Season 6 Show 5
Advice from business’s best thought leaders made easy to understand and practical to implement
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On today’s show I will take you through three articles. Two will provide ideas on how you can improve the performance of your teams and the last one suggest a solution should you be facing a skills or capacity gap. Many companies have more ideas than they can effectively implement and the last article focuses on the advantages of short term management positions to bridge those gaps.
The first article we will discuss is from McKinsey & Co and is entitled Team Work at the Top. This will provide you the ability to identify if some of the common causes of less than ideal performance are present in your company and how to fix them. The article mentions the need for diversity of thought in any organization and neatly takes us to the second article from Wharton, that encourages you as the leader to hire disagreeable people. Note in this case disagreeable does not mean unpleasant, it refers to people who will challenge your thinking.
Do you have a skills gap or a capacity gap in your company? In our final article for today from MIT Sloan the authors, Tracy Anderson and Peter Cappelli explain why hiring an outside on a short term contract may be the ideal solution.
Teamwork at that top McKinsey & Co Erika Herb, Keith Leslie, Colin Price;
When the team at the top isn’t working well, the whole company suffers. This article from McKinsey focuses on large corporations. It starts by referencing heroic leadership and questioning whether a single person can make a difference to an organization. There are times when it seems to be the case that an outstanding CEO can take a company in a new direction. But even Jack Welch the famed CEO of General Electric emphasized the power of a team in action.
I normally cite recent publications, but this article is quite old, it was written in the year 2000 but the ideas expressed are as relevant today as they were twenty years ago. The fundamentals of business and maybe more importantly the human psyche have not changed in the last two decades.
The age of the article is relevant because of its reference at the start to Jack Welch, certainly lauded during his time at GE. Mr. Welch died in 2020 after retiring in 2001. By 2020 GE was a shadow of its former self and many question whether Neutron Jack, as he was sometimes called, was the success many, at the time, considered him to be. Sustainable greatness is very hard to achieve. About the same time as this McKinsey article was written, Jim Collins authored a book called Good to Great. In his book he looked at 11 companies that had performed particularly well. It is a well written book and easy to read and it still contains a lot of value. But if you choose to read it, and you should consider reading it, take a look at the 11 companies discussed and see where they are today. In an interview with The Economist in 2009, only 8 years after his book had been published, Jim Collins confirmed that many had deteriorated to mediocracy or even gone bankrupt. Sustainable greatness is very hard to maintain.
What can be learnt from the McKinsey article that will enable you and your senior managers to work more effectively and keep your business going forward?
One of the reasons I like this article is that it downplays activities such as formal team-building retreats, workshops, training sessions etc. Sure, these activities may have their place in some companies, but they should not be central to team building. In fact, if you find yourself thinking you need these activities you probably have a fundamental problem that will not be solved by a formal approach. On the other hand, if you think a retreat may be enjoyable and help your team work better together then by all means go ahead. There is a world of difference between wanting a team building activity and feeling you need one.
The authors identify three aspects of leadership that an effective team must master. Firstly, they must have a common purpose, be aligned in goals and values. In other words, all rowing in the same direction. They must interact well with each other, being willing to help each other out in solving issues. The third aspect is the ability to renew themselves, to expand their capabilities in response to change. Sounds simple enough but throughout my career I can only think of a few times when I have been on a leadership team that was highly effective. And that was rarely by design, it sort of just happened, the right mix of skills, experience and personalities came together and great things happened. And in larger organizations the members of effective teams are tapped on the shoulders for more senior positions, the team disintegrates, the division they led decline and the individuals themselves can fail to live up to expectations in their new role because they do not have their team members to support them.
What are the common causes that lead a team to be less effective than it could be?
Lack of alignment. Your team may understand your vision, but they may not have a shared view of how to accomplish it. The article cites an example of the top five execs of a well-known energy company who were asked to list the company’s top ten priorities. Between them they came up with twenty three, only 2 priorities made everyone’s list. Only 7 appeared on three people’s lists and 13 priorities appeared on only one list. Put another way, each exec has two or more priorities which were not shared by any others on the leadership team. Given the timing of the article which was published in 2000 I wonder if the energy company in question was Enron. In 2000 Enron was seen as a company “Leading the revolution” before it blew up in 2002 and several of its executives were jailed.
Lack of deep understanding. This is shown when actions taken are inconsistent with the agreed direction of the company. The article suggests this is due to a tendency for top teams to focus on decisions without examining the assumptions and rationale behind them. In my experience when actions are inconsistent with the company’s overall goals the reason is that the manager is looking after her/his own best interests. How performance is measured has to be carefully considered to minimize conflicts of interests.
