Tag Archives: management

Unlock the Potential of Everyone in Your Organization, One Decision at a Time

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THE DECISION MAKER

DO YOU TRULY MAKE THE TOUGH CALLS?

Coaches don’t play sports. When the whistle blows and the game begins, it’s not the coaches who run onto the field or the court, it’s the players that the coaches have chosen. In The Decision Maker, author Dennis Bakke returns to this metaphor a number of times: coaches choose the players. The theme of The Decision Maker is that bosses should not be making decisions in a company; they should be choosing the decision makers. The decisions themselves should be made by everybody else — including, and perhaps especially, the front-line employees. The Decision Maker is a business fable; Bakke uses the story of a midsize company recently acquired by two business partners — one of whom champions the decision-making revolution in the company — to illustrate the potential benefits and obstacles related to pushing decision-making down the organizational hierarchy.

Bosses Know Less

According to Bakke, benevolent paternalism is the kind of mindset that still defines most of today’s businesses. Bosses make the decisions, even though they are less informed than the people closer to the “action” — the people who are actually dealing with customers or making the product. Shouldn’t the workers on the assembly line be making assembly line decisions? Shouldn’t the techs that transform the ideas of the R&D researchers into prototypes be making decisions about how the prototypes are to be built?

In many companies, they are not making the decisions, and as a result, according to Bakke, they are disengaged, unmotivated, and just working to collect a paycheck and go home. Treat people like machines and they will act like machines, he writes.

In Bakke’s story, the former head of the company was a traditional, top-down control executive. Tom, the new co-owner, sees that he has acquired a company filled with uninspired employees. It’s not just a question of morale. As described by Bakke, the top-down command-and-control culture of the company shackles employees trying to do their jobs. For example, the story begins with an explosion on the manufacturing floor. No one was injured, not even the worker assigned to the machine that exploded; he was away from the machine because he was looking for his boss to get permission to shut the machine down. He knew the machine needed to be shut down, but he didn’t have the authority to make that decision.

For Tom, every person in the company is unique, a creative thinker, capable of learning and capable of taking on a challenge. Every person, in other words, is capable of making decisions. When Tom decrees that employees will be making the decisions that concern their work, the resistance from the managers is palpable. First, managers wonder what their jobs will become if they are not making the decisions. Tom replies that, just like coaches, their job is to choose the decision-makers — a serious decision based on the managers’ knowledge of the tasks at hand and the experience and professional attributes of their employees.

Managers are also concerned about the capabilities of employees who are not used to making decisions. These concerns seem to be borne out when a front-line employee decides to change suppliers, a move that leads to disastrous results. At this point in the story, Bakke introduces a key component of his decision-maker process: advice. Decision-makers must ask for advice from peers, bosses and employees below them in the hierarchy — anyone who has the experience and knowledge to help. It is, however, up to the decision-maker to make the final decision and to take full responsibility for that decision.

The former head of a Fortune 200 global power company and the founder of Imagine Schools, Bakke is not an academic theorist but a successful business leader who has implemented the decision-making program described in the fable. The PowerPoint presentation included at the end of this thought-provoking book summarizes the program succinctly and provides a simple guide for those who will have the vision (and courage) to follow Bakke’s lead.

The Underlying Logic of the Office

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THE ORG

THE OFFICE GOES UNDER THE MICROSCOPE

Bureaucracy that hampers productivity, outrageous salaries for those at the top, cutthroat office politics, endless meetings that everyone knows are useless — there must be a better way to get things done than through today’s dysfunctional organizations. Isn’t there?
The short answer, from Columbia Business School professor Ray Fisman and his co-author, Harvard Business Review Press editorial director Tim Sullivan, is: there isn’t. Of course not all organizations are perfectly designed and managed — no doubt, there is always room for improvement — but as Fisman and Sullivan demonstrate in their book The Org: The Underlying Logic of the Office, today’s organization is still the structural unit for our world. Yes, too much time is spent in meetings, and the politics of the workplace will always create roadblocks to success. But for Fisman and Sullivan, much of the frustration and concern that our organizations inspire are the result of give-and-take that is not only inherent but unavoidable in our economic system. Through scores of in-depth case studies of organizations ranging from the Baltimore Police Department to the island nation of Samoa, the authors explain why organizations are structured and managed as they are — in other words, the “underlying logic” to it all.

