Managers and employees spend much of their time in discussions, but too often conversations bog down in an endless series of unproductive meetings in which the usual suspects cover the same ground without making progress. Frustration mounts as participants “spin their wheels” or “talk in circles.” This frustration often occurs when managers lead the wrong kinds of discussions at the wrong time in the wrong way.
My last post introduced the agility loop as a simple framework to helm managers and employees structure and lead discussions in a more effective manner. The first step in structuring and leading discussions through the agility loop consists of deciding which discussion to have when, who should be involved, and how to lead these conversations. The following questions can help managers improve their discussions.
1. What are we talking about? This simple question often surfaces a disturbing lack of focus about the objective of a discussion. Discussions, particularly those that take place in large groups, often derail when participants pursue multiple strands simultaneously and end up talking past one another. To focus their brainstorming discussions, the design firm IDEO enforces a rule that a team can only discuss one idea at a time.
2. Are the right people in the room? Conversations often fail before they begin, when team leaders fail to bring
Firms do not pass through a life-cycle, but individual opportunities do. To thrive in turbulence, organizations must rapidly shift resources from stagnant businesses to the most promising opportunities for future growth, a capability I refer to as portfolio agility. Unfortunately, reallocation of resources is easier said than done.
Opportunities at different stages in the life-cycle vary in objectives, appropriate management style, performance metrics, and predictability. A venture in the start-up stage should focus on milestones that validate customer demand and technical feasibility, for example, while success of a mature business can be measured by financial metrics. Many companies, however, apply a one size fits all management style to all businesses in their portfolio, regardless of their stage in the lifecycle.
During the boom, many managers assumed their companies excelled at execution. In fact, much of their success arose from strong economic tailwinds. Now that the winds have shifted, executives discover to their chagrin that their company’s execution engine is less powerful than they imagined. This post lists five of the top obstacles to execution in volatile markets.
5) Rely exclusively on process to execute. Many managers equate execution with standardized processes. They re-engineer key procedures and employ process disciplines, including six sigma, or total quality management to ensure continuous improvement. These approaches work well for activities–such as processing transactions or manufacturing cars–that can be laid out in advance and repeated thousands or millions of times per year with minimal variation. Process tools work less well for activities that consume much of the typical knowledge workers time, including coordinatinating work across a matrix or generating innovative solutions to unique problems. A study by Professors Mary Benner of Wharton and Michael Tushman of Harvard Business School found greater investment in process disciplines decreased innovation (beyond incremental improvements in their existing processes). Managers need a broader range of tools to manage non-routine work.
Much has been written about enhancing co-ordination across organisational silos, a topic that sits near the top of most executives’ to-do list. A search of business and investing books on amazon.com for the keyword “collaboration” turns up nearly 37,000 books. Do we really need another one?
Companies often respond to market shifts by accelerating activities that worked in the past, a tendency I call active inertia. Like a driver whose car has its back wheels stuck in a rut, managers press on the gas hoping to pull out, but instead dig themselves deeper. Hardened commitments mark the well-worn grooves that channel behavior into historical patterns.
Companies fall prey to active inertia when their hardened commitments channel their response to market changes into existing grooves. Below are some warning signals that indicate executives at your organisation may be locked into their historical commitments and susceptible to active inertia, should the environment shift.
In today’s paper, I have written about why good companies decline.
Many people tell a simple story of corporate failure. Success breeds hubris which leads to overreach and triggers decline. After studying the causes of corporate failure and helping companies avoid it for two decades I have discovered a more profound dynamic that drives corporate decline. The commitments required to succeed harden over time and prevent companies from adapting effectively when circumstances shift. Organisastions often succumb to active inertia – they respond to disruptive changes in the environment by accelerating activities that worked in the past. This post describes the dynamic in finer detail.
The downturn has exposed flaws in business models, such as newspapers. Identifying basket cases after they have collapsed is easy, but by then it is too late to save them. The trick is to spot the weak spots in a damaged business model before it collapses, while management has the resources and time to fix it.
Long immersion in an industry can blind executives to flaws in their strategy and business processes. Managers can use a simple exercise to counteract the tendency to take an industry’s practices for granted. Imagine ten years from now, your industry’s dominant business model has collapsed. You write a cynical blog post explaining why the business model collapsed. Don’t shoot for balance but instead emphasize the weak spots that killed the industry. Below are a few examples of this analysis for some business models that look healthy right now, but collapse from dry rot in the future.