During his nine years as the NASA administrator, Daniel Goldin applied a management style his critics have called “pushy,” “impatient,” “aggressive,” and “predicated primarily on gut-wrenching change.” Although he had outspoken detractors, Goldin is credited with transforming NASA from a lumbering, risk-averse behemoth into a lean, fast, model government agency. The National Journal named him one of the 100 most influential people in government, citing his reputation among space watchers as a brilliant visionary who brought NASA back from the brink. Since his departure from the agency in the fall, Goldin has become a senior fellow at the Washington, D.C.—based Council on Competitiveness. In a recent conversation with HBR’s Gardiner Morse, Goldin discussed his controversial style and the lessons NASA’s turnaround holds for the private sector. At NASA you were famous for your abrasive style. How do you account for your successes, given how out of sync this is with the current emphasis on “emotionally intelligent” leadership? Leaders aren’t supposed to be anything except effective. And each situation calls for an appropriate tool from the management toolbox. NASA was bleeding at the time. We were reeling from massive failures. The Challenger had blown up. The Hubble was blind in orbit. The weather satellites weren’t working. The shuttle was plagued with mechanical problems. It would take off on schedule only 23 % of the time, and when it did everyone would hold their breath. Congress was threatening to cut major programs. When a patient is sick with cancer, you don’t give them an aspirin and hold their hand. You give them chemotherapy. Don’t mistake aggressive action for meanness. I was very focused on performance, on change. And aggressiveness is the tool I employed. I set the vision. I set the expectation. I tried to be emotionally intelligent—I don’t really like that term—and I did lots of skip-level sensing. I spent a lot of time going to each of our centers so I could understand what the employees were thinking. I set up teams of employees and managers to figure out how to get where we had to go. I knew I couldn’t force people to submit by using power. If you do that, you get a mutiny. But you had your dissenters. Oh, yes. It was war with the dissenters. I did pull some senior people aside and encourage them to leave. But I also made a commitment to do everything in my power to avoid forced layoffs. I went to a buyout system—offering early retirement packages and voluntary severance. I knew buyouts would take longer, but they would give employees the option of leaving if they were uncomfortable with me or with where the agency was going. I think that was a very important safety valve. We went down from 25,000 to 18,000 employees. What leadership mistakes did you make? Oh, I’ve made loads of mistakes. Maybe my most significant mistake was that I thought I could build confidence with the employees if I came in by myself. I didn’t bring any key people with me. But it caused a number of false starts. I came into a crisis situation and had to act quickly, but since I didn’t know the people and didn’t bring anyone along, it took longer to get on track. Your detractors criticized you for promoting chaos, but you’ve said that a certain “appearance of chaos” is good. Why is that? When I came to NASA, I asked contractors to explain why their multiyear contracts shouldn’t be canceled. I said that programs that didn’t meet certain threshold criteria would be canceled. And contracts were canceled. It was unheard of. Competition between upstart companies and established companies increased, for big contracts and small. I mixed things up. This caused a lot of stress. And so for a few years there was the appearance of chaos, but it wasn’t chaos. It was the unleashing of competition. And it was the competition of ideas that allowed us to triple the number of craft we were building, cut the average cost of building each spacecraft by two-thirds, and cut the cycle time by 40 % . I also decentralized the organization—and this was ten years ago, before the idea had completely penetrated even in the private sector. We had 4,200 people at headquarters micromanaging, so I transferred a good portion of the command and control out of headquarters and ultimately reduced its staff by 3,000. This horrified people because suddenly the field centers were accountable for performance. Maybe that created a sense of chaos for them, but it was absolutely essential to get people to focus on new goals. Your years at NASA were a time of massive innovation. How did you drive creative thinking? A lot of our programs were so big and expensive that there was this incredible fear of failure. So first I said, “What we’ll do is tolerate some acceptable level of failure. Succeeding ten times out of ten is not acceptable because it means you’re not pushing hard enough, and you’re setting mediocre goals. We’ll make failure acceptable by breaking programs into smaller pieces and increasing the number and diversity of programs.” That way, if there was a failure, we wouldn’t be losing a whole program. You know rip-free stockings? You have to set up systems so that when failure occurs it doesn’t propagate across the whole organization or disable an entire single-mission spacecraft. The space station is designed to tolerate small failures, not just by having numerically redundant systems—say, two inertial guidance units—but by having different types of inertial guidance units that can do the same job. So we designed in rip-free stockings, if you will, on the space station. The second thing I did was tell the employees that I wanted them to figure out how we were going to implement change. I set the “faster, better, cheaper,” vision, but they came up with the implementation approach. I set up two teams of employees. The blue team proposed an idea; the red team had to challenge the blue team’s assumptions. The teams came up with the new approach we implemented, and they came up with new programs like the Mars Rover, which got a lot of bang for the buck. The third thing I addressed was the blame game. It happens all the time: When there’s a failure, search for the people who failed and hold them up to public ridicule and destroy their desire to take risks. I established a policy that says, “If there’s no malice of forethought and no gross management incompetence, if a major failure occurred, I would take responsibility.” That freed people up to dream and take risks. NASA’s failures were pretty visible. What is the lesson for the private sector? The executive of the twenty-first century has to get comfortable dealing with the public and the media. There’s this reflex to spin and stonewall, but that approach only works temporarily. You have to go with the facts and communicate wholesale, not retail. What the American public wants is confidence in their corporate leaders. And confidence doesn’t come with spin control. It comes with doing the right thing.