How Much Can the Org Do?

For instance, take the task of structuring the job so that employees are incentivized to be highly productive. Police departments, for example, might incentivize police officers by rewarding them based on number of arrests. Theoretically, this might seem logical, but on closer examination a number of issues arise. First, is it truly better to arrest 10 loiterers, or even car thieves, as opposed to one murderer?

Even more complex is the fact that the job of a police department is not to make arrests but to keep the city safe. Thus the measure of “success” a police department uses for its officers actually reflects a failure of the department’s mandate. Even more important, the chosen incentive in this case might actually discourage officers from doing their job — keeping the city safe — because the initiatives and work that could help to keep the city safe is not rewarded. This is a very real problem, as the authors found in Baltimore. The answer is that the “org” — as the authors call it — can plan, structure and impose only so much. At some point, the police officers themselves must recognize the job they have to do and must act accordingly. And this is exactly what happens, the authors write. After a period of “cowboy” policing — making lots of showy arrests — many cops settle into a routine of keeping the peace in which arrests are the means and not the end.

The bottom line is that structuring organizations based on high-powered incentives and rational economic principles might seem logical, but real life is different. The best organizations balance incentives with an acknowledgment of intrinsic motivation, which itself can be as high powered as any carrot — just ask any entrepreneur.

Guardians vs. Stars

Organizations do fail, and fail through their own fault. The subprime mortgage meltdown resulted from incentives that pushed loan officers to approve as many loans as possible, regardless of the risk of those loans. The problem, as the authors explain, is that these mortgage companies and banks did not have the guardians watching over the stars. Any organization needs to have stars swinging for the fences — but those stars are not going to worry about the risks; thus, the same organization needs to have guardians to ensure the quality of the quantity being brought in by the stars. The banks had no guardians ensuring the quality of the loans being approved, which was a recipe for disaster. The subprime mortgage experience explains, write the authors, “why we’ll always have oppressive bureaucrats, and free-thinking entrepreneurs oppressed by them. And that’s okay.”

The simple phrase “that’s okay” is the beating heart of this lucid, well-researched book. The organizations that we deal with — and their policies, structures and rules — will no doubt continue to frustrate us, but the fact is that despite the give-and-take, compromises and seeming unfairness, today’s organization is still the best vehicle to get things done. Organizations may not be perfect, but that’s okay.

Three Imperatives for Great Management

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BEING THE BOSS

Becoming a great leader and manager is a journey, and it’s not an easy one, write Linda A. Hill and Kent Lineback, authors of Being the Boss. To help new and experienced managers successfully achieve the journey to great leadership, Hill and Lineback present what they call the “three imperatives” of management and leadership: managing yourself, managing your network and managing your team.

Manage Yourself

There are, according to the authors, three approaches to managing. The first is to manage on the basis of authority — basically, the “because I said so” approach. In today’s work environment, this approach rarely produces compliance and certainly not commitment. Another approach is the “let’s be friends” approach, which can also be ineffective. Managers need to develop working relationships even with those they don’t like and they need to keep some distance with those they do like.

The third and most effective management approach, the authors write, is to build a relationship on a foundation of trust, which is based on two beliefs: people’s belief in the competence of the boss as a manager and people’s belief in the character of the boss as a person. Character is key. People want to know that their managers value them as people and have a strong sense of self. These are the traits exhibited by managers who successfully manage themselves.

Manage Your Network

The first of the authors’ three imperatives focuses on how to manage those under a leader’s formal control. The second imperative involves people that leaders need to work with who are not under their formal control — peers and bosses, for example. The stumbling block for many managers in this imperative is that they don’t like the “office politics” required to successfully build a network throughout the organization. The first step in managing your network is to accept what the authors call “the reality of the organization” — that there are conflicting needs and priorities that need to be worked out.

