Elisabeth Sundrum

By Dr. Charles M. Savage

Recently I met with Frau Elisabeth Sundrum, the former managing director of a 340-person joint venture between a major German electronics company and an American optics producer. This company has made remarkable efforts in reengineering to maintain profitability. I asked Frau Sundrum how it was possible that they were able to reengineer the company in two years, increasing sales and reducing the cost structure by nearly half.

Sundrum: First, we were motivated. We recognized that our cost structure was 30% too high and that there was a growing overcapacity in the market. We had no choice but to cut costs. Second, we were able, successfully, to reengineer most of our processes, both those in administration and in production. True, reengineering has gotten a bad name, but it has indeed worked for us, especially because we actively engaged all levels of the company.

Q: Was it just reengineering?

Sundrum: No, it was reengineering, plus…. Soon after taking over the company, I realized that we might have to downsize to keep ourselves competitive. But I did not want to use reengineering to cut head count; instead, I wanted to save jobs. By focusing on increasing sales and productivity and on cutting costs, we were able to maintain our prices and market viability with the same employment base. How did I do this? In the first few weeks of my tenure, I spent time walking around the company—I wanted to find those individuals who were ready to bring about significant change. Second, by talking with people in their own language and explaining that if we were not able to reengineer the company we might have to lay off some workers, I enlisted their support. This honesty and openness touched them and they became very cooperative in the reengineering projects.

Q: Reengineering plus, what do you mean?

Sundrum: Well-engineered processes are not enough. There is too much volatility in our market. I also needed a management team that could pull together, discuss the tough issues, and come to quick agreements on the right courses of action. We needed ‘agility in action.’ In the beginning, however, I found a team of people who were informative but not communicative. They had had some good years and so found little motivation to press hard. They were comfortable in their own boxes but they were not self-initiating. The comforts of routine meant they were not very self-reflective nor open to change. While they were ready to repair some processes, they had little energy to make fundamental shifts.

Q: Sounds like a tough situation, but perhaps not too uncommon. What did you do to address this condition?

Sundrum: First, I asked myself, as a woman can I live the values I expect my people at all levels to display? Can I communicate these values in an open and honest way? And can I be authentic as a person, winning their respect and trust? Indeed, I found that through self-reflection and a lot of quality dialogue with people in our company, that I was able to answer these three questions in the positive. In addition, I tested my people. I looked my Human Resource director in the eyes and asked him—if it were necessary—was he ready to lay off some of the people he had hired over the years? I let him see my tears of concern in this conversation and this brought out his own tears. It was amazing how cleansing this talk was for both of us. I knew that I had to be tough and clear, but in an authentic way. He had 24 hours to make his decision. The next day, after a lot of personal struggle, he came to me and said he was ready to cooperate, because he knew I was concerned about the business viability of the company and that I was not just trying to score quick wins with my superiors. In a similar fashion, I tested the strength and resolve of each of my key executives. Next, and this is very important, I lifted the quality of dialogue in our meetings. I challenged my staff to get in touch with their own feelings and to speak with both their minds and their hearts.

Q: Did some of them think that you were bringing too much of a feminine touch to the meeting?

Sundrum: No, they already knew my toughness on an individual basis and had also experienced my toughness in our meetings. As you say in America, ‘I did not suffer fools lightly.’ As you know, we have our masculine and our feminine sides, and we each need to draw on both resources. They knew I was strong and tough, but they also knew I have a deep sensitivity for what is right and fair. This can be a powerful combination. Gradually, they each got in touch with their own selves, their thoughts and feelings. They began to respond to their colleagues with comments that were rich in both emotions and insights. Instead of vying for attention, they would often actively build upon their colleagues’ ideas. This honesty made it possible for us to tackle the tough issues and discover the underlying pattern. Gradually, we broke the shallow, industrial-era notion that all problems had to be taken apart to be solved. Instead, we found that by interrelating complex ideas and activities, we were able to find and grow the right decisions. At that time we did not know that these were the ‘strange attractors’ so well documented in chaos theory.

Some say women are better leaders, but this is not necessarily the case. Many women have internalized men’s behaviors, denying their own identity. And too often these women are unfair to those of their own gender. Men, on the other hand, are blamed for being dominating and somewhat insensitive. Too often they have internalized the frustrations of their mothers who were not adequately respected by society. Likewise, they suffered the absences of their workaholic fathers. Both men and women need to be in touch with their own male and female energies if they hope to be authentic in their leadership.

Although I did not use the term then, after about a year we became a ‘community of leaders.’ No, rather a ‘community of authentic leaders.’ We had moved from a machine–like linear functional model. Instead of hiding in separate boxes, we were probably more like a ring of overlapping circles, perhaps an extended Venn diagram. We were becoming a ‘community.’ And because people felt they could be themselves, honest and open, their authenticity showed forth—many of them for the first time. Finally, these new leadership abilities were noticed by others in the company. These other employees now felt respected and valued. Trust and openness increased. Many of the games people had played for years stopped being fun. In short, by changing the climate and the culture, we were able to really leverage our reengineering projects for everyone’s benefit, including our customers and suppliers.

Q: If I can be so bold, it sounds like you were using the full person, their knowledge and their emotions. This is against our western tradition of rationality. Remember when Descartes said, ‘I think, therefore I am.’ He was signaling that ‘emotions’ are unimportant. But, you were upstaging Descartes by building your community of authentic leaders on the notion that we think and feel, therefore we are and we become.

Sundrum: Yes, and you know, it is hard work! But in the long run, it is so much easier and more invigorating when we do not have to put up with all those unnecessary defenses typical executives play. They clothe their actions in a ‘pseudo-hardness,’ but under the surface, they are revealing their insecurity and insensitivity, a legacy of the industrial era. And, believe it or not, ‘insecurity and insensitivity’ pull millions of dollars from the bottom line with nearly a whimper from financial VPs.

Q: Hmm, let me understand, you cut costs by addressing people’s insecurity and insensitivities. You cut costs by increasing the level of trust and openness of your management team, or ‘community of authentic leaders’ as you called them. And you cut time out of deliberations, another source of additional revenue. You know, as I think about it, I really get mad at the way some people refer to what you have done as working the ‘soft’ side of the organization. First, it was hard work to create a community of authentic leaders, and second, you got good hard monetary results. I am beginning to think that insecure executives use the ‘soft’ terms as a put down so they will not have to get in touch with their own authentic core. Could this be?

Sundrum: No, I don’t mean to be so critical. We have to see this in a historical context. The industrial era has had its own logic and set of values. It was not really necessary for people to be full persons, authentic persons. All they had to do was fulfill their roles. But this linear model is no longer adequate to the demands of the market. Quick and effective decisions require another quality of dialogue. If I had to sum up the new approach, I have found that when we value one another, we value ourselves. When we understand our values and can talk about them, we add value to our products and services. Notice that valuing and values help add to the valuation of our company. If an accounting firm authenticates the annual report, why should a CEO not bring authenticity to the leadership community in hers or his organization?

Q: Frau Sundrum, how would you summarize your experiences and learnings?

Sundrum: There’s a lot more that could be added about the social and cultural changes going on. But suffice it to say that our working life is not just a process of playing roles, but of finding one’s authentic identity in community with others. We have an opportunity to embrace the shift from the industrial era to the knowledge era with a better articulated set of values, a new sense of life’s rhythms, and an even more exciting and fulfilling work environment. Out of honest pain and struggle we will find our individual cores. We will be able to co-create our future ‘communities of authentic leaders’ on all levels to guide our companies into new and expanded business opportunities.