Poor communication is a leading cause of poor performance. In my opinion the use of e-mail over face to face or phone communication has led to an increase in communication failures. I confess I am immune to this myself but it is a bad habit and one I try to avoid. I am sure you, like me, have been on an email string where two people are “discussing” an issue via back and forth emails. This should not be tolerated, if they are in the same location they should meet face to face or if they are indifferent locations they should get on the phone. When I started work, making an international phone call was a big deal. For some calls you needed to book them in advance, and they were expensive. Today with services such as WhatsApp they are essentially free and immediately available. And keep in mind talking is not necessarily communication. On key issues it is worth taking the time to ensure both parties understand each other, that you are on the same page.
A less than optimum organizational structure. Although most managers recognize that an element of renewal is essential to keep a team fresh, few actually implement change. This is because it will take you out of your comfort zone and most of us like to remain where we feel comfortable. Keep in mind you and your team are not developing while you remain in your comfort zone. Although the article lists personal dissatisfaction as a separate issue, it is related to lack of organizational renewal. The authors say that 25% of the folks they interviewed felt that their job did not challenge them. As a leader you should identify the employees who are not being stretched and push them to take on new projects that will help them develop and grow. Although I am not a fan of performance appraisals these can be an avenue to identify staff who are ready for some new challenges. Of course, nothing beats a face to face meeting, maybe over lunch, where you take the time to discuss a member of your staff’s career aspirations.
How to improve your top teams performance.
Make sure that they are focused on the company’s top priorities and are not wasting time firefighting issues that can be handled by other staff members. They should be doing the work only they can do. Such as setting strategy, managing performance, reviewing, and developing top talent.
It can be hard to identify areas of performance that need improving from within. Consider seeking outside advice, if you have a trusted mentor, someone on your board of directors who is willing to help talk to them, or hire some outside consultants to seek their input. A fresh set of eyes can often see things that those on the inside cannot. But they should advise, not do. They should not direct the team's work, that must be done by each team member.
Spend time to reflect on your company’s direction, organization, staff capabilities, complete an honest self-assessment of your team's performance. It’s hard to find the time to complete such a review, especially when things seem to be OK. But it is unlikely your team is achieving all it is capable of, and it is up to you as the leader to create the environment that allows this to happen. If you have been fortunate to be part of a team that is really performing well, you will know how good it feels. People are motivated and no problem seems incapable of being solved.
And a good team needs diversity of thought. I had an outstanding team when I was running a mining operation in South Carolina. One of the sources of our success was our different personalities. The team was me, a Brit, a couple of Bostonians and some good old boys from South Carolina. I am sort of a big picture guy, coming up with ideas with the confidence that I could see them through whatever came up. I spoke about this managerial trait of misplaced confidence on last week’s show, it is not easy when you see your own failings identified. But in this case my number two was a detailed guy. He would consider every aspect of a situation and would sometimes point out weaknesses in my ideas. This helped us as a team refine strategies and increased our chances of success. And it worked beyond anyone’s expectations. In the year after I came onboard, in the first quarter we made our full year profit goal. And by the end of the year at nearly 4 times our target.
The need to work with folks with different views from yourself neatly transitions us to the next article for this week’s show. It comes from a source I have not used before in this season, Knowledge@Wharton. For those of you who may not be familiar with Wharton, it is the business school of the University of Pennsylvania and is a highly regarded institution. They regularly publish articles that are freely available and today’s article is an example.
It is Why you need a Challenge Network by Adam Grant who is a Wharton management professor.
The article is an excerpt from Adam Grant's book, Think Again, in which Mr Grant explains why success often comes from surrounding ourselves with disagreeable people, skeptics who can point out our blind spots, question our assumptions and help us overcome our weaknesses.
The article focuses on Pixar and the team of disagreeable people who were brought together to do what many at Pixar thought was impossible or at least would take a decade to achieve and cost huge sums of money. The result of this team of black sheep, pirates, disgruntled people was The Incredibles which grossed over $600 million and won an Oscar for the best animated picture.
I do not believe that in this case Mr. Grant means by disagreeable people he means people who are unpleasant. Research has shown that people would rather work with the loveable fool rather than the competent jerk. But in this case he is referring to people who are willing to speak up, to challenge, rock the boat and encourage us to reconsider our own ideas.
It is human nature to like people who are similar to ourselves and this is the type of person we tend to hire. And it is also human nature to enjoy praise over criticism. The article cites an experiment, where people got feedback from a partner, if they were criticized rather than praised, they were four times more likely to request a change of partner. This also happens in the workplace, research shows that if someone received negative feedback from colleagues they were likely to avoid those colleagues in the future. And as a result their performance suffered.
As the leader of your company, division, team do not shield yourself from dissent. Leaders who surround themselves with yes men become over confident. They stick with their existing plans rather than changing paths which sets them on a collision course with failure.
You will learn more from people who challenge your thought process than those who affirm your conclusions. Strong leaders encourage critics and make themselves stronger. Weak leaders silence their critics and make themselves weaker.
