Crafting a Conversation that Matters
January 11, 2008
After more than a decade of implementing the process and researching its consequences,we have identified several overriding lessons that we believe are relevant in any organizationwide conversation, whether or not leaders use our particular process. To wit:
A conversation about strategy needs to move back and forth between advocacy and inquiry. Most failures in organizations start when top management advocates a new direction and begins to develop programs for change without finding out what influential people in other parts of the organization think of the new focus. They thereby set themselves up to be blindsided by concerns that emerge much later. A smaller number of well-intentioned top managers make the opposite mistake. They do not advocate at all. Instead, in the name of participation and involvement, they depend entirely on inquiry – assembling a large group of managers and asking them to define a direction. The result is often widespread frustration. Managers and employees look to leaders to articulate a point of view about where the business is going, a point of view to which they can respond. Leaders need to advocate, then inquire, and repeat as needed.
The conversation has to be about the issues that matter most. To energize the organization, the conversation must be focused on the most important issues facing the organization – the company’s strengths and the obstacles to performance. It’s all too easy for senior managers to become swamped in the operational details of managing a business.What gets crowded out are tough and honest conversations about the fundamental issues that will determine long-term success. Do we have a distinctive business strategy that key managers believe in? Do we have the capabilities to execute that strategy? Is our leadership effective?
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Posted by Maximillian | Filed Under Insight
How to have an honest conversation about your business strategy
January 8, 2008
Despite widespread rhetoric about the need for organizational agility, an astonishing number of businesses stay stuck in neutral when they need to implement a new strategy.
Consider the situation that Lynne Camp faced in July 2000. Camp, the vice president and general manager of Agilent Technologies’ Systems Generation and Delivery Unit (SGDU), was charged with creating a single global company from a set of fragmented businesses in Asia, Europe, and the United States. To gain control over product decisions being made by the regional teams she had inherited, Camp and her senior team had originally adopted a functional organization structure. This enabled them to exit many marginal, local businesses and focus on the opportunities that were most promising from a global perspective. It also allowed them to introduce more efficient shared processes.
Despite these strengths of the new structure, problems began to emerge. The functional departments didn’t give the new businesses the attention they needed. The staffs of the regional field organizations were in a funk; they thought their customer perspective was being overlooked. Conflict between the functions, the businesses, and the field organizations was growing. The senior team was slow to make decisions, and no one took responsibility for the performance of the developing businesses.
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All Systems Go
January 5, 2008
Once these three gears are aligned and locked together, IT organizations and systems tend to deliver results rapidly– in many cases within six months. Yet despite the obvious benefits of these gears, some businesspeople may ask themselves,“Do we really have to do all of this ourselves? Can’t we simply outsource to firms that already know how to do this stuff? And wouldn’t outsourcing be a cheaper alternative in the long run?”
The answer to all these questions is yes and no. Over time, fewer and fewer CIOs will run their own networks and data centers, and much development may be augmented by partners. However, the “gears” become even more critical when you bring outsourcing and offshoring into the picture, because management complexity rises. You can’t abdicate the leadership and vision for these critical functions. And when you have a number of long-term contracts with various suppliers, the long-term plan must be extremely well articulated (Gear 1). When you work with a number of vendors that have their own tools and methodologies, it’s critical to orchestrate an overarching common framework under which everyone can work productively (Gear 2). It’s also much easier to build a highperformance culture when you own the human resources (Gear 3). In operating a multi-company workforce, it takes extraordinary leadership to create the esprit de corp required for high performance.
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Posted by Maximillian | Filed Under Insight
A High-Performance IT Culture
January 2, 2008
There’s no reason why most companies can’t develop a long-term IT road map tied to corporate goals. There’s also no reason that given sufficient discipline and resources, most can’t develop a unifying IT platform. But without a high-performance IT organization in place – one that looks very different from those found in most companies– a messy IT business will persist.
For years, corporations have treated IT people differently – a holdover from “glass house” data processing culture of 30 years ago. Treating IT as if it were a separate corporate entity sets up a vicious cycle. Allowed to work in their own tribes, IT folks feel less affiliation with the company than they do with their own projects. Like the soldiers building the bridge on the River Kwai, they grow so isolated that they forget what the war is about.
By contrast, the people in a high-performance IT organization don’t feel different from other corporate citizens; in fact, they are business-savvy leaders in their own right. They operate according to the same corporate values as everyone else and are measured by the same tough performance standards.
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Posted by Maximillian | Filed Under Insight
A Unifying Platfor
December 30, 2007
Most IT organizations are amazingly complex and have individual initiatives that are like independent countries, each with its own business applications, technologies, culture, data definitions, and orientation. Project costs soar because individual teams are isolated rather than harnessed together, and few teams reuse each other’s components – a condition exacerbated by a plethora of consultants and competitive technologies. And when a company is runnin hundreds of heterogeneous hardware and software systems, costs run rampant.
