. For example, we have introduced some further clarity as to what it means to be an outsider business leader, the implications of this at an individual and organisational level, and the approaches that can be contemplated by such leaders. However, in these concluding comments, it is not our aim to replay these contributions, but rather to acknowledge that more research is needed. We believe that opportunities exist to study larger samples of outsider business leaders— quantitatively and qualitatively—to introduce greater diversity into the concept and add to, refine and clarify our findings further. Examples of dimensions that could be examined include minority leaders and leaders who have transitioned from the private sector to the public sector, but we believe that there are many more types that would be valuable to study. In addition, a larger-scale study could look to develop conceptual and/or theoretical frameworks to bring together different facets of the concept across various contexts. We strongly encourage other researchers to examine outsider business leadership further as it is a rich and interesting

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domain, at both an academic and practical level. The curiosity surrounding the ‘outsider,’ in multiple contexts, is unlikely to subside anytime soon.

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Index1

A

B

Acceptance, 14, 22, 45–47, 57, 90, 94, 98–100, 103–106, 110, 125, 144, 148, 186, 210, 213, 216 Advantage, 15, 17, 22–23, 25, 52, 58, 84, 92, 93, 96, 97, 103, 110, 135, 141, 146, 153, 161, 192, 203, 213, 225 outsider leader, 14, 22–23, 58, 96, 103 Appointment(s) hiring managers, 123 hiring people from outside, 47 hiring strategy, 221 promotion, 97, 150, 209, 219 recruitment, 8

Benefits, 2, 14, 24, 29, 30, 51, 58, 96, 97, 114, 118, 125–129, 145, 146, 148, 152, 161, 162, 167, 169, 170, 174, 178, 183, 184, 196, 198, 201, 211, 215, 218, 220, 221, 223, 225, 230 C

Challenge(s) outsider leader barriers and challenges, 25, 29 planned challenge, 55–56, 58 unplanned challenge, 45, 55–56, 58

 Note: Page numbers followed by ‘n’ refer to notes.

1

© The Author(s) 2019 C. O’Riordan et al., Outsider Leadership, https://doi.org/10.1007/978-3-319-97463-7

237

238 Index

Change, 3, 6, 8, 10, 12, 14, 18, 19, 22–25, 41, 44, 48, 49, 51, 53–59, 75, 76, 79–82, 84, 87, 88, 90, 91, 93, 95, 96, 99–109, 119, 132, 135, 141–143, 149, 151, 153, 154, 156, 161, 171, 174, 178, 188–191, 198–199, 202, 210, 213–218, 226–228, 230 resistance, 23, 25, 58, 82, 107, 228 Chief Executive Officer (CEO), 7, 8, 10, 18, 20, 21, 24, 29, 44, 54, 56, 57, 65, 66, 75–79, 81, 84, 87–89, 94, 95, 103, 122, 131, 132, 139, 152, 162, 166, 167, 169–172, 181–183, 190, 198, 200, 209, 217, 219, 224, 226 Conflict, 14, 51, 105, 149, 182, 183 Credibility, 20, 24, 25, 48, 55, 98, 110, 191, 218–220 Crisis, 22, 47, 56, 58, 59, 74, 88–90, 103, 104, 106, 108, 147, 198, 214, 215 Culture, 2, 3, 10–12, 18, 19, 22–27, 29, 42, 49–51, 57, 59, 71, 80, 82, 84, 88–90, 95, 104, 108, 129, 139, 144, 151, 152, 167, 170, 171, 177, 178, 182, 183, 188–190, 201, 203, 213, 216, 224, 226, 227, 229, 230 multi-cultural, 71, 76

D

Demarcate/demarcation, 71, 107, 177, 193, 196, 214, 224 Disruptor, 129, 149, 150, 154, 228 Diversity, 7, 28, 52, 60, 65, 75, 80, 83, 84, 160, 178, 203, 213, 225, 230, 231 E

