Art Petty on Management

From Imperial Court to Learning Organization

Today’s post was stimulated by a great article in the July/August 2008 Harvard Business Review, The Competitive Imperative of Learning, where Professor Amy Edmonson of Harvard Business School outlines the differences between organizations that focus on execution as efficiency—doing things better and faster than your competition versus execution as learning—focusing on learning and adapting faster.

In brief, Professor Edmonson compares and contrasts the approaches used in the traditional industrial age model of motivation and performance evaluation processes versus those required for today’s knowledge-worker dominated organizations.  The approaches required for success in the two models are dramatically different.

In the Execution as Efficiency model, Professor Edmonson indicates that leaders provide answers, employees follow directions and optimal work processes are designed and set up in advance.  In the Execution as Learning model, leaders set direction and articulate the mission, employees discover the answers and work processes are highly fluid, adapting at the speed of organizational learning.

Practical Applications: A lot of Executive Talk, but...

When it comes to driving change, words and actions must match. Few organizations are immune to the massive forces constantly reshaping the world around us, and few organizations can afford to live solely by the Execution as Efficiency model.  We live and work in a world increasingly dominated by knowledge workers, and while one part of an organization may be dominated by an efficiency orientation, other areas, marketing, sales, research and development, must move towards a learning approach or face dire consequences in the marketplace. 

In my own experience working with organizations that have grown up with an emphasis on efficiency but are talking about the need to become more flexible and adaptable, it is often the people doing the talking that are serving as the barriers to change by failing to revamp outmoded systems and processes.

Five Barriers that Get In the Way of Developing a Learning Organization:

1. The Imperial CEO and Royal Executives: A class system that puts undue weight on the import of executives.  Instead of the executives serving the organization, it seems like the organization exists to serve the executives.
2. Strategy by Edict and Set According to the Calendar: Every year at about the same time, the organization stops and waits while the royal court sits behind closed doors working out the new organizational structure and lofty statements that provide the masses inspiration to work hard until they receive fresh inspiration next year.
3. Strategy by Default: “We have a strategy, and it’s to sell more,” is a commonly heard phrase in this tuned-out environment.   Another is, “Strategy is for the big boys, and we’re too small to worry about anything other than doing our jobs.”
4. People as Expenses: the words coming from the mouths of executives might be saying “People are our most important asset,” but the systems supporting the identification, development and retention of talent are saying, “People are our biggest cost.”
5. The Functional Structure: specialization works in some areas, but in general, the silo structure of many/most orientations is the greatest impediment to shared learning.  While the phrase, “we’re all in sales” is commonly shouted by salespeople frustrated with the lack of organizational support, the fact is that, “marketing is truly too important to be left to just the marketing department.” 

What to Do If Your Organization Needs to Learn:

• Take the royalty out of the royal court.  This culture shift has to start at the top—the non-CEO Chairman of the Board and the other independent board members have to step up and overthrow the caste system and monarchy that pervades so many executive environments.

• Recognize and act on strategy as a process that involves everyone.  (I’ve posted on this one seemingly a thousand times, so I’ll spare you the details and direct you to the Strategy category on this blog.)

• A robust execution process with plenty of accountability and constant evaluation of performance and consideration of lessons learned is the fastest way to pump up organizational learning.

• Make the identification, development and retention of talent the job of every manager or supervisor in the organization.  Challenge HR to create systems to support these activities and start living up to the notion that people are your greatest assets.

• Break down the walls by at least moving towards a strong matrix or a project environment for major initiatives.  Cease and desist with throwing initiatives over silo walls, and build a project culture with the charter to execute and to educate the organization on lessons learned.

The Bottom-Line for Now:

It’s time to quit talking about becoming a learning organization and start knocking down the time worn conventions, institutions and processes that stand in your organization's way.  In an ideal world, this change starts at the top with an insightful leader or leadership team that understand what it takes to move from an efficiency orientation to a learning focus.  In reality, a lot of this change will need to be driven by leaders in the middle that clearly see what is happening in the external environment as well as what it takes to win in that environment.  If necessary, let the royals executives posture and play while you go about the business of changing the business one initiative at a time.