Consider the cost of such complexity at Delta Air Lines. In 1997, Delta’s fleet consisted of 600 airplanes and a rainbow of models, ranging from 727s, 737s, 757s, to 767s, from MD 80s and 90s to L1011s. (By contrast, Southwest Airlines operates only one kind of airplane.) Each plane carried different instrumentation from different eras; as a result, the company needed to train pilots and crew members to operate the different models. Keeping track of aircraft, people, parts inventory, qualified mechanics, handling equipment, and catering carts all added to the structural cost of the airline. Delta’s new CEO,Leo Mullin, and his executive team understood that if they reduced the number of plane types they operated, they could lower annual costs by hundreds of millions of dollars.
What the executives didn’t understand was that they had an even worse problem in their IT organization. The company was running more than 30 major IT platforms, with 60 million lines of code, none of which were integrated with each other. Each platform required approxi approximately 100 IT support specialists to keep the systems up and running. That arrangement cost the company about $700 million per year in capital and operating expenses. The problem within IT made the air fleet look like a model of simplicity.Running the airline was nearly impossible. Gate changes by the tower systems were not received in time by the people who needed them: the crews, caterers, reservation agents, ticket counter agents, mechanics, baggage handlers, and customers. The gate-change data were locked inside individual and often conflicting systems.
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Posted by Maximillian | Filed Under Insight
A Long-Term IT Plan
December 27, 2007
Because the rate of technological change is so rapid, and the job tenure of CIOs generally brief, most people see IT through the narrow lens of short-term, silver-bullet solutions. Heaven knows, vendors want you to believe that their important new technologies will blow away what has come before. You can’t blame a salesperson for trying to sell, or CIOs for having a queasy buy-or-lose feeling, but this attitude is precisely the opposite of the one companies should be taking. We would argue that because the winds of change buffet IT more than any other area of the organization, IT benefits most from a long-term, disciplined, strategic view, and a square focus on achieving the company’s most fundamental goals.
For example, Frito-Lay’s strategic goal has always been to make,move, and sell tasty, fresh snack foods as rapidly and efficiently as possible. That goal hasn’t changed since the 1930s, when founder Herman Lay ran his business from his Atlanta kitchen and delivery truck. He bought and cooked the potatoes. He delivered the chips to stores. He collected the money and knew all his customers. He balanced the books and did his own quality assurance. Herman Lay knew how to conduct the perfect “sense and respond”e-business before such a thing ever existed, for he held real-time customer, accounting, and inventory information all in one place – his head.
After years of spectacular growth, the company grew more and more distracted from this simple business model. By the early 1980s, the company’s sales force had swelled to 10,000, and information grew harder and harder to manage. The company’s old batch-based data processing systems were all driven by paper forms that took 12 weeks to print and distribute to the sales force. All sales transactions were recorded by hand; reams of disparate data were transferred to the company’s mainframe computers. Much was lost in the process of setting up a dozen different functional organizations and a variety of databases, none of which communicated with each other.
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Posted by Maximillian | Filed Under Insight
Getting IT Right
December 23, 2007
by Charlie S. Feld and Donna B. Stoddard
Of all the members of the executive committee, the CIO is the least understood–mostly because his profession is still so young. Over the centuries, the fields of manufacturing, finance, sales, marketing, and engineering have evolved into a set of commonly understood practices, with established vocabularies and operating principles comprehended by every member of the senior team. By contrast, the field of information technology – born only 40 years ago with the advent of the IBM 360 in 1964 – is prepubescent.
This generation gap means that, in most organizations, the corporate parent – caught in the linguistic chasm between tech-speak and business-speak – has no idea what its youngest child is up to. Management too often shrugs its shoulders, hands the kid a fat allowance, and looks the other way. Later on, the company finds it’s paid an outrageous price for the latest technological fad. Instead of addressing the problem, many companies just kick the kid out of the house.
The result in many major corporations is that IT is an expensive mess.Orders are lost.Customers call help desks that aren’t helpful. Tracking systems don’t track. Indeed, the average business fritters away 20% of its corporate IT budget on purchases that fail to achieve their objectives, according to Gartner Research. This adds up to approximately $500 billion wasted worldwide.
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Posted by Maximillian | Filed Under Insight
You and Me Against the World, Sucker
December 20, 2007
Insulators and reflectors may lack the self-knowledge to serve the CEO well, but they are not unethical. The same cannot be said of our third confidant type, the usurper. Usurpers are dangerous not only to the CEO but also to the organization as a whole. They are sociopaths who should be shown the door as soon as possible. It’s important, though, to do this in a way that saves face for the exploited CEO,who may, like Rasputin’s czar, come crashing down along with his dangerous confidant.
