Reducing control to increase success
Policies, processes and controls that are designed to improve performance
can often deliver unintended, negative consequences. This is not
only true in business organisations it seems, but in other systems also.
In London, for example, the Mayor is removing street furniture
- signs, traffic lights, barriers and road markings - in order
to create uncertainty about who has the right of way between cars, cycles
and pedestrians.
The ambiguity of the 'shared space' concept creates an environment
where all users act more responsibly and take care of each other.
The roll-out of the scheme in London follows a trial where the number of
collisions fell by 40%.
Similarly, you need to create the space - and remove unnecessary
barriers - to allow your people to work with each other, your suppliers
and your customers. Reducing the level of control may lead to the odd preventable
accident, but as with the London traffic trial, it can create better overall
performance.
So how do you know if you have excessive and inhibiting levels
of control? Here are 7 indicators that your organisation has installed
too much street furniture.
- No guiding purpose or intent.A sense of organisational
purpose, over and above the pursuit of profit, can have a galvanising
effect on an organisation and how it operates. Whole Foods, the US organic
and natural food supermarket, has a mission of Whole Foods, Whole People,
Whole Planet, and has used this purpose to give its people broad discretion
to make effective decisions. The simple test is whether the decision is
in line with the Whole Foods' mission.
- More than 7 KPI's.Psychological studies show that people
cannot hold more than seven pieces of information at once. Having too
many KPI's creates confusion and hinders development. In his book Good
to Great Jim Collins argues that great organisations establish a
single KPI to keep managers focused on what's truly important.
- Your people are not given, or made accountable for, specifically
defined outcomes. Marcus Buckingham's book First, Break All
The Rules is based on a study of effective management that included
a survey of over 1 million employees. A key conclusion was that the best
managers focus their time on setting their people the right outcomes,
not on prescribing how the results should be achieved. We all have different
needs and preferences, and great managers play to this by being rigorous
on the destination but not on the route taken.
- An intolerance of failure.Behind every great breakthrough
and success is a mountain of failure. Thomas Edison filed over 1,000 patents,
and is credited with developing early solutions for mass communication
and electricity distribution. He famously replied to criticism of his
failure rate that "I have not failed, I've just found 10,000 ways
that won't work." Similarly, I have written elsewhere
that it took Tesco, for example, over five years and many prototypes to
build a winning model for its Express format. How much failure is tolerated
in your organisation?
- Senior leaders spend more than half their time in Head Office.
Remoteness of leadership generates the need for greater 'remote'
control. Conversely, where business leaders spend real time in the field
understanding what's happening on the ground they are better able to place
their trust in their people to do the right thing.
- Remote investment sign-offs. How many layers up the
organisation do you need to go before you can get the investment for new
initiatives? If relatively small investment decisions require senior sign-off,
it is likely that the authoriser does not understand what is being asked
for and that unnecessary time is taken to justify the investment.
- Annual planning and budgeting. Relying on annual planning
cycles to discuss strategy, direction and investments kills the ability
of your organisation to respond to fast-moving markets. Former CEO of
Ebay, Meg Whitman, said of her company that, unlike the traditional strategy
approach of annual meetings, "strategy sessions are needed several
times a week."
The bottom line
What controls are preventing your people from achieving dramatically
better results?
To find out more contact Stuart by clicking here or call +44-(0)1636-526111.