The Agenda

#7 - Prof. Dr. Rolf Watter - Better done than perfect

November 03, 2021 SHERPANY
#7 - Prof. Dr. Rolf Watter - Better done than perfect
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The Agenda
#7 - Prof. Dr. Rolf Watter - Better done than perfect
Nov 03, 2021

On expanding one’s horizons through experiences: Good leaders know that a job is better done than perfect

The Agenda podcast series uncovers the path leaders take from challenge to decision. In this podcast, former Chairman of PostFinance and chairman and member of several other boards, Prof. Dr. Rolf Watter speaks about doing things better rather than perfect. For more podcasts, stay connected at 

The Agenda is brought to you by Sherpany #Leading Together

Thank you for listening! Visit us at or follow us on LinkedIn for board, board committee, and executive meetings solutions.

Show Notes Transcript

On expanding one’s horizons through experiences: Good leaders know that a job is better done than perfect

The Agenda podcast series uncovers the path leaders take from challenge to decision. In this podcast, former Chairman of PostFinance and chairman and member of several other boards, Prof. Dr. Rolf Watter speaks about doing things better rather than perfect. For more podcasts, stay connected at 

The Agenda is brought to you by Sherpany #Leading Together

Thank you for listening! Visit us at or follow us on LinkedIn for board, board committee, and executive meetings solutions.

Nisha Pillai 00:00:06

Wherever we look, our world is facing a huge range of unprecedented challenges. So if you were a leader right now, how would you navigate your way through this? How do you make decisions in the teeth of so much uncertainty? How are you going to reconnect your people and rebuild your team so that they're fit to face the future? And what does that even mean to be a leader in such an increasingly challenging world?

These and other questions I've been putting into top business leaders from across Europe, and I've had some surprisingly candid responses. So why don't you join me, Nisha Pillai, for the latest episode brought to you by Sherpany of The Agenda.

My guest today is convinced that making a decision, any decision, a good decision early beats a perfect decision taken too late. Why is that? Well, let me introduce you now to Professor Dr. Rolf Watter. He is one of Europe's leading M&A practitioners, a partner at the Swiss law firm Baer & Karrer, and has won a garland of awards for his work over the years. He has been chairman of Post Finance, a Swiss retail bank, of CEVA, a logistics company, and of Noble Biocare, a dental implant producer, to just mention a few.

So let's say a big, warm welcome. Good to have you with us on The Agenda.

Prof. Dr. Rolf Watter 00:01:37

Absolutely. Thank you.

Nisha Pillai 00:01:41

So it seems the decision making is in your DNA because it really matters to you. I read somewhere you've been involved in more than 5000 decisions at board level, is that so?

Prof. Dr. Rolf Watter 00:01:52

Well, that's probably just a back of the envelope calculation, you know. I guess in a normal board any year, you probably take between 50 and 100 decisions, and only 10 percent of those decisions are either important or controversial or both of them.

Not every decision that is controversial is important, and not every important decision is controversial. But I would say yes.

Nisha Pillai 00:02:19

OK, so you know what you're talking about when it comes to decisions. You told me when we last spoke that it's better to take a decision early, even if it's imperfect, rather than wait to make the perfect decision. What was that about?

Prof. Dr. Rolf Watter 00:02:34

You know, I mean, in any decision situation, you basically need to have a set of facts in front of you, which, which in reality are hardly ever really clear. And in my experience, at least, you know, many people have a tendency to say, we need more facts, we need to explore this, we need to dig deeper before making a decision.

But in my experience, at least, it always has proven better to take a decision, even though the facts or the basis of the decision is not certain. And typically, you know, when you wait the week two or even a month or two until everything is clear at the best, you know, you might have missed quite a bit in whatever you're doing.

And that's why it is really my firm belief that you need to take the risk, to take decisions based on uncertain facts, even though that decision might be less perfect than the decision you take two or three months later based on a much clearer set of rules, based on a much clearer analysis.

Nisha Pillai 00:03:46

Well, sounds like you've been in this situation personally, Rolf. Do you want to tell us a bit more what might have been the trigger for this kind of feeling of discomfort by the board and a CEO, even in a slightly unclear situation?

Prof. Dr. Rolf Watter 00:03:59

I mean, there are many. Maybe I use the first one, which might sound a bit strange, but might illustrate the point. I recall one situation I was a board member and we had few doubts about the CEO. I specifically recall a board dinner that we had with him. He treated the staff very poorly or very arrogantly in a way. And at this...

Nisha Pillai 00:04:33

I'm going to interrupt you for a minute, when did this happen? Where did this happen? Where  the CEO treated the staff badly?