Ironically, Mid-Level Managers May Save Your Business

Ever since terms like reengineering, right sizing and downsizing became part of the corporate lexicon; midlevel managers have been taking it on the chin.  This once populous class has been synergized and right-sized almost to extinction.  Those that remain often struggle with spans of control as wide as the Golden Gate Bridge and limited authority that is constantly challenged from above and below.  I find it just a bit ironic (and appropriate) that this much-abused class of leader may just hold the key to surviving and prospering in tough times.

In a great article in the July 7. 2008 Wall Street Journal, entitled: In Search of Growth Leaders, authors Carr, Liedtka, Rosen and Wiltbank offer the results of their multi-year study of the role that midlevel managers play in fueling organic growth.  Their conclusion: "most companies have managers who can turbo charge results.  The trick is finding—and nurturing—them.  Read the article for some great insights on finding and developing these critical midlevel leaders. (And read my post: Management By Jane: Leading Effectively from the Middle for some additional thoughts.)

The Power of Great Managers in the Middle:

• Appropriately trained and armed, midlevel managers are directly focusing on strategy execution—they lead the teams that do the work that drives performance. If your organization is failing to execute on strategic objectives, look to the middle, not to place blame, but to identify what you can do better to help your managers succeed.

• As the article authors highlight, a tremendous amount of innovation comes from the middle.  In my own experience, the managers that fuel innovation are the ones that are relentless about creating the right conditions for their associates to succeed.   Breaking down barriers and taking the heat for bending the rules are common and comfortable tasks of the innovative midlevel manager.

• The most important talent scouts and developers are often found in the middle of organizations.  The savvy manager recognizes the import of identifying and developing emerging leaders, competent role players and potentially brilliant individual contributors. While top management might want the organization to become good at this talent scouting and development, like strategy execution, the majority of the heavy lifting takes place in the middle.

Five Ideas to Strengthen Your Support and Success In the Middle:

1. Change your perspective on the midlevel management layer.  Instead of looking
at the organization chart and seeing cost to be minimized or taken out, look at this group as resources to enable strategy execution, fuel innovation and scout and develop talent.  Quit broadening spans of control to the point of ridiculousness, and begin setting goals around strategy, innovation and development, and suddenly the cost perspective starts melting away.

2. Involve midlevel managers in strategy formulation...not just in rubber-stamping the strategy formulated by executives.  Remember, the people in the middle likely understand your customers and your organization's capabilities at a much more detailed level than those of you with V's or C's in your title.

3. Create systems to help midlevel managers experiment with and implement new ideas.  Provide key managers and manager groups with executive sponsors charged with cutting through corporate clutter to help get things done.

4. Reward successes, provide visibility and learn from misfires.  Easy words to write and speak, but realizing this environment takes discipline. 

5. Recognize the fact that new classes of virtual leaders...Project Managers and Product Managers have emerged over the past two decades to replace the former middle level.  These critical positions often carry tremendous responsibility burdens with little real authority across functional boundaries.  If these positions exist in your organizations, strive to create the sponsors, systems and infrastructure to allow them to perform.

6. As an executive, get over yourself.  No one said that you are required to have all of the answers.  It's a sign of strength, not weakness if you are emotionally secure and intelligent enough to recognize that your strength comes from your ability to get the best from willing contributors. Take the time to invest in reinventing your leadership style.

The Bottom-Line for Now:

The article referenced above is must reading for every executive looking to solve the challenges of how to fuel organic growth.  Innovation doesn't occur on command, and while good accidents happen (e.g. think 3M and Post-Its), hope as we all know is a lousy strategy. 

I teach, train and support midlevel managers in all forms of organizations and by and large, I find them generally miserable about their tasks and their ability to positively impact their organization.  The majority of their frustration stems from working for leaders that succeed in stifling the conditions required for innovation and execution to flourish.  The opportunity is in the middle...not the problem.  For the source of the problem, take a long, hard look in the mirror. 

