Just as survival demands that organizations accept and embrace
change, Andy Reardon might argue that achieving success ultimately means that leaders, too, must be willing and able to grow
and develop.
Since becoming president of TTX Co. in 2000 and being named
CEO in 2001, Reardon says his leadership of the $1.2 billion railroad equipment provider has shifted from an autocracy to a much
more collaborative approach, emphasizing delegation and based
on a strong foundation of trust, respect and a desire to push leadership and decision-making to all levels of his organization.
“I came into this position wanting to achieve certain things but
subconsciously did so with a style that has clearly evolved since
then,” Reardon says. “The style with which I came in wasn’t nearly as good as the style with which I manage now. Admittedly, I
came in somewhat autocratically, as I think a lot of new CEOs do,
and it’s out of fear of failure. That fear causes you to be, as fear typically does, rather myopic. You begin to live under the illusion that
you’ve got all the right answers, and you can’t accept a diversion
from that.”
Since unleashing the power of his employees’ experience
and talent, Reardon says the new and innovative ideas that
have resulted have been truly remarkable. And while the
potential benefits of collaboration are probably obvious to
most, Reardon says what keeps many business leaders from
cashing in is their general reluctance to surrender some
amount of control over their organization. After all, it is the
CEO who is responsible for a company’s overall performance,
and it is he or she who ultimately will be held accountable.
“I think a lot of CEOs want to do it, but they’re afraid of letting go,” Reardon says. “Letting go can make you insecure
because you’ve got somebody telling you, ‘I want to spend $10
million here, and here’s what I believe this company can derive
from it.’ It’s a case of how much you trust that individual.
You’re making some big judgments here. They’re going to have
long-term impacts on the company. At the same time, you can’t
bring this talent in the door that has everything you want, that
would be a find in anybody’s top management, stifle it and
think you’re going to keep them there. Not for very long. Not
with the kind of people I want.
“You get far more vision and creativity when you unleash the
minds that you’ve hired and let them explore and let them
make a few mistakes. You really begin to unleash the power of
their experience, their talent, their passion and their work
ethic. Before you know it, incredible, new ideas that never
were yours tend to bubble up to the surface that make you say,
‘Wow.’”
Under Reardon’s leadership, TTX has increased its fleet
capacity by 33 percent and made more than $3 billion in capital improvements. And though he says his leadership style is
still a work in progress, one thing he has undoubtedly
improved upon by leaps and bounds is his tendency to grant his team the authority to make their own decisions.
“As you become more mature and grow, you say, ‘Wait a
minute, this isn’t the way things should be — I’ve hired a lot of
talent and I’m telling them how to do their job?’” Reardon says.
“That’s backwards.”
Building the team
Because much of a leader’s ability to delegate stems from his
ability to trust those to whom he is granting authority, Reardon
says the first step in creating a truly collaborative environment
is hiring and retaining people who can handle that responsibility.
“My immediate predecessor, Ray Burton, used to say, ‘A good
CEO should work hard to put himself out of a job,’” Reardon
says. “When you reflect on that, it’s actually correct. Now, it’s
kind of like seeking perfection. You’ll never get there, but you
keep working at it and working at it, and when you have the
mindset that you can rely upon, then you can begin to let them
go.”
But what is the “right” kind of employee around which to
build a collaborative environment? Reardon has had the good
fortune to have hired every one of his direct reports. Though
the members of his executive team might represent a diverse
set of backgrounds and skill sets, what they share is an attribute that Reardon describes as “judgmental experience,” a quality critical to an individual’s aptitude for handling responsibility.
“In each of their fields, I look for what kind of experience
they have, and coupled with that experience, what their sense
of judgment is like and how they have exercised it over the
years,” Reardon says. “It’s one thing to suggest that you want
people with a certain amount of technical expertise — that
goes without saying. But equally as important is their sense of
judgment in that expertise and how much of an opportunity
have they had and how much responsibility have they had with
which to exercise that judgment experience. That is critical
because as all of us grow older and hopefully wiser, you want
to develop a bank of wisdom, and you get there by exercising
judgment.”
For example, one area in which Reardon believes many leaders struggle to make decisions is information technology.
Whether they pass on a golden opportunity because they don’t
fully understand its potential benefits or they make a blind
decision that comes back to burn them, Reardon says an overall lack of understanding on the part of leaders complicates the
decision-making process. As such, he considers himself lucky
to have an experienced and knowledgeable head of IT who is
trusted to make the appropriate decisions.
