Obliquity – Reaching Goals and Objectives indirectly

The dictionary definition of obliquity is:

                                   a. A deviation from a vertical or horizontal line, plane, position, or direction.
                                   b. The angle or extent of such a deviation.
At first glance, this would not seem to be a term that would be of much importance to business.  In his recent book entitled Obliquity.Why our Goals are best achieved indirectly, John Kay (a leading economist in the UK) explains why this word and the concept behind it may very well be invaluable in the implementation of business strategy.
In attempting to achieve our goals, we often take the most direct route possible.  It turns out, writes Kay, that this is often counter-productive.
One of the more vivid examples from the book, was the topic of fighting forest fires.  Initially, the US forestry department had as a goal to put out all forest fires as soon as they occured.  This turned out to be a disastrous policy, since forest fires are part of the natural regeneration of fires.  In other words, in order to minimize the amount of damage done from forest fires, the forestery department, had to slowly learn that best way of fighting forest fires was to allow certain fires to go unchecked.
Forest Fire
Similar forces are in play in the economy.  The well known top level objective of maximizing shareholder value is probably best achieved by not pursuing every profitable opportunity.  Kay lists various examples, among them the chemical company ICI. He noted that in the postwar period until the 1990s, that ICI’s top-most objective was “the responsible application of chemistry”.  Under the pursuit of this goal, ICI achieved admirable results and created substantial value for its shareholders.  In 1997, the orientation of the company shifted towards maximizing shareholder value.  A series of acquistions and re-engineering efforts were made in the direct pursuit of profit.  The result was a destruction of shareholder value.  ICI ceased to exist as an independent company in 2007.
Jack Welch was quoted to say: “Shareholder Value is the dumbest idea in the world…The job of a leader and his her team is to deliver commitments in the short term while investing in the long term health of the business.  Employees will benefit from  job security and better rewards.  Customers will benefit from better products and services.  Communities will benefit because successful companies and their employees give back.  And obviously shareholders will benefit because they can count on companies who will deliver on both their short term commitments and long-term vision.”
In other words, Jack Welch – historically one of the greater creaters of shareholder value achieved that distinction by not pursuing the maximization of shareholder value directly.

The reasons that the direct approach often fails are many according to Kay:

Pluralism:  There are many solutions to a problem, not just one.  Often the direct or most obvious route is not the best solution.  True innovation requires thinking outside of the box – a highly indirect undertaking.
Interaction:  The objective and its attainment will shift through the interaction of various players.  Lowering price for instance in order to get market share may be counterproductive.  If competitors lower their prices to meet your initiative, the direct approach just leads to lower profits for everyone.
Complexity:  Complex environments are unpredictable.  They are like the weather.  We may know a lot about the individual variables that influence the weather – but we don’t know all of them.  In addition, predicting weather patterns requires knowledge about initial conditions – information that is outside of our reach.  As complexity science has shown, weather prediction can only be approximate at best.  Economic systems are in many ways similar to weather systems.  Who could have predicted the turmoil caused in the mobile phone industry by the introduction of the iphone?
Incompleteness:  We are always working from incomplete information.
Abstraction:  High level goals and objectives such as “maximize shareholder value” are abstract in the sense that even if you have increased shareholder value by a greater amount than your competitors, did you really maximize it.  What was the overall potential? 
What are the implications for business?  Typically strategy attempts to clarify top-line goals as much as possible.  Often substantial market analysis and evaluation of organizational capabilities is involved in setting those targets.
The traditional way of implementing these organizational goals and objectives is then for managers to take the overall goals and break them down into action items for their departments and teams.
This traditional process is the direct approach.
Obliquity implies that this process more often than not will be unsuccessful – or at least not optimal.  What obliquity requires is an ability to change direction in pursuit of top-level goals – and perhaps even an ability to question those goals if better opportunities should present themselves.
Strategy conversations
In my experience, the oblique approach begins with leaders taking ownership of the goals and objectives.  I worked for a pharmaceutical company that was in the business of selling generic drugs in the oncological sector.  An opportunity arose to actually acquire a company with patented pharmaceutical products in their line of business.  Since this was not their normal business model, they wanted buy in from their top managers before going ahead.  The top 60 managers were invited to deliberate on this new strategy and its implications.  The board was not willing to go forward without a consensus decision from these 60 managers.   They realized the risks to the business and the changes that would have to occur were not insignificant.  Right from the beginning of the implementation of this new strategy, they realized they needed buy-in from all key leaders in the organization.
Understanding the risks involved and reaching consensus was done through a large participatory process where each person had the opportunity to voice their concerns and listen to others’ perspectives at the same time.
Mayne Group
I think this type of ownership should be no different for so called “normal” strategic initiatives.  Only if leaders throughout the organization have a sense of JOINT ownership of the strategy, the oblique approaches that will be necessary to be successful will not be explored.  Each leader will break down the strategy into as direct and as linear a process as possible, often conflicting with the actions of others inside the company.

