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.

  1. 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.
  2. 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.
  3. 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.
  4. 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?
  5. 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.
  6. 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.
  7. 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.