What interests or agendas do most of your decisions and actions serve: self interest of your own career, those of your unit, your company, your clients or stakeholders?
Pulling the right levers (audio)
When you “pull a lever” in your role in your job or business, how long does it generally take before you see the results or impacts of that decision or action on the company’s bottom line? How well are you able to connect these two? With other words, how far removed are your actions from their results or how close are they to having you see how these actions really mattered? If you reflect on it honestly, what interests or agendas do most of your decisions and actions serve: your own career, those of your division or department, or of your organization and those of your clients and shareholders?
Can you also feel all the waste happening around you?
I have spent 30+ years of my working career employed in corporate business in large, complex, global matrix organizations. In the latter half of these 3 decades it became increasingly clear to me how much energy these organizations consumed (I nearly said wasted) on themselves and all the internal agendas of its individuals. Significant ego driven, personal agendas and (“mine is more important than yours”) department based interests are often put ahead of the company’s interests instead of directing that energy to the market, satisfying their clients and shareholders etc. I found this so prevalent, that it is almost considered “quite normal” in Corporate business today. Can you relate?
Only when I started consulting and seeing into many such very large organizations “from the outside in” did I start realizing the endemic prevalence and extent or magnitude of this waste. And as I began coaching and consulting into medium size and particularly small organizations did this contrast become so strikingly clear to me.
The reality of small organizations
When I started my own business, everything was up to me. I set all the plans and budgets, made all the decisions and “if anything was to be, it was up to me”. In the context of the heading metaphor, there was a directly measurable link between cause and effect; some evidence of procrastination perhaps, but no politics or agendas or any of the kind of distractive waste I encountered in my corporate life. Most decisions and actions need to and also had financial significance.
As I started working with smaller organizations I watched the transition of some from small to medium size businesses where after having grown to perhaps 20+ employees, it often occurred that the erstwhile owners still were still running the business as if they were the only decision maker – a clearly untenable or unsustainable situation if the business was to survive and grow.
Those of you that have read Michael Gerber’s “The E-Myth” books will know that sometimes the opposite also occurs, where the owners employ staff to whom they then transfer too much ownership and end up abdicating their responsibilities, which also doesn’t work sustainably.
So as soon as any delegation comes into play, the balance required between decisions made to further personal objectives and those made for the good of the organisation emerges.
My experience has been that the larger the organisation grows, so the propensity for people to take advantage of “bending” decision making into their own personal favour grows.
What you measure is what you get
One of the biggest leadership tenets is managing performance of those employed or contracted to deliver what the business requires. One of the oldest leadership clichés is “what you measure is what you get”, whereby most capable and busy people will inevitably be driven by any incentive to do well, whether that incentive is financial or other.
A very typical example of this is a sales person, fixated on winning contracts. If the measure is only on “revenue”, there is the risk that the sales will be made at any cost. Forgetting when and how to step away from unprofitable deals, they will almost “sell anything” in order to meet their target. Adding “profitable” to the measure as a dimension (for instance with a minimum % margin) will already improve that focus and consequently amend the behaviour.
Most of my work with my business clients includes performance management so as to maximize the performance of individuals to drive the common cause of the business as well as to have clear strategies in place that help deal with lacking performance of individuals.
Large organization dilemmas
This “leverage effect” was brought home to me so much more as I worked with clients in large organizations, where the levers seemed to be much shorter; with other words where the measured period between cause and effect was in fact much longer. That is that the time between a decision or action and the ability to measure the impact of that on the company’s result was often very long.
I have learned how much easier it is for people in larger businesses to leverage this fact in their personal favour. To the point where I have become quite perplexed how easy it can be for smart people to “play the system” and not be found out.
Think about a typical tenure of a role in today’s corporate world. Would you agree with me that it is often perhaps only two to three ears before the individual “moves on” or is promoted into a different role? Doesn’t that make the real deliverables cycle very short? Doesn’t that necessitate most of the objectives or targets or goals to be similarly short term? Can you see how that plays into the hands of being able to “duck and dive” and to have “moved on” before any real measure of any longer term impact is able to be really determined or “banked”?
This has been true to the extent that I have been appalled at how some decisions or actions show how little knowledge or respect certain decision makers have of the consequences of their action, commercially, strategically or from the perspective of serving the company’s or the customer’s benefits or needs. I can sense some of you nodding your heads in acknowledgement, right?
In the context of leadership, this awareness can and should provide some very useful do’s and don’ts for leaders in business. It suggests that traditional leadership drivers such as having everyone on board clearly understanding and engaging with you to drive your vision also need a good dose of performance management initiatives in place in parallel, in order to make things work the way they were intended.
Remembering that most people will usually always subscribe to What’s in it for me?, isn’t it even more important that leaders need to be sure that they get the measures necessary to invoke, support and then reward the right behaviour? And to do so with the correctly worded objectives and targets that are fair and just to assure reaching “the greater good” of all constituents, not just of certain individuals?
In the positive, this influences people wanting to play out the right behaviour and prevents any “hiding place” for those that don’t. Agree? Yet I am amazed at how often this either isn’t recognized or understood or simply ignored.
What I have found is that as people become further removed from the fundamentals of the business, particularly as the organizations they work in are and get bigger and larger, so their awareness of their leverage towards the bottom line dissipates.
I have found that people that have grown from small business into medium size businesses and then moved on to large corporate businesses are far better able to maintain this awareness. Of course the longer they are in such large roles and organizations, so the risk of “losing touch” with the bottom line increases.
Unfortunately many graduates starting their career in large corporates don’t ever learn to appreciate this, unless they are led by someone that conscientiously teaches, monitors and mentors this.
I have experienced many people coming from small business observe the “waste” I’m talking about above in disbelief.
So where would you place yourself on the spectrum of this dilemma?
If you are a leader, are you leading by example and earning and maintaining the trust and respect of those you lead both by living by such standards yourself? And are you creating environments in which those you lead can do so willingly and beneficially for all? Are you stamping out such wasteful practices or are you condoning them by “looking the other way”?
If you are led, are you playing along and supporting an unsustainable culture because “that’s the way things are done here”? Or are you trying to find ways to make such practices visible so they can be dealt with the way they should? And if they can’t, are you “voting with your feet”?
And when you are ready to lead others, which type of approach and behaviour will you live, encourage and lead, do you think?
So what if the next time you make a decision yourself or are able to observe one being made, you reminded yourself of the “lever” metaphor and tested your impending approach or challenged those of someone else? What if you did, and it started to help a really valuable change in awareness?
Kerry Crompton (@itskerryc) says
A good missive Heiner, and on the money too.
2012 has been the Australian year of corporate procrastination. Those who do nothing make no mistakes, and I came across a myriad of “do nothings” last year. What surprises me is how their weak leaders do not spot this and take action.
Lets hope for a better application of personal responsibility and leadership at all levels in Australian commerce this year. Oh, and the rediscovery of business ethics would be a very good start.