At Work Newswire

By D. Quinn Mills

One of the hardest choices a leader faces is when to compromise and when to stand firm. Making a mistake in this choice can destroy a leader’s effectiveness. But there is no simple method of making a correct choice. It’s a matter of judgment—and good leadership turns on how sound our judgment proves to be.

Mistakes in this realm are common. For example, throughout World War II, Adolf Hitler, the German dictator, refused to let his soldiers abandon positions even when they were threatened with destruction by attacking forces. He believed that only by standing firm against any retreat could he force his soldiers to fight. But the reality was that if his officers had been allowed to withdraw at critical times, and then counterattack, they could have avoided disastrous defeats. Hitler made a basic error of leadership—refusing to compromise with his own officers.

Some critics charge that our President, George W. Bush, is making an error in standing firm on his policy in Iraq, when they think he would do better to compromise with Congress and find a way out of the conflict, even if it means withdrawal and the perception of defeat. If they are right, and Bush has made an error in standing firm, then it will permanently affect history’s evaluation of his leadership. Supporters of the president’s policy point to Winston Churchill’s resolve during World War II, and Harry S Truman’s tough stance against Soviet aggression as examples where not compromising proved to be the correct response.

Mistakes about compromise or standing firm occur in business as well. When the personal computer was first becoming a major product, IBM’s sales of mainframe computers began to fall. The company’s vice president for sales explained to the company’s CEO that customers were turning to networks of mini- and personal-computers in preference to the more expensive and less flexible mainframes. The CEO refused to compromise with his sales vice president; held firm to his targets for the sale of mainframes; and fired the sales VP. The CEO’s adamant insistence on standing firm in his sales objectives lead to a huge financial loss for IBM and to the loss of the CEO’s job.

Leaders sometimes compromise when they should have stood firm. Political leaders often give in to people who urge them to one course of action, then give in to people who urge them to an opposite course of action, so that the political leader seems to be all compromise and no direction. Charges of this nature are being leveled in the current presidential campaign against several Republican candidates.

In business, Ford Motor Car Company’s CEO was urged to diversify the company’s product and brand line by acquiring brand name auto companies in Europe. The CEO had his doubts, but he compromised with the advocates of the diversification, and bought several companies—including Jaguar and Volvo. Ford spent a great deal of money trying to build the brands and failed. Today, the European brands are on the market, and Ford is trying to focus again on its core brand names.

A rule for compromise

Is there a general rule for a leader about when to compromise and when to stand firm? Possibly. A leader should stand firm when it is a matter of principle or of core beliefs. A leader should never compromise when there are questions of integrity or legitimacy involved. It is vital that a leader differentiates between those decisions which are significant and touch upon these factors, and those that do not.

Compromise for a leader is possible in the following situations:

1. When the issue isn’t crucial;
2. When there is something to be gained from letting others have a major influence on the decision;
3. When repairing an error of judgment or recognizing that conditions have changed.

There is a special temptation which leaders often confront which can be very dangerous—the temptation to stand firm even where it is not necessary (nothing crucial is at stake, and something is to be gained from compromise), in order to pose as firm and decisive.

When leaders do this—posturing as being firm, as “a strong leader”—it can end in disaster. Remaining firm when there is no good reason often leads a country or a firm into a mistaken situation that rapidly worsens. Usually, people trying to be leaders who make this error do so to avoid admitting an error in the original decision. They know they made a mistake, but don’t want to admit it, and so they persist in the error, not compromising, hoping that they will appear firm and decisive. But the original error compounds itself; things get worse; and soon the leader appears not firm but stubborn; not decisive but divorced from reality. Often the leader is forced to a compromise at the end, but then looks not accommodating and wise, but defeated and weak. It is the worst possible result for the leader.

There are times when it may be necessary to compromise even when the issue is crucial (albeit not involving principle or core values), but there is no alternative—that is, when nothing can be done without a compromise and something needs to be done. Leadership then means acknowledging the reality, and making the best of it for all those impacted by the change.

D. Quinn Mills, the Alfred J. Weatherhead Jr. Professor of Business Administration at Harvard Business School (emeritus), consults with major corporations in the U.S. and globally. He has written extensively on leadership, strategy, and management issues.

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Copyright © 2007 D. Quinn Mills

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