The confidence game
Why winners win
The real world. So, rather than being an intrinsic quality of personality, organizational confidence is a capability to be developed just like, say, manufacturing efficiency. "It's a little more than an individual deciding to have hope," she says. An organization's success will always rise or fall depending on what its people do, "but whether you decide to take those actions at all comes from confidence."
Away from the banks of the Charles River where Harvard Business School can be found, real-world practitioners say that Kanter is on the mark. Paul Gudonis, head of Centra Software Inc. outside Boston, recalls his time at an Internet service provider in Silicon Valley in the mid-1990s. It was when the Web was really beginning to take off, yet service was plagued by serious outages as firms struggled under the load. "There was a real crisis of confidence," Gudonis recalls. Realizing that clients were growing increasingly jittery, his firm, BBN Planet, responded with a complete overhaul. There was new hardware for better backup systems but new thinking, too, such as guaranteeing that the network remained in service. The company, he says, had the confidence not only to realize that a sharp course correction was needed but also to actually make it. Those steps then became the foundation for the firm's growth into a billion-dollar business. "Confidence has to be earned," says Gudonis, who also chairs the Massachusetts High Technology Council. "You can't just dictate confidence in an E-mail." The value of Kanter's work, he says, is in making clear that managers need to consider confidence as an official tool in the toolbox. "She's telling leaders, 'You've really got to assess the confidence factor in your organization, figure it out, and [then] do something about it.' "
Steve Marquart, a director for the Bain & Co. consulting firm, recalls a food company client in tough straits because it came to be in the path of giant Wal-Mart. The food company needed to chop $300 million in costs, with most of the cuts to land on stores at the front line. The effort worked, at least in part, because the cost cutting was set up to allow a reluctant group of individual store managers some flexibility in how to trim their stores' expenses, he says. That freedom gave the store managers the confidence necessary to believe the program could work, Marquart says, while also avoiding the kind of across-the-board slashing that can be so debilitating.
On the other hand, to see how things can go terribly wrong, consider Kanter's account of the travails of Seagate Technology, the Silicon Valley maker of computer disk drives. The disk drive industry has long been an up-and-down business. But even by that standard, Seagate was in big trouble in the mid-1990s. Divisions didn't communicate with one another. An intimidating atmosphere, in which people were expected to follow orders and work long hours, gave rise to the derisive moniker "Slavegate." There was even an award--which people were proud to get--given to the manager who had been most argumentative at meetings. At one point, nearly a third of Seagate's products required rework, and the scrap level reached $200 million in one quarter. When IBM introduced competing products, Seagate lost $1 billion in sales in just nine months. In the years since, new management has cleaned house and worked to build teamwork--one of those cornerstones of confidence. By last year, the company was producing three times as many drives with fewer than half the people. Things had improved so much that when an engineer made a $10 million goof involving a new production process, he wasn't sent to face the firing squad. Instead, he reported the problem, and his "teammates" sprang into action to fix it.
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