Interesting Reading about Change

On my way to Paris I stopped at the bookstore inside the San Francisco International Airport and bought several magazines including the June 2010 issue of the Harvard Business Review.

What caught my eye was the cover page lead MANAGING CHANGE - How to Do It, When to Do It. Ther authors Marcia Blenko, Michael Mankins, and Paul Rogers are members of the Global Organization Practice at the Bain & Company, a well known and reputable consultancy.

I approached the article with much skepticism. After all, what else can be said about change? What captured my interest is the conclusion of the article: "Ultimately, a company's value is just the sum of the decisions it makes and executes." Hmm! Never thought about it that way.

The article goes on to review important lessons learned from reorganizations in 57 companies between 2000 and 2006. After much fanfare, most, if not all, such changes fall flat. The authors believe that these failure are rooted in a profound misunderstanding about the link between structure and performance. They conclude that performance is not determined solely by the nature, scale, and disposition of resources, however important that may be. A company's structure will produce better results if and only if it improves the organization's ability to make and execute key decisions better and faster than competitors.

The article advances a six-step approach to creating a decision-driven reorganization:

1. Identify your organization's key decisions.

2. Determine where in the organization those decisions should be made.

3. Organize the macrostructure around sources of value.

4. Figure out what level of authority decison makers need.

5. Align other elements of the organizational system, such as incentives, information flow, and processes, with those related to decision making.

6. Help managers develop the skills to make and execute decisions quickly and well.

Decision effectiveness and financial results correletated at the 95% confidence level or higher for every country, industry, and company size. The study pointed out that it is the quality of decision-making rather than the structure that should be the primary focus of the reorganization. No strong correlation was found between structure and performance.

To really appreciate the lessons learned from this article, it is important to read it in its entirety.

As I was reading the article my mind began to remind me of a classical failure that I recently observed in a multi-national company. The decision making process was totally misaligned with the intent of the structural transformation the organization embarked on.

For example, a senior officer at the corporate level was given the authority to approve major decisions regarding strategies and direction while the operating executives were made responsible for the success of the strategies they did not create, did not own, or fully understood.

The incentive system was not fully aligned with the change goals. As implementers realized that the likelihood to achieve their targets were beyond their reach, motivation began to decline and job pressure skyrocket.

The notion that the strategy had worked elsewhere (although many disagreed with this claim) and therefore should work everywhere was not only false but foolhardy. It ignored the important notion that no two organizations are alike and that there is no one best way. Size, history, national culture, market dynamics, and skill set matter a lot.

A proper decision audit would have revealed that the course of action was not just what important activities needed centralization to achieve economies of scale, but how these decisions were reached and by whom. Sad, but the entire intervention was a monumental fiasco, albeit well intentioned. The intervention was successful but the patient died.

How about you? Have you seen successful reorganizations? How would you say they might have differed from the unsuccessful ones? Lessons learned? For me, beware of of the one best way... it worked elsewhere so it should work here ... trust me, it will work.

Mentoring -- No Greater Calling

As a young professional I benefitted from the unsolicited mentoring from several people. Without their help and support, surely my career would have been less successful.

I remember with fondness two such mentors. They both had a tremendous impact on my career choices and advancement.

1. Buck Wong -- He was production manager in a high tech start-up where I worked part-time while attending San Jose State University. Buck called me in his office one day and asked me what I was studying and interested in majoring. I told him that I was unsure as to my major, unsure of my capabilities and emerging opportunities. The next day he called me back in and gave me an introductory texbook to industrial relations. He asked me to read it. I perused the book in my spare time but I was not really excited about the subject. Perhaps, I saw it outside my reach. When Buck queried me about the book, I showed lukewarm interest. He immediately pounced on it. He said to me: "Let me introduce you to professor Pascucci at your university. I know him well. We both attended Stanford's MBA program." He proceeded to tell me that I would be good in this field -- an action-oriented person in a field populated by beaurocrats, he said. Thereafter, I changed my major to Industrial Relations and Personnel Management (precursor to Human Resouces Management). This is how I prepared myself for this part of my professional career. The first meeting took place in 1961.