Education, 12, 15, 51, 64, 67, 67n4, 68n5, 68n6, 90–92, 97, 117, 140, 153, 163, 177, 185, 189, 209, 211, 227 Empowerment burnout, 150 controlling, 148, 224 empowering people, 147 participation, 148 Entrepreneur acquisition, 121, 129 entrepreneurial leadership, 102, 114, 116, 130, 147, 151, 159 opportunist outsider, 132 serial entrepreneur, 113–132 speculate/speculative, 114, 116, 120, 125, 128, 132, 213 staying connected, 125 Experience, 3, 10, 12, 13, 16, 22, 23, 25, 27–29, 45, 48, 50–54, 57–60, 67, 69–72, 74, 76, 77, 80–82, 84, 92, 93, 95, 96, 101, 102, 106, 107, 109, 114–117, 120, 124, 137, 147, 148, 151, 153, 163, 164, 168, 175,

 Index 

176, 186–190, 200, 203, 209, 212, 213, 218, 219, 224–226, 228

239

Integration, 57, 66 Internationalization/ internationalisation, 136, 137, 155

F

Family firm non-family business leader, 181, 182 Founder, 87, 88, 135, 159–178, 182, 208, 209, 224, 229 founder-led, 159–162, 165, 172, 176

K

Knowledge, 2, 3, 18–20, 23–25, 46, 48, 50, 52, 57–60, 72, 74, 89, 94–97, 102, 106, 107, 109, 110, 136, 138, 140, 141, 143, 144, 146–148, 156, 169, 181, 195, 203, 209, 213, 219, 221, 224, 226, 231

G

Gender discrimination, 26 equality, 26, 27, 80, 229 female leader(s), 27, 28, 66, 83, 208, 229–231 stereotypes, 26–27, 80, 229, 230 I

Insider clampdown, 105, 111, 227 insider leader, 9, 20, 22, 24, 25, 55, 59, 108, 113, 114, 222, 228 insiderness, 14, 20, 151 insider-outsider dynamic, 162 insider perspective, 132, 152, 222, 228 instinct, 55, 107, 213 legacies, 212 loyalty, 20, 152, 153, 156, 212, 218, 222

L

Leader authentic/authenticity, 80, 83, 84, 173 boundary spanner, 143, 155, 212 delegate, 136, 202 follower, 20, 83, 84, 144, 155, 218, 222 ‘hybrid’ leader, 25, 223, 225 implementation, 153, 156 outsider business leader, 15, 19–22, 113, 231 outsider leader, 2–30, 41, 42, 52, 53, 58–60, 87–111, 130, 132, 135–156, 161, 176, 177, 182, 201, 208–211, 215–219, 221–229 reflective leader, 139, 143–145 team, 178, 182

240 Index

Leadership co-leadership, 102, 104, 107, 108, 228 effective leadership, 7, 66 female leadership, 27–29, 65, 80, 82, 84, 229, 230 leadership style, 78, 147, 155, 162, 171 outsider business leadership, 4, 162, 231 outsider leadership, 3, 7, 9, 65, 87–111, 137, 207, 209, 211, 229–231 persistent leadership, 54 relational leadership, 9, 17, 27, 218 strategic leadership, 77, 211 M

Managing director (MD), 87, 90, 94, 162, 165, 167–172, 174, 184, 186, 188, 190, 191, 193, 195, 196, 214, 220 Mentor, 64, 68, 83, 84, 118, 164, 172, 174, 175, 177, 203, 209, 230 O

Opportunity, 48, 57, 69–72, 78, 82, 87, 94, 99, 100, 114, 115, 118, 120, 124, 126–129, 131, 132, 141, 154, 174, 183, 186, 189, 210, 212, 217, 218, 221 Organisation, 2, 5, 46, 65, 87, 115, 159, 208