“I certainly don’t know what he knows about IT, and I never
will,” Reardon says. “But I trust him, and I understand him well
enough that I will bet on his judgmental experience, and when
you can trust somebody’s judgmental experience, it’s huge.”
Of course, having the right team members in place is only half
the battle. Reardon says the key to keeping them there is using
communication as a means of understanding the desires and
motivations of each individual. As part of TTX’s manager evaluation process, each manager has an annual meeting with every
one of his of her subordinates that focuses exclusively on discussing what that person’s desires and aspirations are.
“There’s no way you’re going to find out what motivates
somebody and how you’re going to retain them unless you at
least talk to them and find out,” Reardon says. “You really have
to figure out not only what you want out of somebody, but you
also have to figure out what makes this person tick. How do
they derive their satisfaction in life? What really turns them
on? Professionally? Culturally? Valuewise?”
Creating the atmosphere
Creating an atmosphere conducive to collaboration starts at
the top, and Reardon says an environment such as the one he’s
helped to create at TTX is based on a mutual respect in which
a leader’s respect for his subordinates is perhaps even more
important than theirs for him.
“We’ve all seen the boss that says, ‘That’s the dumbest thing
I’ve ever heard, you idiot,’” Reardon says. “That won’t get you
very much traction. The fear of disrespect, if you will, can
close off an awful lot of constructive thought. Conversely, creating the atmosphere where all ideas are welcome, when you
apply that notion to the fact that you’ve recruited some top-notch talent, that atmosphere is critical. When people see that,
you really begin to get a free flow of creative thinking, and that
is the single biggest atmospheric catalyst.”
Making an organization of individuals comfortable with
contributing its ideas and thoughts is sometimes a monumental task. Reardon says at TTX, by making sure to keep
plenty of white space on his calendar, utilizing an open-door
policy and routinely sitting in and offering his thoughts at
department meetings, he has, over time, created an informality of communication that he says has helped encourage constructive dialogue among several layers of the organization.
Additionally, each quarter Reardon hosts a lunch in the executive conference room attended by 12 members of the company, who are not his direct reports, during which the
employees are encouraged to discuss the pros and cons of
working at TTX. Reardon says the lunch is just one means he
uses to connect with the whole of the organization.
“It kind of helps me keep my finger on a pulse that I otherwise would not be able to reach,” Reardon says. “The only way
you can do that is to spend face time with people, whether it’s
our hourly associates or whether you’re out on the docks in
Portland or Seattle or whether you’re here at headquarters,
walking around, poking your head in people’s offices, asking
them about a project that you might already know all the
answers to, but it’s a forum to initiate dialogue, to simply spend
face time. People begin to open up more to you.
“You have to let people know that you want their ideas, and
that you’re not going to disrespect them by dismissing an idea
out of hand, even though it may not be the right idea. What they
need to understand is that you respect their experience and
their judgment and you may adopt it or you may not. If you
decide not to, they know you will provide them a thorough
understanding of why not. Similarly, if you do adopt it, you will
do so with the idea that you understand the wisdom of it.”
While collaboration certainly entails allowing members of a
team to contribute to an organization’s overall direction, in the
case of TTX, it also involves a leader who is prepared to delegate. In doing so, Reardon draws a distinction between granting responsibility and granting actual authority. Managers are
responsible for their respective departments, but they also
need to have the authority to make the necessary decisions
within their jurisdictions.
“You really need to let that department head know they’re the
captain of their own ship and not only are they entitled to
make those decisions, but they must make them,” Reardon
says. “It’s critical that CEOs let go. Otherwise you stifle the
very creativity you sought, unwittingly in most cases.”
While fostering collaboration at the top of an organizational
chart is one thing, Reardon adds that to truly tap the intellectual capital of an entire organization, decision-making must be
pushed down to all levels.
“One of my pet peeves about organizations is there is a culture that develops after a fashion that says, ‘Only at a certain
level are you capable of making decisions,’” Reardon says. “I
think all of us know there’s a certain level of fallacy in that.
You’ve got enthusiastic, properly ambitious minds, and they
thirst for responsibility.”
The obstacles to creating a collaborative organization are far
overshadowed by the potential rewards of doing so. Reardon
says the responsibility of a leader is to do his part by formulating a mission and trusting, with some oversight, that it will be
carried out.
“The role of a CEO is, with a lot of input, to set the course,
delegate responsibly and stay abreast of the developments but
disappear from the details,” Reardon says. “Let your best
minds do their jobs.”
HOW TO REACH: TTX Co., (312) 853-3223 or www.ttx.com