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The Unexpected Outcome of a Trip to Peru

This book is not about the Incas, but without the Incas, it would never have been written. It’s a book about the rise and fall of organizations and the key factors influencing their successes and failures. It’s about good leadership, honest and perceptive self-management, inspiring visions, high-quality people selection, trustworthy values, credible corporate governance, and organizational focus for long-term survival. It’s also about the mistakes, many of them self-inflicted, that often occur in each of these areas and cause organizations, large and small, to stumble and fall. This book will help you to lead your organization better; it will help you manage yourself better, as well as understand your boss and your colleagues better. Oh, and it will make you think, smile, and maybe even shudder, sometimes all at the same time. But above all, it will help prevent you from falling victim to the illusion of invincibility.

How It All Began…

I don’t often go to Peru on business. In fact, it’s happened just once, but that one trip was enough to light the fire under me to write this book.

When one of my clients—a Swiss company—decided to appoint a new general manager for their subsidiary in Peru, the SVP of international business operations called my office in Germany. “Paul,” the director said. “Would you be Rosa’s coach as she prepares to take over the new position? You’d be her sparring partner, if you will.” Then came the unexpected part of the offer: while most of the coaching would take place either in Zürich or in my office near Cologne, he suggested that I travel to Peru toward the end of the process to run a workshop for Rosa and her new leadership team.

One evening, about three weeks later, I found myself sitting around a campfire with two friends who’d both lived and worked in Latin America for a number of years. I told them about my recent phone call, and their reaction was highly enthusiastic.

“Peru!” the first said. “Wow! It’s one of my favorite countries in the world. Oh, the food, the culture, the people—the Incas!”

“You’ve got to see this, you’ve got see that, you must go here, you must go there,” the other exclaimed. “And, Paul,” he continued, “above all, what you absolutely must not do is spend three days in the Lima Hilton and then come straight home again!”

“Hold your horses, guys,” I said. “I don’t speak a word of Spanish, and I’m not one for adventuresome holidays. And if I did take a trip around Peru, I would never consider doing it on my own. I’d want to do it with my wife, or with some good friends, or—”

“We’ll come with you!” they interrupted.

And that was that. On a sunny November afternoon in Lima, six months later, I walked out of the hotel after the workshop and a mini-bus was waiting for me across the road. The man behind the wheel was a local—one of our guides. In the passenger seats were six tourists with familiar, smiling faces, including the two friends from the campfire. And one of them was Andreas Krebs.

We thought we’d properly researched the highly developed Inca culture of the fifteenth and sixteenth centuries. We were wrong: In the breath-taking landscape at 3,500 meters above sea level, what we gathered from our Peruvian guides made us pause to think much further. In Tipón, located about eighteen miles northeast of Cuzco, and assumed to be a former agricultural research center of the Incas, we learned more about how, in just a hundred years, the Incas created an empire stretching almost five thousand kilometers along the Andes, from what is now Ecuador in the north to present-day Chile in the south. They efficiently organized and held together a kingdom that was home to some two hundred ethnic groups; they created surpluses through clever agricultural techniques, established food storage facilities and cared for their sick and for families who had lost their main provider, all at a time when epidemics and famine were raging in Europe. We discovered how, before integrating a tribe or nation into their empire, they would first make an offer of a “friendly takeover” and only use their considerable military force if the offer was rejected. And we learned how they consistently endeavored to integrate the conquered people into their empire and maintain peace thereafter by resettling people and developing the local infrastructure.

Originally, the trip was intended to give us a few days to relax from our day-to-day work as managers, supervisory board members, investors, and coaches. Yet we suddenly found ourselves talking about management—Inca management. How could it be that the Incas, who had neither the wheel nor a system of writing, let alone modern communication technology, had built and dominated a vast empire, while many present-day mergers fail under far more favorable conditions? How did the Incas manage to establish an accepted governing elite that lasted for many decades, while modern senior executives often have to defend themselves against allegations of egomania and arrogance? Why did so many groups and communities choose to follow the “children of the sun,” while the attempts of today’s business leaders to steer company conglomerates on a common course often end in failure?