Outsider leader adaptability, 89, 95, 101, 108, 109, 153 balanced outsider, 96–97 being different, 16, 141–142 blending, 90, 96, 106, 110, 145–147 day-to-day, 53, 94, 103, 122, 129, 135–137, 144, 153, 160, 172, 174, 189, 217 ‘deep dive,’ 48–49, 57, 59, 216 double outsider, 20, 208 external, 57, 93, 98, 146, 170, 182, 184, 210, 221–223 female outsider leader, 63–84 iconoclast, 21 internal, 21, 50, 51, 60, 79, 89, 107, 110, 129, 143, 146, 154, 160, 170, 186, 203, 209, 213, 221, 226 juggler, 137–155 management, 23, 28, 53, 90, 96, 98, 100, 101, 104, 105, 108, 113, 120, 164–166, 170, 181, 182, 184, 185, 188, 191–194, 213, 214, 230 network, 80, 93, 132, 138, 144, 220 outsider, 5–30 outsider concept, 3, 5–30 outsider factors, 12, 13, 209 outsider/insider leadership dichotomy, 9 outsiderness spectrum of outsiderness, 20 outsider reactions false outsider, 17–19 mediator, 19

 Index 

outsider types psychological outsider, 12, 14–17, 223 social outsider, 12–15, 210 tactical outsider, 12, 14–15, 211, 223 phased introduction, 167 returning outsider, 102–104, 209 sectoral outsider, 87, 208 serial outsider, 87–111 support, 23, 68, 100, 104, 120, 122, 132, 138, 140, 168, 225, 229, 230 Outsider perspective distance, 127, 144–147, 224 outside eye, 125 outside-in perspective, 129 step outside, 130, 154, 164, 223 Owner manager, 88, 135–137, 155 P

Perspective, 3, 6, 12, 16, 22, 25, 48, 52, 54, 60, 70, 82, 91, 92, 96, 97, 102, 110, 116, 118, 120, 121, 125, 130, 132, 142, 146–149, 152, 155, 173, 176, 181, 182, 189, 193, 195, 196, 200, 208, 209, 211–213, 215, 217, 220, 222–225, 228, 229 Politics, 2, 11, 28, 41–60, 213, 216, 226 political leadership, 41 Predictability stability, 45, 53, 59 stable, 57

241

Professional manager, 87–89, 124, 127, 160, 182, 183, 190 R

Relationship(s), 7, 9, 10, 14, 19, 20, 24, 27–29, 41, 48, 51, 59, 93, 95, 97, 98, 102, 105, 108, 110, 139, 146, 150, 151, 153–155, 159, 161, 162, 170, 175–178, 183, 190, 192, 193, 214, 215, 218–222, 224, 228 Respect, 3, 12, 13, 46, 48, 52, 55, 57, 59, 91, 93, 96, 100, 101, 105, 109, 142, 147, 151, 152, 156, 177, 184, 202, 212, 215, 217, 219–221, 225, 228 Risk, 23, 53, 70, 72, 121, 124, 183, 184, 210, 215, 222, 226, 227 S

Sector, 21, 52, 63–84 Self-identity theory, 16 Similarity-attraction, 8, 24 Social group, 10–13, 15, 16, 18, 27, 210 Social identity, 10, 14 Succession/successor, 7–9, 21, 22, 24, 29, 54, 60, 88, 92, 167, 184, 198, 226 Systems, 42, 43, 47, 51, 54, 66, 89, 90, 95, 101–102, 109, 138, 141, 149, 165, 166, 173, 176, 213

242 Index T

Technical skill, 84, 122, 123, 132, 142, 167, 177 Threat, 48, 54, 56, 98, 110, 143, 182, 183, 228 Top management team, 23, 98, 183, 218, 224

Transition, 2, 20, 21, 24, 25, 56, 59, 88, 90, 92–96, 106, 111, 151, 167, 170, 191, 209, 211, 214, 216–218, 226 Trust, 20, 47, 50, 51, 98, 99, 106, 110, 130, 144, 146, 162, 169, 194, 202, 217–219, 224