Michael Critelli’s brand of thoughtful and quietly inspir-ing leadership is reshaping the 80-something year-old mail and document management company Pitney Bowes. And his change management approach is gaining increasing media attention and plaudits. Critelli joined the company in 1979 and became CEO in 1996.
The spin-off of the Pitney Bowes’ office systems business, series of strategic acquisitions and the company’s first integrated marketing campaign have raised eyebrows in the corporate world but Critelli is unphased. The transformation is, it seems, working.
You lead company in relatively unfashionable industry and mature market. What are the challenges?
I would take issue with us being in mature market. We were in mature market and had we not set out to reshape it that would still have been an accurate characterisation. The communications marketplaces we participate in, both mail and document management, are very large markets. We believe that the parts we can address with our competencies would be worth about $500 billion. They are going through massive regulatory, technological and competitive change. Wherever there is massive change there is an opportunity for growth. Customers want help navigating their way through change.
You emphasise the role of values in your organisation. Most major companies have list of values but are they meaningful and practical, or just more PR?
Certain values are critical to our brand and our success in the marketplace. One of our brand attributes is that we rank highly on being trustworthy and reliable. Worldwide we handle more than $30 billion, probably closer to $40 billion, of other people’s money. We even own bank in the United States so having the attribute that we are honest, trustworthy and reliable is not only nice thing to have from commercial success standpoint but it is critical to our value proposition.
The other attribute which has served us well is that we have always valued the opinion of our employees. We have always tried to create work environment in which employees of different gender, origins, ages and points of view can be successful and can tell senior management what it needs to hear.
And our sense of mission goes beyond making money. People need to believe they are doing well by doing good. Employees need to feel proud of the quality of their work and of the mission to which their work is contributing. We are also known, justifiably I think, as company which gives value back to the community. Our community activity is integral to the company’s brand.
You emphasise research and development and innovation but that is something normally associated with Silicon Valley and high technology.
There are different ways to be inventive. You can invent physical product which is completely new, but you can also invent new market, or find innovative ways for technologies to work together which permit activities to be done in new ways.
Our innovation comes from studying problems and figuring out where there are opportunities as opposed to being enamoured with the technology itself. lot of the people in Silicon Valley are inventing tools rather than applications. We are an applications inventor for specific set of marketplaces.
How long can you be effective as CEO over sustained period?
Ten to 13 years for our size company is optimal. If I was running General Electric then 20 years may be optimal. You keep the succession pipeline fresh. One of the risks of staying in the job for 20 years is that talented people who are little younger and aspire to my job will leave. If they can have reasonable tenure, I can keep them engaged and have stronger team behind me. There is benefit to having an orderly succession process and not staying until the board of directors forces you to leave. Beyond certain length of time you get to believe that you can’t be replaced so it is best to leave when you are still on top and still fresh.
A friend of mine told me that you spent the first three years in the job trying to get acclimatised. During the next five or six years you are change agent, putting in place your programmes and vision for the company. In the last four years you are focused on succession planning ensuring the talent is there for the next generation. It has worked out that way for me. Between 2001 and 2005 or 2006 is my sweet spot to be change agent. But even today I am actively working on the succession process.
How do you create talent pool?
The most important thing to do in any succession process is to figure out what the world might look like in five to 10 years. Then consider what kinds of skills and competencies that world will require. From there you use variety of tools and techniques to make people ready and test whether they will have those skills and competencies.
Obviously at this senior level, it is important that executives get exposure to areas outside their direct responsibilities. They need external experiences to develop skills and competencies. We change people’s job accountabilities and give them more scope and wherever I can I work with them to give them coaching and advice. We provide them with 360-degree feedback supplemented with coaching.
We frequently interact with the board. What is different today from the process by which I was selected is that boards are more involved in the selection process. They want to get to know the candidates much earlier. We create variety of mechanisms so that the next generation of executives can interact with the board. I also work in partnership with the board to help them assess me and assess the talent which reports to me.
What do you think are your key competencies as CEO?
I am change agent. Why I am the way I am I don’t know, but I have always approached problems in different way. Then I ask, why isn’t it this way?
I have knack of seeing the world differently. I relentlessly try to move toward the things which make that (different) world reality. I started out as trial lawyer and I handled wide range of cases. I had to learn complex subjects quickly and to understand what the experts told me. I learned not to be intimidated by experts and specialists. I tell them that I must comprehend what they are saying and convey it in simple language. If I can’t understand them they are probably not thinking clearly.
As trial lawyer I had limited windows of time to get the attention of judges with very limited patience. They would make us do quick pitches. I learned how to do that and I learned how to force people to think clearly, simply and to explain things that way.
The other thing I bring to business is sense of thinking about it in terms of economics rather than accounting. I know accounting but lot of people confuse accounting profits with economic profits. I tend to look at what makes economic sense.
There are two other characteristics which have helped me. One is I have very good understanding of the value of time and speed. Having charged for my time as an attorney, I intuitively convert time to money and make economic decisions which take into account the money value of time.
I am also driven by results as opposed to worrying which budget or cost centre is affected. Tom Peters talks about professional services mindset where you assemble team to get job done and then they move on. He uses the example of the film industry. I have always thought that way. Some people tend to get too fixated on their status in the organisation and the way the organisation is currently structured.
How do you divide your time?
About five percent of my time is spent on board and corporate governance matters. The next 25-30 percent is spent in meetings – individually with people who work with me, staff meetings and lot of one-on-ones. I have around 150 of those year with people who don’t work directly for me but are from all levels of the organisation. I like to get directly to the source of information.
I spend another five to 10