Of course, the methods of a rigidly hierarchical society of the early modern period cannot simply be transferred directly to the present day. But our heated debates made one thing clear: the Incas offer us a mirror and a chance to reflect on the behaviors and methods business executives use today. What at first glance appears so distant and alien can actually hit home. The Inca elite faced challenges similar to those of today’s managers: formulating clear goals, persuading others to embrace change and innovation in a tough environment, unifying different groups, and implementing plans according to rigorous standards. When we look beyond many of the current management trends and buzzwords, be it “digitization,” “diversity,” or “disruption,” one question remains unchanged: What is essential for leaders at all levels seeking to ensure their companies or organizations can achieve sustainable success? Successful management and leadership really depend on the answers to this question—and this book provides such answers. Having served as the initial spark of inspiration, the Incas provide a backdrop throughout the book as we draw on our own business experiences and on what our interviewees—senior managers from international companies, successful family businesses, start-ups, consulting companies, public sector organizations, and NGOs—shared with us along the way (see “Our Interview Partners”). We would like to thank all of them for their trust and openness, and we have chosen to anonymize some of the more personal or controversial stories.

This book is in no way intended to be a starry-eyed romanticizing of the Incas’ story. Alongside impressive expansion, their reign was also characterized by deportations, often of entire peoples and villages, child sacrifices, and the rigid regimentation of individuals, who were not free to choose their place of residence or their occupation. Furthermore, after almost a century of uninterrupted success, the Incas suffered an equally monumental downfall: in 1532, the Spanish conqueror Francisco Pizarro defeated the Incas’ twelve-thousand-strong army with fewer than two hundred soldiers and captured their ruler (the “Inca”) Atahualpa. Within a few years, the Inca Empire had disintegrated, although the last Inca king, by that time a puppet of the Spanish conquistadors, was not executed until 1572. For all the resourcefulness, efficiency, and consistency the Incas had shown in the domination of their empire, they seemed helpless in the face of their new adversary, which leads us to ask whether all such outstanding successes are intrinsically doomed to fail at some point—whether every great triumph carries within it the first small steps toward failure.

Here, too, the parallel with the present is immediately apparent. Every manager and executive knows the names of the “global players,” the seemingly unassailable companies, that have experienced dramatic decline or, in some cases, been obliterated completely: Kodak, Nokia, AOL, Pan Am, Arthur Andersen, and many more. If we take the annual Forbes list of the world’s five hundred most profitable companies as our benchmark, it quickly becomes clear that scarcely a single organization has been able to maintain its place in the gilded ranks of the world’s ten most financially successful companies over a longer period of time. Perhaps it is precisely the illusion of invincibility that predestines their often rapid fall from grace. For executives and managers, this means remaining constantly vigilant, particularly in times of “guaranteed” success, searching for weaknesses and constantly working to challenge and develop both themselves and the company. Otherwise, the danger is that they may suffer the same fate as a certain German executive whose pompous attempts to create a “Global, Inc.” out of the Daimler Group marked the beginning of the end of his career and cost the company and its shareholders billions of dollars.

One more thing: While we have carefully researched the information about the Incas in this book and have talked with a number of experts in Peru, the United States, and Germany, we neither intend nor are able to provide more than just an overview of this fascinating culture. There are many other books that do this job much better than we can, and we have listed some of these in the bibliography. Our view of the Incas is a selective view through the eyes of managers working within large organizations. The Incas added an unexpected layer of meaning and insight to our view of the business world, and the lessons we learned surpassed in many ways the dozens of leadership seminars and workshops—with their assorted PowerPoint presentations—that we had both witnessed over the years. Our hope is that this book succeeds in conveying at least part of the fascination of this change of perspective and that our insights, analyses, and recommendations provide sufficient information and entertainment to encourage you to read the book from start to finish. After all, there are more than enough boring management books out there!

Andreas Krebs and Paul Williams,

Langenfeld, Germany

www.inca-inc.com