This is the final entry in the series and the most difficult to write. Hopefully, there are valuable leadership lessons to be garnered. In my opinion there were three things that killed the magic that was LendLease.
Going from the we organisation to the me organisation. Most unfortunately LendLease was seduced by the management school thesis of individual reward contracts increases motivation to excel. What this did was to put the reward system in conflict with the value system ie the culture. The reward system won. At about the same time the Practice of Management Program, which espoused the elements of the LendLease leadership system, fell out of favour. Suddenly you have the elements of culture decline. (The culture killer act)
Failed bid to acquire State Bank of NSW. This was the missed opportunity for LendLease to reinvent itself as it had done many times in the past. The State Bank would have enabled LendLease to inculcate its successful culture into banking to extract greater value in a high margin business. And at the same time build the 5th pillar bank by consolidating other smaller banks and building societies. Ultimately, it decided it could not get scale in financial services and divested MLC. (The missed opportunity for high quality growth)
The fallout with GPT. This broke the vertically integrated business model that was so successful and very difficult to replicate. The alignment of interest that underpinned the collaborative behaviours broke down. The consequence was to reinforce the natural tendency to act in self-interest foregoing the value of collaboration while increasing the cost of competition. (The disaggregation of the business model)
I know this article is an oversimplification of events but there lessons here.
All organisations miss opportunities and make errors of judgement (when viewed with the clarity of hindsight). But the best organisations react earlier to mitigate the downside consequences and put themselves on a more positive trajectory before it is too late.
I hope you have enjoyed the series of articles and please provide your comments.