Manage Your Team

The first two imperatives concern interpersonal aspects of management. The focus in the section on managing your team, the authors write, is more on “impersonal systems through which you influence others.”

Specifically, managing your team involves: thinking about and planning the future; clarifying roles and purpose; and treating team members as individuals — interacting constructively with them, making a real effort to know them and working hard to develop them. Finally, managing the team involves the day-to-day management of employees for which the authors recommend an innovative “prep-do-review” approach: managers should think about what they’re going to do before they do anything; then they should act; this should be followed by a systematic review of what happened.

Hill is a Harvard Business School professor with extensive experience building leadership programs and courses at the university. Her co-author, Lineback, has 30 years of experience as a manager and executive. Their collaboration has produced an excellent manual on leadership that is clearly structured, comprehensive and practical.

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Take the Fear Out of Business Finances

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So you finally got that promotion and today is your first day attending the management meeting. As you sit down among your new peers a thick report is passed out filled with numbers. These are the monthly financial reports and as you look through them you’re completely lost. What does it all mean and am I going to be asked to comment on these numbers?

Don’t panic. There are simple ways to get up to speed with the basics of business finances. You could enroll in a business finance course but that would take too long. Or you could read the book No Fear Finance by Guy Fraser-Sampson.

Fraser-Sampson takes the fear out of understanding business financially concepts and reports. In a very clear and methodical way he goes through all the basic information needed to understand and use and understand financial reports and tools.

Early in his book Fraser-Sampson distinguishes between Financial Accounts and Management Accounts. Financial accounts are used to report about a company to outsiders like shareholders, while management accounts are used by management to make business decisions.

Other topics covered include:

  • Basic financial concepts such as the time value of money, and financial instruments including stocks, bonds and derivatives.
  • The main investment concepts like liquidity, volatility, active versus passive investing and different return measurements.
  • Key accounting matters like balance sheet and income statement analysis, working capital and solvency.
  • Company life cycle events including M&A, capital raising, insolvency.

If you would like to get a head start on understanding business finances, please join us for our next Soundview Live webinar, No Fear Finance. Guy Fraser-Sampson will explain basic financial concepts for business use, and will take questions from the audience. Now is a great time to get your burning questions answered in a low-pressure environment.

Is There Fear Within the Walls of Your Company?

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“A company’s worst enemy is not always the competition. Sometimes it’s the fear that lives within its own walls.”

This is a very ominous quote from the author of Breaking the Fear Barrier, Tom Rieger. As Senior Practice Expert for Gallup, Rieger draws on the company’s global research across a dozen countries spanning six continents to identify the “fear barrier” and to show how and why fear destroys companies.

Perhaps you’ve experience this in your own company. A person fears that they might lose power, control, parts of their department, etc…, so they put up barriers of bureaucracy to protect their area. These barriers then cause a slow-down in the processes of the company.

Rieger documents three types of barriers:

  • Parochialism: A tendency to force others to view the world from only one perspective or through a narrow filter, when local needs and goals are viewed as more important than broader objectives and outcomes.
  • Territorialism: Hoarding or micromanaging internal headcount, resources, or decision authority in an effort to maintain control.
  • Empire building: Attempts to assert control over people, functions, or resources in an effort to regain or enhance self-sufficiency.

As Rieger observes: “Each level of the pyramid is a defensive response, and each creates rampant bureaucracy — which in turn limits success, crushes employee engagement, and infuses a sense of futility across an organization.”

In our upcoming webinar with Tom Rieger, Breaking the Fear Barrier, he will offer a cohesive and groundbreaking process for breaking down each level of bureaucracy to remove the barriers. Then he will show that by proactively fostering courageous behavior among employees and keeping insidious “courage killers” at bay, leaders can root out fear in their organizations and establish a culture of confidence, engagement, and long-term success.

If fear and the barriers it produces are an issue in your organization, please join us on May 2nd to hear Rieger’s solutions and to ask your questions during the presentation.