The New Normal

What's challenging about the New Normal isn't so much that it's strange or brand-new. It's that so many of the people running companies were trained in the late '90s. The analogy I would use is that of the military in World War I. Between the American Civil War and World War I, the technology of armaments progressed rapidly, and military strategy didn't move at all. In Europe, almost no lessons were learned from the American Civil War. The result: Generals on both sides persisted with outmoded strategies in the face of mass destruction. The incredible tragedy of World War I is that nobody figured it out. Right up until 1940, the French insisted that the Maginot Line would protect them from Germany. And during the course of World War II, various armies made progress in direct proportion to how quickly they incorporated new technology.

By the same token, what made people successful in the late '90s is not particularly relevant right now. The late '90s were all about people who looked good in the spotlight. I call it the CNBC CEO. Now it's about people who get things done. The question isn't, What's your vision for the future? The question is, What are you doing today? You still need a vision, but that is no substitute for a realistic plan. Without a doubt, it's harder now, and you get paid a lot less. But the battlefield promotions go to people who are willing to take the world as it is and make the best of it.

That means two things. First, the management team has got to want to invest in itself. Leaders have to be buyers, not sellers. In the first two years of running Silver Lake -- 1999 and 2000 -- almost every meeting that we had was with executives from companies whose stocks had gone from $100 to $2. They had figured out in their heads that if they could get the stock to $4 they could keep the airplane and the house in Hawaii. And they would spend the entire meeting trying to figure out how to sell the business to us for $4. Obviously, we were more interested in leaders such as Steve Luczo of Seagate, who not only was interested in owning a piece of the business, but who was also committed to pursuing an exciting strategy to grow the business, a strategy that had nothing to do with the priorities of the public markets.

Second, we need more leaders who aren't afraid to act in the midst of uncertainty. The problem with the New Normal is that there's no obvious one-size-fits-all strategy. And in the absence of an obvious strategy, most people would like to change as few things as possible. People are paralyzed when it comes to setting meaningful strategy. That's why flexibility and responsiveness are the most critical skills of the New Normal leader.

Take Eric Schmidt, CEO of Google. Eric has totally modified his behavior in order to play a new game. When you have been as successful as Eric has been, you're entitled to think that you know a thing or two. He could have been forgiven if he had shown up at Google and said, Hey, you young whippersnappers, let me show you how it's done. Instead, he listened. He watched. He figured out what the business was. He figured out which parts of what he did well would make it better and which parts of what the original team did were going to make him better. That's the essence of management. For all of Google's success, Eric is less visible today than he was a few years ago. He's spending time on the business, not in the spotlight.

Polly LaBarre (plabarre@fastcompany.com) is a Fast Company senior editor based in New York. Her most recent cover story was "How to Lead a Rich Life" (March 2003). Learn more about Roger McNamee's ventures on the Web (www.slpartners.com and www.integralcapital.com).