The Project Management Discipline of Strategy Execution

A number of months ago, I wrote about the benefit of applying professional project management practices to help improve strategy execution (Struggling with Strategy? Think Project Management).  While many view strategy as something that is transformational (and it often is), the fact is that an organization moves from where it is today to where it has decided to go one project at a time...like a football team marching down the field on a long-drive.

In the June, 2008 Harvard Business Review, in an article entitled The Secrets to Successful Strategy Execution, Gary Neilson, Karla Martin and Elizabeth Powers add considerably to the body of knowledge on strategy execution, with this excellent article, backed by a considerable amount of research gained in surveys of over 1,000 organizations.  Their findings seem to support their thesis that: "enterprises fail at execution because they go straight to structural reorganization and neglect the most powerful drivers of effectiveness—decision rights and information flows."

A few key findings covered in the article:

• Employees at three out of five companies rated their organization weak at execution.  (Asked: Are Important strategic and operational decisions quickly translated into action?)

• The number one rated trait (by a landslide) that makes organizations effective at implementing strategy: Everyone has a good idea of the decisions and actions for which one is responsible.

• Of the top eight traits (17 were identified), five were tied to having effective and timely information flows and three were related to decision rights.

• Structure as an effective trait for driving strategy execution did not hit the  list until number 13, with a relatively low strength index rating. 

Fascinating. It's important to see a large body of research dedicated to the execution issue and it is a great learning experience to see how valuable information flows and decision rights are to successful strategy execution.

Additional Thoughts on Strategy Execution:

Structural changes, properly implemented at the right time and for the right reasons can go a long way towards addressing and improving the information flow, decision rights and collaboration issues that are so critical to strategy execution.  Don't write off structure as a powerful tool in strategy execution,  however as the authors highlight, don't jump to structure as the solution.  It's one part of many pieces to the solution.

Back to my strategy execution as project management thesis, the best performing project teams are characterized by clear structure, unambiguous roles, detailed communication plans and clear accountability for decisions and results.  Top notch Project Managers ride herd on these issues, seeking out points of confusion or gaps in information flows and fixing them in process.  

The fact that the authors are able to cite as a research finding that 3 out of 5 surveyed managers believe that their organizations do not quickly translate strategic priorities into action tells me that most of those organizations have not adopted a robust project management discipline for strategy execution. And while strategy is arguably more complicated than creating a new product or constructing a building, it is very possible to structure and manage your execution program using the same approaches. 

The bottom-line (for now):

Strategy execution is where value is created.  The best plans are worthless unless they are backed by a group of people that understand their roles and accountabilities and that have the information they need when they need for rapid decision-making.  Execution never takes place in a straight line and without setbacks.  In fact, the setbacks are powerful learning experiences that a good team will leverage as it adapts and responds to internal and external factors.

A large part of the solution in my opinion is treating execution like a high-order program comprised of a series of projects to be managed.  Ask a good Project Manager how to successfully pull of an execution program and I suspect they won't need to interview 1,000 companies. 

Preventing Product Launch Failure: Watch Out for the Pitfalls!

G. Michael Maddock and Raphael Viton writing in the Innovation Engine column at  BusinessWeek online, offer a sobering look at the Ten Reasons Your Next Launch Will Fail.   From the propensity of companies to create solutions for unknown problems (Science Run Amok) to the recurring theme of teams convincing themselves that they can't miss (Death by Consensus), this insightful and witty column offers some priceless guidance for marketers, product and project managers and executives everywhere. 

Having been on the winning side of some great launches and the losing side of a few spectacular failures in the B2B tech world, I can relate to the problems that Michael and Raphael describe all too well.  Some thoughts based on my own experience:

• The Swiss Army Knife or Requirements Run Amok Product: This one finds erstwhile Product Managers (usually unseasoned) working hard to pack every possible feature into an offering in the naive believe that this Swiss Army Knife approach will create a stronger offering.  They did not understand their buyer's problems/challenges sufficiently, and they over-specified to compensate.