Prof. Dr. Rolf Watter 00:04:38

It was in a restaurant.

Nisha Pillai 00:04:40

Oh, OK, OK. Not in the business context, that's interesting, OK.

Prof. Dr. Rolf Watter 00:04:45

Totally, it was a board dinner after the board meeting. I just again, it might not be the most perfect example but still, I think it illustrates the point that at least in me triggered the question whether he had the right personality, whether he would treat his internal people the same way he did this restaurant staff.

And all this came together to form a lot of uneasiness about the CEO. In that situation, we probably, with hindsight, waited too long. I believe enough facts were on the table. We should have taken the decision rather than wait longer.

Nisha Pillai 00:05:26

That's a very interesting observation. It's difficult as a board member, isn't it, when you've got imperfect knowledge and don't have intimate involvement with the business to voice your discomfort with maybe some big strategic plan or even a small decision, isn't it? It's difficult to be the dissenting voice?

Prof. Dr. Rolf Watter 00:05:46

As a non-executive board member it often is indeed. The fact that the management, which will typically be supporting the plan because you typically speak about the plan of management, they of course know 10 times more than you do about the business. And so indeed it is  challenging, and very often you actually risk to make a fool out of yourself as a board member, because you simply do not have the knowledge level that management has.

If you want to create a positive feedback type of culture in the board, it's then sometimes preferable if you as a board member, examples you might elsewhere in a totally different industry, in a different environment, and you might then sort of take  a position or voice your concern, saying, you know, I might not understand all the details here, but in this business, I have seen, you know, with a similar plan went wrong for reasons A, B, C. Why do you think this is not a problem in your plan?

Or at least that's an approach which I have found in the past to work much better than if you take the risk of saying A, B and C is wrong, because typically management will tell you why you are wrong, and the ABC alright.

Nisha Pillai 00:07:14

So I'd like to ask you about a real example. You are chairman of the board at CEVA, the Swiss logistics company, which has struggled with profitability and with its basic operations. What has been your role as chair in working with the management to address the underlying issues?

Prof. Dr. Rolf Watter 00:07:34

I think in every case where profitability is an issue, you at the end, of course, need a plan supported by management, who basically shows you a way to either decrease cost or to increase sales, and the role of a chairman basically is to first work with management on establishing such a plan, pointing out two areas where the plan might not be ambitious enough, and then basically bringing this plan together with management to the entire board where other elements will surface.

Maybe one board member has the ability to charge from a customer side where the price increases are possible. Somebody else might have a view on whether cutting down costs and closing down an operation is the right thing to do.

So in the board, you then basically need to bring all these views to the table and, hopefully, redefine this plan or adjust the plan that management has presented, but still in a way which then helps management to implement this plan.

Nisha Pillai 00:08:50

I'd like to move on to talk to you about M&A, after all, that is the area in which you made your name and you've been involved in so many deals. When merging two companies, what is it that makes one deal successful, but the other not? Because so many, I think 50 percent of deals are said to lead to value destruction. What are the necessary ingredients for success?

Prof. Dr. Rolf Watter 00:09:15

You probably can distinguish, I mean, they're probably two big problem factors. The one is in choosing the merger partner that might be a good or a bad decision. You only know afterwards typically. But at least as important is the implementation phase. I

n many transactions many people believe once a transaction is announced, it's over. The reality is that the real work only starts, and it's in that phase that I think most errors are committed.

Nisha Pillai 00:09:50

So give me an example. Has it got anything to do with leadership and culture, the softer side of business?

Prof. Dr. Rolf Watter 00:09:58

I believe in order to have a good integration, you basically need to make it very clear who is in charge of the combined entity afterwards. I recall a situation where two very strong CEOs each of them headed a business, and the solution in the merger was to put one as the future chairman and the other one as the CEO.

And this clearly did not work out because it was not possible to successfully integrate because company A who maybe had then the chairman in place, all the employees continue to look towards the chairman. Company B with the CEO, they still continued basically as the CEO told them. So if it's not clear to the entire organisation of the combined organisation on who really is in charge, integration will, by necessity, almost be delayed.

Nisha Pillai 00:11:04

What do you see as the particular challenges in delivering successful global mergers, Rolf?

Prof. Dr. Rolf Watter 00:11:11

You know, I think by far the biggest one is the cultural differences. Cultural differences are by necessity much bigger if you are in a cross-border context than if you're in a national one.

Nisha Pillai 00:11:28

How do people, how do people work around that? How do they bring different national cultures together? Some are successful, some are not. What's the secret ingredient?