2. Bob Morris -- He was the General Manager of the Software Test Division of a large computer company. I was by then the HR & Administration Manager serving three divisions, including Bob's. One day he popped into my office and said to me that he had hired professor Patrick Williams to do a team building session for his team and that he wanted me to be part of the session. I had no idea what this session was all about and I questioned the need to spend the money to do it. Bob insisted that we could benefit a lot by examining the way we worked and improve our problem solving skills. The session was an eye opener to me. I was not knowledgeable about how to handle process issues having been reared on the task side primarily. I immediately saw the value of paying attention to both the task and the process used to achieve results. The session was motivating and illuminating at the same time. The following Monday Bob left a package on my desk. When I opened I saw six booklets -- the original Addison Wesley series on Organization Development. Bob also attached a note. In it, he asked me to read the books. He also indicated that I would be good in this emerging field. The seminal meeting took place in 1970.

Buck got me going in the HR field. I joined General Telephone (now Verizon) as an HR representative a couple years after graduation. In 1972 the large computer company where I was working now as Group HR Consultant promoted me to Manager of Corporate Organization Development -- a brand-new function and a pioneer initiative. During my active years, I found myself alternating between the two functions. OD made me more effective as an HR professional, and HR knowledge gave me the context to be more effective as an OD specialist.

I am grateful to Buck and Bob for steering me in this direction. Indeed, both areas fit my interest and abilities. I had a marvelous career as a result -- full of challenges, accomplishments and lessons learned. Many others along the way mentored me. I would be remiss not to mention their names ... Ted Lusk, Tom Linklater, Bill Rowe, Pat Williams, Bob Bartizal ... Their unselfish gift made the difference.

From my own side, I have tried to give back by mentoring others. I get a lot of vicarious satisfaction when I see people whom I have mentored blossom and become successful in their chosen field. How gratifying to see people whose life you have touched succeed!

How about you? Do you go out of your way to mentor others? Have you benefitted from mentoring? How?

Management Derailment

My good friend and colleague Joe Black sent me a copy of a revised chapter on Management Derailment soon to be published in the American Psychological Association Handbook of Industrial and Organizational Psychology, Sheldon Zedeck (Editor). The chapter is authored by Joyce and Robert Hogan, experienced personality assessment specialists.

When managers fail, the cost to the organization has been estimated between $ 500,000 and $ 1,000,000. Beside the dollar cost, managerial incompetence has a major impact on people because of the misery that it dispenses.

What is competency?

Multiple leadership competency studies have identified four broad categories of competency:

1. Intrapersonal skills: self-awareness and self-control, emotional maturity, integrity

2. Interpersonal skills: social skill, empathy, and relationship development

3. Business skills: ability to plan, organize, monitor, and use resources

4. Leadership skills: ability to build and maintain a team, lead through others

More folks derail because they lack emotional and/or social intelligence than business or leadership skills. This is a personal statement based on many years of observation.

A recent example: A reorganization of a multinational company following a restructuring of operations. The executives who were not retained fell into two categories: (1) their jobs were combined with others or (2) their job was taken over by someone else.

In the latter case, it was obvious that the principal reason was their poor or lack of effective intrapersonal or interpersonal behavior. These people had low respect from their staff and colleagues. They were seen as incapable of working effectively with others or their personal integrity was questionable. This pattern often repeats itself in reorganizations where familiar relationships are disrupted and "chickens come home to roost", so to speak.

Back to the chapter ...

The authors go on to explore in some detail the dark side of personality. These are the factors that define the personality profile:

1. Excitable. When feeling mistreated, these people erupt in emotional displays that might involve yelling, throwing things, and slamming doors. They can be quite volatile and unpredictable. They have difficulty building and maintaining a team. At their best, they have a great capacity for empathy. At their worst, they require a lot of personal attention and reassurance,and they can be very hard to please.

2. Skeptical. These people expect to be betrayed, cheated, or deceived in some way. When detected, they might respond with physical violence, accusations, or litigation, actions announcing that they are ready to defend themselves. They can be insightful about organizational politics and the motives of counter players. They can also be unable to compromise or trust others.