Creating an environment where people feel comfortable expressing contrary opinions takes effort. You should encourage people who may not be comfortable speaking out to do so. Especially newcomers, introverts, minorities whose voices may be drowned out by more established team members. Mr. Grant discusses the tendency for people to suppress their views in favor of conforming to the views of the Hippo – The Highest Paid Person’s Opinion.
If you find that you are getting nods and expressions of approval whenever you put forward an idea or proposal, then you probably do not have the ideal team. Encourage dissent, alternative views. Consider asking a team member to be the devil's advocate, to put forward conflicting ideas. Remember we learn more from people who challenge our thought processes than those who affirm our conclusions. In fact, if people only affirm our conclusions and do not improve on them, then we learn nothing.
The final article for this show could be considered to be a bit self-serving for me as an independent consultant.
It comes from MIT Sloan and is written by Tacy Anderson and Peter Cappelli and is titled The Outsider Edge. The subtitle is: The success of managers hired for temporary roles shows that loose ties and cultural distance can help a leader be effective.
The focus of the article is on consultants who are acting as temporary managers with a contract with a defined end point that is agreed with the client and is known to the client's employees. They have no prior history with the client, and they do not have a future with the client beyond the end of their contract.
The leading reason for hiring such contractors was to bridge a gap in the client’s skill set. The second reason was the lack of capacity. The client needed to fill a temporary gap and did not want to create a permanent position.
You would imagine the temporary nature of the assignment would give the contractor some clear disadvantages and indeed the authors found five key drawbacks.
Lack of social capital, with no prior history with the client the consultant has no social capital to draw on. No favours to call in. This can make pushback from full time employees difficult to overcome because the consultant cannot use the influence of colleagues.
A lack of understanding of the client’s culture is the second drawback. As a result they might violate some unspoken rules and thus fail to connect with employees
The third problem is a lack of historical perspective and context. Who do they need to influence? How did the issue they are trying to fix arise? What are the real reporting structures rather than those shown on the Org Charts.
A fourth challenge stems from the temporary nature of their employment. The consultant rarely plays a role in employee assessments and as a result employees do not see them as being influential in their career. They were less likely to simply do what the contractors wants.
And finally as non-employees the consultant may not have access to all the information that is available to employees.
So with these obvious drawbacks how do temporary managers succeed?
As you may expect the consultants rely on their personal expertise and credibility, enhanced by their experiences of having worked elsewhere. Interestingly these outsiders were able to connect with employees and gain trust given their objectivity and independence of not being an employee.
As the consultants are hired for a specific role they often have more detailed knowledge and greater breadth of experience on the subject than even the most senior employees at the client company. This gives the contractor a source of social power and legitimacy. However this is not automatically accepted as a given. The consultant has to demonstrate that they know their stuff and deliver it in a way that is acceptable to the company. They must show valuable expertise while demonstrating humility. Respecting the existing employees expertise is important. Actively seeking out and engaging pockets of internal expertise is a good way to gain acceptance.
Successful contractor managers use their position to create opportunities for employees to develop and shine. Highlighting the employees contribution to the project, allowing them to lead presentations etc. The contractor does not have a long term future with the client so is not there to make the employee look good. Consider this, the consultant has been hired for her/his expertise which is lacking in the client. By transferring this knowledge the consultant strengthens the company and the employee.
The ability to work with relative freedom for organizational politics and constraints is an advantage. Being able to speak candidly without the concern of building a future with the client helps to earn respect. This highlights a common truth about organizations: Employees have more incentive to please current leadership than look after the longer term interests of the organization.
The time limited nature of their assignments also means that consultants are not a threat to anyone’s career aspirations. This can lead to more open conversations which facilitate better progress and results.
So short term assignments confer advantages that the sensitive consultant can use to his/her advantage which will lead to better outcomes for the client.
Temporary management roles are ideal for fast growing companies where managerial roles are evolving and long term placements are not desirable. Or for companies facing an uncertain future. From my perspective a capacity gap within your organization is maybe the strongest reason for hiring a short term manager. For example if your leadership team is focused on a major task such the launch of a new division, geographical expansion or an acquisition hiring a short term manager to handle the day to day activities thus allowing your management team to focus on the growth project may make sense. Another reason could be to drive that initiative that you just do not have the time for but would advance your company if it could be completed.
Are there projects that a short term manager where a long term manager may not be suitable? Projects that require a change in culture are probably not a good choice. The fact that the consultant is only there for a predefined period gives them fewer tools to drive change. And it is likely that the company culture will revert to the earlier type once the consultant leaves.
Managing as an organizational insider has its advantages; the research contained in this article suggests that contractors had a different set of advantages. In some cases their outsider perspective, and capabilities are exactly what is needed. So if you have a skills or capacity gap consider hiring an outsider.
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