“The straight line lies, the truth is a circle.”                                                                                                         Friederich Nietzsche

Advertisements

Leadership vs. Leaders – a new framework to differentiate the two

In a 2006 article published in the Financial Times, business school professor Henry Mintzberg attacked the obsessive focus on individual leaders as the pillar of organizational effectiveness: “By focusing on the single person…leadership becomes part of the syndrome of individuality that is … undermining organizations”.

Henry Mintzberg is not alone in bemoaning the excessive attention to individual leadership.  Many authors have voiced their objections.  To be fair however, the fixation on leaders as individual actors results from the lack of an alternative framework from which to view leadership.

That alternative framework is readily available today.  The difficulty is that old habits and ways of thinking die hard. It is far too easy for us to conceive of leadership in terms of the individual actor.  As a result, we do not see the alternative framework – even when it stares us in the face.

The frame of reference that helps us to better understand the effectiveness of  leadership  is the network.  Work in organizations gets done through the collaboration of individuals.  Individuals that work with each other (and/or exchange information) form the basis of a network.  A mapping of the networks inside of an organization reveals how information flows inside of an organization and what patterns of collaboration exist.  From this framework we can begin to talk about leadership in the plural.

Let us look at an example:

Network analysis

The above diagram is a network analysis of two companies that have recently merged.  Each small square represents an individual.  From this diagram it is clear that managers are still only interacting with those individuals from the company from which they came.  There is one individual who straddles the information flow between the groups, but otherwise the groups interact separately (with minor exceptions).

The individual at the center of the information flow  could be seen as an invaluable asset to the organization.  He or she is the leader that connects the two organizations.  From a systemic perspective that same individual could potentially also be seen as a major bottleneck in the effective collaboration of the two teams.

Through network analyses like this one, the role of leadership can be visualized.  Leadership is the interaction of various “leaders”.  Effective leadership in this case would visibly alter the pattern of collaboration.

Creating maps such as the one above is not difficult.  The software and analysis tools to create such diagrams are readily available.  The biggest inhibitor in using the network frame of reference is our lack of familiarity with it.  If we were able to change the mental models of our leaders so that this frame of reference were commonplace, the impact on our organizations would be immense.

Individual leadership development is as necessary as ever.  Perhaps as part of that leadership development, we should teach our leaders to view leadership from a different perspective.

“Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.”       Marcus Aurelius

A small company invests in leadership – Part 3 – initiating the process

Circle - phases 1 and 2

The team development process in which I spoke about in previous blogs (posts from Feb 12 and Feb 24) got started in the past two weeks.  The managing director of the German operations agreed with the process I proposed and gave the green light to go ahead.

Since then I have put the process in motion, concentrating on establishing the appropriate framework for the team development process and starting the initiative.

Getting the right framework is critical.  Two questions need to be answered before anything else can be done.  The first question is Why? – i.e. what is the purpose of making this effort and what does the company expect to be the  outcomes of this initiative.  The second question is Who? – who is and who is not on the team (and why or why not?).

I met with the managing director and the executive in charge of personal development for three hours to discuss these two vital questions.

Normally I would include more people in the search for the answers to these questions.  In the case of this client, I made a judgement call that keeping the number of people to a minimum was the appropriate strategy.  The key in this particular situation is having the 100% buy-in of the managing director who is de-facto the team leader.  This company has never gone through a process like this before.  Opening up the process to a larger group of people might create more questions and doubts than answers at this very early stage of the process.

My role was to facilitate an answer to the two key questions of Why? and Who?  that was both compelling and motivating.  Our conversation was very fruitful and the two company representatives came up with the following formulation:

“The purpose of this initiative is to prepare our organization for the next level of performance by strengthening our key success factor ‘Customer-Centricity’ and living and transmitting our values (respect, readiness to communicate and continuous improvement).”

This formulation puts the whole initiative in perspective, indicating what needs to be emphasized and what does not.

The next step was a bit more difficult – who should actually be on the team.  Studies have shown that in order to build a cohesive and interconnected team, that the optimal size is between 4 and 8 people.  The managing director had originally conceived of her team as consisting of 12 people.  Size does matter.  The larger the group, the more it tends to subdivide into smaller units.  If cohesion is an important goal of a teambuilding initiative, reducing the size of the team is imperative.  Of course, by reducing the team you have to avoid creating adverse effects with those people who are not selected.