3. Cautious. Highly cautious people fear being criticized, blamed, or possibly disgraced. As a result, they avoid making mistakes that might cause public embarassment. To avoid criticism, they follow the rules and precedents, resist innovation, and cling to past successes. They are prudent and careful about evaluating risk; they rarely make rash or ill-advised moves. They can also resist change, stall, drag their feet, and become undecisive.

4. Reserved. Highly reserved people are seen as indifferent to the expectations of others, especially their staff. As a results, they seem formal, aloof, introverted, and lacking in social insight. They seem more interested in data and things that people. They communicate poorly. They are tough in the face of adversity. They can also be tactless, imperceptive, and gauche.

5. Leisurely. These people seem overly pleasant and cooperative, but in private they expect to be mistreated and unappreciated. They are stubborn and independent, cynical about the talents and intentions of others -- especially superiors -- and insist on maintaining their own pace. They can be very good interpersonally, on one hand, and on the other, they are peevish and stubborn, prefering to stick to their own agenda and to not support others'.

6. Arrogant. These folks expect to be admired, praised, indulged, and obeyed. They expect to be successful at everything they do, they believe their own propaganda, and when frustrated they can explode in narcissitic rage. At their best, they are energetic, charismatic, leader-like, and willing to take the initiative. They are fearless and entrepreneurial. On the negative side, they can be arrogant, demanding, self-deceived, and pompous. Because of their aspirational character, they attract followers. But they also can take credit for more success than warranted. They are slow in admitting their errors and slow to learn from experience. Ultimately, they can alienate their subordinates and colleagues.

7. Mischievous. These types expect others to find them charming, clever, even irresitable. As a result, they are willing to ask for help from others without incurring obligations. They see themselves as bullet-proof. They like to live on the edge. They are seen as being bright, witty, and engaging. They see others as utilities to be exploited. At their best, they are confident and daring that others find attractive and intriguing. At their worst, they are impulsive, reckless, faithless, exploitative, and manipulative.

8. Colorful. Colorful people expect others to find them attractive and entertaining, and the natural focus of attention. They are good at being the center of attention by making dramatic entrances and exits. They perform well in interviews. But they are impulsive and unpredictable. While they might be good in sales, they can be poor managers because they are unfocused, distractible, over-committed, and always in search of the spotlight. At their best, they are bright, entertaining, flirtatious, and the life of the party. At their worst, they will not listen or plan.

9. Imaginative. These people see the world in different and often interesting ways, and they thrive on entertaining others with their unusual perceptions and insights. They are alert to new ways of seeing, thinking, and expressing themselves, and they enjoy the reactions they elicit in others. They seem bright, insightful, playful, and innovative, but also as eccentric, odd, and flighty. At their best, they can be visionary, creative, and insightful. At their worst, they can be self-absorbed, insensitive to feedback, and indifferent to the social and political consequences of their egocentric focus. They are poor communicators, and they can leave people confused regarding their directions or intentions.

10. Diligent. These folks expect their performance to be rigorously evaluated. They have high standards of performance for themselves and others. They are hard working, careful, and planful. They live by the rules and expect others to do the same. They can be irritated when others do not follow the same rules. At their best, these people are good role models who uphold the highest standards of professionalism. They are popular with their bosses because they are so reliable. On the other side, they can be fuzzy, particular, nit-picking micro-managers who alienate their staff.

11. Dutiful. These people think that others expect them to behave well. They are concerned with being accepted, being liked, and getting along, especially with authority figures. They are alert to signs of disappoval and look for ways to ingratiate themselves, to be of service, to demonstrate fealty and loyalty to the organization. At their best, they are polite, and eager to please. They seldom criticise others and they do not make enemies. But at their worst, they have problems making decisions, taking the initiative, or taking stands. Therefore, they can drift to the detriment of their staff.

These 11 items can be broken down into two categories. The first five identify characteristics of people who move away from people, and the last six as characteristics of people who move toward people. There is no one best category. They all have strengths and weaknesses. Some perhaps are more appropriate than others in special circumstances.

None of us are either one or the other, I believe. We are rather a combination of these characteristics. Surely some of the characteristics are stronger and more dominant while others are weaker and less discernable.

So where do you fit in? What is your exposure to derailment? What can you do to mitigate your risks?