- Leadership is crucial for defining a shared vision and generating buy-in from employees.
- C-level managers are responsible for creating a learning organization that values systems thinking, craftsmanship, and team learning.
- C-level managers must design an organization whose structure, processes, metrics, rewards, and talent align with the organization’s mission.
- Managers are responsible for creating a well-trained, well-organized, well-managed company. If people require constant supervision then management has failed to do its job.
Last year, the new CEO at a client decided to leapfrog existing competitors by creating an innovative product; a product that would attract customers and cause competitors to play catch-up. A team that included the best developers, in the company, was hand-picked; the business was told that cost was not a concern; and the group was secluded from the day-to-day madness and allowed to focus on getting the job done. Despite this the program was a failure and ultimately the task of innovation was “outsourced.” What happened?
A number of major shortcomings inherent in the existing culture doomed the endeavor from the start; these shortcomings were very visible to outsiders but not to long-term employees. Not all organizations face all of these shortcomings — based on my experience, these are more prevalent in larger organizations.
- C-level managers not creating a learning organization
- Lack of a compelling vision
- Lack of prioritization and understanding of what is truly valuable
- Org structures and policies that stifle collaboration and communication of ideas, information, and feelings
- Reward/merit system that punishes innovation and risk taking
- Overly focusing on utilization
- Perception that senior management does not walk their talk
C-level managers not creating a learning organization
A belief that there is one right way and one right answer coupled with the allure of doing it right the first time makes it hazardous for employees to experiment, learn from mistakes, and to try novel approaches. Most command-and-control cultures penalize mistakes and those who have the temerity to try something new quickly learn that it is wiser to dutifully follow every rule and guideline — it’s safer to claim that any failure was due to a shortcoming in the process.
Over time, existent unwanted company behaviors, norms, and values suppress any creative desire and motivation that employees may harbor about building a culture that encourages inquiry and trust. The job becomes a 9-5 grind and people stop offering ideas for improvement.
Lack of a compelling vision
Executives sometimes think that what ought to be done will get done without them getting personally involved. They tell what they want but fail to explain how to achieve what they want and why the want is even important. People lower in the organization hierarchy are left to wonder, “Why should I/we ___?”
A non-existent vision or one that doesn’t align with what employees value and is imposed top-down guarantees lack of buy-in. As Patrick Lencioni so succinctly stated, “Trust and ability to speak freely are the building blocks for eventual results.”
Lack of prioritization and understanding of what is truly valuable
Some companies lose their ability to probe, sense, and respond to market conditions. They inadvertently fail (or purposely ignore) to ask existing and potential customers what they want and what they are willing to actually purchase. Assumptions are made by marketing heads or business owners based on their beliefs, prejudices, and opinions. These invalidated assumptions often prove to be untrue and result in products being developed that no one wants to buy.
The problem is exacerbated when teams are not provided proper guidance on what is truly important. If everything is deemed a high priority (happens in cultures where IT is unable to say “No” to any business customer) then people end up multitasking, which leads to a loss of focus, more defects, delays, and no time for learning and self-improvement.
Org structures and policies that stifle collaboration and communication of ideas, information, and feelings
A command-and-control culture combined with a fractured (silo) organization causes an “us” versus “them” mentality to take root. Looking good, hiding bad news, shifting blame, and painting an overly rosy picture soon follow. A greater need for written communication (used for CYA) further dampens progress. When silos are present you often hear statements like, “that’s not my job” or ” I don’t care about the rest, I did my part.” Eventually we also lose the concept of teams and end up with a group of individuals working on a project. We also lose any understanding of a system-wide value chain. Incentive systems that reward local optimization worsen the situation by encouraging groups to make locally optimized self-serving decisions that negatively affect the whole. (See the Robbers Cave Experiment for how easy it is for such a mentality to spring up.)
Reward/merit system that punishes innovation and risk taking
When being right, making no mistakes, and doing what you are told is valued, people stop trying new approaches. They stop taking risks when their annual merit increases and bonuses are tied to metrics (often vanity ones) that aren’t aligned with the company’s goals. When meeting project time, scope, and budget constraints is how people are evaluated and compensated then it is not surprising to see them disregarding the concept of providing value; its more common to see fudged reports and gamed metrics. (Also see Jim Highsmith’s article, “Can-do Thinking Makes Risk Management Impossible.”)
Managers who don’t understand the difference between common and special causes only create additional rules and policies that further burden teams. Most managers also don’t understand that artificial targets and incentives don’t help if the process itself has problems. (For additional information search for Dr. Deming’s red bead game on YouTube.)
Overly focusing on utilization
An unhealthy stress on maintaining high utilization leaves no time for learning, thinking, improving. Departments want to show that they are very conscientious in how they spend scarce dollars; pushing employees to book all their time to specific projects helps show that employees are valuable and busy. Batching large chunks of work and getting people to be as efficient as possible at each step defeats the goal of making work flow so as to provide value to customers early and often.
Utilization goals of close to 100% are counter-productive as they encourage multitasking and creation of busy work, cause employee burnout, increase defect rates, slow down throughput, increase focus on activities instead of on outcomes, and leave no time for self-improvement. Without time to learn new technologies and keep with with new trends employees cannot be expected to come up with creative ways of getting things done.
Perception that senior management does not walk their talk
People quickly see through any political maneuvering or chicanery that senior managers might employ in order to look good. They lose faith and respect for managers who are more interested in playing the political game and not in doing what is right for the company or for the team. Such managers lose moral authority and have to resort to organizational power to get anything done. At best they get compliance; not the passion and creativity that an engaged employee brings to the table.
Other managers talk a great game but fall short on execution. Ultimately, actions speak louder than words and when there is a disconnect between what is said and what is done, people begin to disregard the spoken word. If managers and executives really believe in something, they should take every opportunity to demonstrate its importance. When employees don’t see the passion and don’t hear the message communicated over-and-over again they rightly assume that the new thing is just another passing fad. It isn’t the employees’ fault that they don’t believe; it is management’s responsibility to create new experiences that permit employees to question their existing beliefs and to try new actions in the hope of getting better results.
So, why did this company fail to innovate? The group had shortlisted 8 possible things they could work on but they dithered for months about which of these to work on first. They failed to quickly validate their assumptions on whether the market really wanted any of the things being proposed. The group continued to rely on tried-and-true methods and constantly referred to what had worked in the past; they failed to realize that new approaches to development were called for. They lacked managers unafraid of making decisions that were not guaranteed to succeed. They lacked executives who could provide the group with a clear direction or a challenging vision. A political struggle between the CEO and CFO worsened the situation and neither wanted to compromise on his agenda.
This company had over the years de-emphasized systems thinking, personal mastery, shared vision, and team learning. Was it then any surprise that their ability to innovate had withered and disappeared? Losing the innovative edge makes it harder to keep up with faster nimbler competitors who aren’t resting on their laurels and are actively looking for ways to leave you in the dust. Ultimately, being nimble and agile is not a choice — it’s a necessity for survival and growth.