After a thorough discussion, the team was paired down to 9.  The managing director the next week then communicated the purpose and the goals to not just the selected team, but to the entire company.  She also had personal meetings with the 3 that were not to be part of this development process.

With the purpose in place and the team defined, this week I officially launched the process for the team with an online questionnaire.  I wanted them to begin to think about what it means to be a team.  The questionnaire was made up of 12 basic questions about teams and took approximately 20 minutes to fill out.  Below is a sample view of a few of the questions in the questionnaire:

Questionnaire

Next week I will be meeting with all nine team members individually.  Two hour interviews have been arranged.  The purpose of the interviews are for me to get to know the team members personally, get them to think further about the meaning of a team and their role within that team and to address any barriers that may exist in entering into this team development process.

Circle - complete

The rubicon has been crossed….

Many men go fishing all of their lives without knowing it is not fish they are after.”   Henry David Thoreau

A small company invests in leadership – Part 1

Last week I had the opportunity to meet with a small to medium sized company in the precision instruments business.  With manufacturing in Europe and the US and the opening of distribution centers in China and Brazil, it has become in the past few years a truly global enterprise.

G33_InCoherentSources_mwn G36_Detectors_mvn

I have known the director of the German operations for many years.  Over that time we have had interesting conversations on leadership, culture and high performance teams.  The conversations usually ended with her telling me that I should help her with her business, but nothing concrete materialized.  I always told her that when the time was right, she would know.  Over the years, she has had a lot on her plate to put the house in order.  There were two changes in ownership of the organization.  This disruption was accompanied by operations running in the red for a few years.  Re-organizing production and distrubution were top priorities.

When I took a tour of the facilities last week, I was impressed with what had been achieved.  They have a catalogue of approximately 12.000 items – most of which can be assembled and shipped within twenty-four hours of receiving an order.  They are able to do this even though most products have to be assembled before being shipped.  Approximately 180 orders go out a day.

They have also done an admirable job in attending to the culture of the organization.  When a new employee comes into the organization, they have a one-on-one session with the director and talk about the values of the company.  Absolute priority is given to customer orientation.  As proof of that commitment, an extensive feedback system has been developed in which scientists who use the instruments are in constant dialogue with the company’s management.  The company’s CEO takes pride in being part of those conversations.

After reading the feedback from her employees from a 360° feedback instrument, the director of the German operations decided that it was time to invest in leadership.  Despite or perhaps because of all of the success that had been achieved, there was a limit as to how much further she could take the company, based on her leadership capabilities alone.  She realized that the time had come for an increase in the level of leadership within the organization.

Last week we had a discussion on what it would take for her team to begin to take more ownership for the direction in which the organization is developing and more accountability for the alignment and commitment of its employees.

I will be putting a proposal together in the next two weeks and hope through this blog to keep you informed on the way the  leadership consulting process unfolds through this most interesting case study.

“I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.”                                                                                                                                 – Johann Wolfgang von Goethe

“If you’re walking down the right path and you’re willing to keep walking, eventually you’ll make progress.”                – Barack Obama

The Leadership Catalyst – Introduction

Leadership can be transformational.  With the right leadership in place, companies and organizations can accomplish what seems to be impossible.

Just yesterday I saw the film – The Way Back – a story about a polish political prisoner who in 1941 escapes the Soviet Gulag in Siberia.  He and six other inmates embark on a journey by foot of 5000 km across the very inhospitable terrain which includes the Gobi desert and the Himalayas.  Through sheer determination and resilience, three of the original seven finally make it all the way to India.

We should never underestimate the power of the human spirit.  Leadership is the key to unlocking that potential.

Organizations often are not aware of this power – or do not know how to access it.

In this blog, I will report on the day to day activities of leadership consulting.  This work takes place in many dimensions.  From the perspective of the individual, leadership involves learning about myself, leveraging my strengths and finding the courage to lead not from fear but from conviction.  At the level of a team, leadership requires understanding the various indispensible roles in a well functioning team, sensing team spirit and finding opportunity amongst conflict.  Organizational leadership is about context – setting the right environment for performance and transformation to unfold.  Its key elements include purpose, values, culture, networks, objectives…

Jeffrey Beeson speaking about leadership stratregy

The common denominator for all three levels is energy.  What leaders do – is unleash the energy in individuals, teams and organizations.

“How do you know you have won? When the energy is coming the other way and when your people are visibly growing individually and as a group.”

Sir John Harvey-Jones – former Chairman of Imperial Chemical Industries