Prof. Dr. Rolf Watter 00:11:40

There are a number of factors. The first one, of course, is whether the two companies involved also have operations in the country of the other one. Then you actually have to find a real integration, and that's probably more difficult even.

The other situation is where company A purchases Company B and and has no presence in the country of Company B. Then, it's more about bringing the systems and all sorts of systems in that company in line with what company A's doing.  So that's much less problematic, but also much less profitable than a merger where you actually integrate the two cultures.

Nisha Pillai 00:12:27

What what advice do you give when you're in the heat of a deal? You know, the blood is up, you're in a chase. What advice do you give to the CEOs who are your clients?

Prof. Dr. Rolf Watter 00:12:45

OK, I think one very important thing, which is repeated very often, of course, is you should not fall in love with the target that you see in front of you. Always consider, does it really improve compared to the status quo, considering all the possible improvements you can make with your own business? That's, I believe, overall the most important advice.

Nisha Pillai 00:13:13

That is fascinating, and do they listen to you?

Prof. Dr. Rolf Watter 00:13:18

Certainly not everybody. But I believe the quality of deals overall has improved because everybody, it's the leadership team in each company, but it's also the advisers have become much more aware of the dangers of a merger.

And I also believe that the high rate of unsuccessful transactions probably comes down, I mean, we always hear the 50 percent I would actually guess that if you do an analysis over the last five years, the rate of unsuccessful transactions has decreased.

Nisha Pillai 00:14:03

Let's hope so, Rolf. I want to talk to you about toxic leadership. We still see many narcissists, to be blunt, in positions of power.

But we're also seeing a C-change in the way in which employees and stakeholders put up with that. They won't put up with toxic business cultures as they did before. So where do you think that is going? How do you think that's changing the nature of leadership?

Prof. Dr. Rolf Watter 00:14:31

I personally believe that a leader acting as part of the team is probably much more important nowadays than this was the case 15 or 20 years ago. And I also believe that it is important, for instance, for a non-executive board to make sure that the CEO does not take all decisions basically himself because I always felt it was very, very risky to listen to the CEO alone.

That's maybe an important factor because, again, this toxic lead to shape is a much bigger risk if you have only one person on the other side. If you have 5 or 10, the toxicity, so to speak, is less of an issue because not everybody will be toxic to say in the same area.

Nisha Pillai 00:15:26

It's an interesting point. What are your views on diversity? It's something that increasingly boards and large organisations are under pressure to deliver and reflect on society more widely. Do you think that it improves decision making to have a more diverse composition of boards and senior management?

Prof. Dr. Rolf Watter 00:15:49

Certainly, I think that's totally indisputable that this leads to better decisions, but it's very important. Diversity is not only gender diversity. Diversity means coming from different cultural backgrounds, different geographical backgrounds, maybe different interest groups.

So you need to have somebody in a board, for instance, who can take the customer's view. You need to have somebody who  knows how to supply, and create the supply chain works. You need to have somebody who has a good handle on employee relationships. It's this the type of diversity that is very important in my view.

Nisha Pillai 00:16:32

And what's your view on socioeconomic diversity, Rolf?

Increasingly, we find boards and organisations are becoming more diverse in terms of ethnic, geographical, gender diversity. But they're not really drawing from people beyond that elite talent pool who go to the top universities.

Do we need to bring in people who have a different, more gritty perspective on life?

Prof. Dr. Rolf Watter 00:16:57

I think that's a very important question and an interesting topic. My personal experience in this area comes from the board. It has not been easy, my experience to really bring together the different views in a fruitful manner.

That's maybe because people were not accustomed to it, yet, because they played only a certain role, and I think that's true for both the board member with the elite school background, but it's also true for maybe the factory worker.

It's very hard for people, for everybody to basically bridge this gap. So my answer to your question will be, yes, probably important, but very, very difficult to achieve and I think there's a very, very far way to go.

Nisha Pillai 00:17:53

Interesting. Rolf, our podcast series is all about leaders on leadership. Is there a final thought that you want to leave our listeners with?

Prof. Dr. Rolf Watter 00:18:03

Yeah, let me maybe finish by giving advice to younger colleagues who would like to do similar things in their life. I believe in order to be a good leader, it's incredibly important to have as broad a background and as broad an experience base as you possibly can.

So in my view, the most important thing to do is being as broad as possible. That was easy for me being a lawyer because you see many situations automatically depending on your client base.

But it's also important if you're in business, do not stay in one place, do many, many different things, do sports, play music. That's as important as spending 20 hours a day in the office.

Nisha Pillai 00:19:11

It's been a pleasure having you with us on The Agenda. Thank you so much.

Prof. Dr. Rolf Watter 00:19:15

Great speaking to you. Thank you very much.