Usurpers are deliberately scheming and ambitious. Whether at work or in their personal lives, usurpers only last long enough in relationships to get their needs met. When they feel that people are no longer gratifying their desires, usurpers will abruptly end the relationship. Usurpers clearly treat others badly, and they are frequently self-destructive as well. Not surprisingly, they often have long histories of impulsivity, as well as substance abuse or illegal behavior. And although women do act as usurpers, these extremes of behavior are more commonly associated with males. The majority of usurping confidants I have observed have been men.
Unlike the insulator, the successful usurper does not want to empower anyone else: He wants the power for himself.Quite often, the usurper actually aspires to be the CEO. One of the best literary examples of a usurper is Shakespeare’s Iago, who masterfully manipulated Othello to kill Othello’s own beloved Desdemona.As Shakespeare understood so well, leaders often fall prey to these wicked confidants because the usurper is usually a brilliant observer and, therefore, manipulator of the CEO’s personality. Usurpers have an uncanny ability to find a leader’s Achilles’ heel and to exploit it ruthlessly. In clinical terms, usurpers show varying degrees of sociopathic behavior, which – while not commonplace – certainly occurs in business and in society at large. Of course, to make it up to an organization’s highest levels, usurping confidants must also be talented, productive, and charismatic.When they are, their bad behavior can go unnoticed for quite a while, so long as they have their boss’s protection.
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Posted by Maximillian | Filed Under Insight
You Need Me, and Don’t Forget It!
December 17, 2007
While the reflector inadvertently joins with the CEO in creating a shared, distorted view of reality, the insulator tries to serve as a mediator between an ill-suited CEO and his organization. CEOs who need insulators tend to be abrasive or abusive leaders. These arrogant leaders often deny the negative impact of their personality on those around them. They thoughtlessly push away their best people, make impulsive business decisions, alienate large constituencies within the company, and poison morale. These leaders quickly find themselves at odds with their subordinates, senior executives, and boards because of their lack of emotional intelligence. And whether they are quietly off-putting or openly hostile, these leaders rarely feel concerned about, or able to, change their interpersonal style.
To compensate, these abrasive CEOs seek insulators, people whom they believe can translate their poorly communicated ideas into language their organizations can understand. They need people willing to intercede when they make self-destructive moves. Like the mother of a child abused by his father, the insulator is constantly apologizing to the organization on the CEO’s behalf: “He didn’t mean it.” The insulator is also much like the enabler – to borrow the language of Alcoholics Anonymous– who makes excuses for the alcoholic.
Insulators have some special characteristics. Many have passive personalities and need to be rescuers.Women in senior management positions are certainly not all insulators, but, for reasons that still have not been sufficiently researched, most insulators turn out to be women. And although they typically harbor no ambitions to be CEOs themselves, insulators crave control over both the leader and the organization. That contrasts with reflectors, who unconsciously try to control leaders by pleasing them. Thus, while insulators can be quite manipulative, they position their behavior to appear as though they are doing an altruistic service for their bosses and companies.
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Posted by Maximillian | Filed Under Insight
Mirror,Mirror on the Wall
December 14, 2007
CEOs are narcissistic – if they weren’t, they wouldn’t be leaders. Moreover, without that quality, they couldn’t grow their business or provide the organization with the vision it needs. In my experience, CEOs with the best confidant relationships have a healthy dose of narcissism, and their confidants provide positive and negative feedback, they bolster CEOs’ flagging spirits, and they encourage CEOs to achieve balance and creativity.
But some CEOs constantly need to be told wonderful things about themselves. Typically, these leaders are both grandiose and extremely vulnerable to slights, and they often have a hard time hearing bad news or facing harsh realities.They surround themselves with yes-men who are unwilling to tell them the truth; these leaders also tend to have failed marriages, trophy wives, or extramarital affairs with women who feed their egos. Some narcissistic CEOs, such as Richard Scrushy of HealthSouth or Dennis Kozlowski of Tyco, turn their organizations into elaborate monuments to themselves. Unfortunately, these leaders are also prone to selecting confidants who cater to their fragile self-esteem. These are the reflecting confidants.
The reflector intuitively knows how to make a narcissistic CEO feel good. Although all confidants may do this to some extent, reflectors are driven by their own neurotic need to please authority. That’s usually because they’ve grown up with narcissistic parents who demanded that their children mirror them to an inappropriate extent. These kids feel that they exist to take care of their parents, rather than the reverse. For example, children with depressed mothers typically feel responsible for their mothers’happiness. In such an environment, a child’s self- esteem becomes contingent on giving the parents what they want, rather than on developing an autonomous personality. Read more
Posted by Maximillian | Filed Under Insight
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