• The Offering Just Slightly Ahead of Its Time:  Yep, I made this mistake.  As Maxwell Smart would say, "Missed it by that much."  Followed by, "Sorry about that Chief."  By now, drinks were supposed to be poured by a Drink Tower robot in Quick Service Restaurants everywhere, saving a veritable fortune in labor and improving time efficiency.  My Drink Tower interface from the Point-Of-Sale system burned a lot of time and money.  It was really cool in the one site that actually tested a drink tower in 1996.  I hear that there are a few more sites now.

• The "We'll Release No Product Before It's Time, Except This One" Launch: This launch failure usually involves a management team that built their budget around a new product launch, only to see schedule delays cut into their nicely developed sales dream.  Pressured by the urgency of the situation and the upcoming Board meeting, a watered-down version of the product is launched and you can guess what ensues. 

• The Product that Won't Be Born: OK, maybe this is a cheap shot, but it's my column, and I get to offer at least one gripe to a development team or two that couldn't get its act together.  It's not always the Product Manager's fault!

The bottom-line for now:

Like the forward pass in football, there are a lot of things that can go wrong and only one thing that can go right: the pass is caught and the product launch is successful.   Successfully launching products requires the organization to be Tuned In to their buyers.  Solving a vexing problem in a unique way for a distinct group is a great starting point.  Creating the culture, systems and approaches requisite for a successful launch requires committed, focused leadership at all levels of the organization.  Establishing a high level of competence in product launch is table stakes for success in a world where opportunities are fleeting and  and product life cycles shrinking daily. 

Hmmm, now, if 5,000 locations save .2 people due to the automatic drink tower, the savings will be worth millions.  I wonder if it's time to re-launch that puppy?  I suspect that Michael and Raphael would advise against it.

In Search of the High Performance Project Team

I recently conducted a leadership workshop for a group of technical professionals at an industry conference, and as always, I walked away from the session with a couple of insights gained from the input of the participants.  One that surprised me was that after talking about characteristics of high performance project teams, I asked for a show of hands from anyone that had been a member of this type of team.  Only 5 out of 58 raised their hands.  Even discounting for the people that don't tend to respond to "showing of hands" requests, anything even close to the 10% range here seems abysmal.

Planning to Recognize Failure-The Project Manager's Guide to Preventing Project Calamity

Every Project Manager with a few years of experience under his or her belt can likely recall at least one example of a major project that lived on long after the plug should have been pulled and the project canceled.  The best (or worst) examples are the ego-driven initiatives of top executives that can't let go for fear of losing face by admitting defeat. 

More than a few organizations have been taken to or pushed over the edge by these self-anointed visionaries bent on changing their corporate world with some grand project.  Once invested, they cannot let go, and if left unchecked, the results can be nothing short of disastrous for the organization.   

Too Many Projects Chasing Too Few Resources in the Strategy-Starved Organization

Whether you are operating at the strategic level or working in product development, I would bet my life-starting morning cup of coffee (a great Mexican roast from Conscious Cup in Crystal Lake, IL) that your organization faces more opportunities than it can possibly deliver.  The extreme of this situation is Project Gridlock, a phenomena that I've observed in mature technology firms where the demand to support and enhance legacy offerings collide with the need to modernize or create new products to grow the business and stay-ahead of competitors.

When Projects Go Horribly Wrong: A Great Example

The folks that designed Denver International Airport's infamous baggage handling system can breathe a bit easier now.  While the much publicized start-up disasters at Denver have faded into the past, apparently the project management lessons learned did not transfer across the pond to the teams responsible for the new Terminal 5 at London's Heathrow Airport.

Coping Strategies for the Project Manager Facing an Executive Mandate on Schedule

One of the most common challenges for Project Managers and Engineering teams in new product development organizations is balancing the executive "time to market" mandate with good project estimation and risk analysis techniques.  Many a project has misfired after a CEO or top management group has boldly proclaimed to corporate stakeholders that, "Product X will be to market by (insert your aggressive date here).   

Read Any Good Cultures Lately? Honing an Essential Career Skill.

Every organization has a distinct culture defined by its history, norms, values, and behaviors, and every team in an organization develops its own subculture.  Learning to read a culture and adapt your style to fit (or at least complement it) is essential to success regardless of your level or role.  It's also something that can be honed as a skill through increased awareness and consistent application of a few basic approaches.