Sustainability of Management Tools

The sustainability of any management tool is based on its integrity. Its death comes when senior management simply chooses to ignore the management tool or its outcome as it suits their personal agenda. “I promised the investors we would have ten blockbuster+ candidates in the pipeline, and I don’t care if that candidate failed Trial by Jury+. Push it forward.” Much better the tool never had been used. The damage wrought goes far beyond the sustainability of the tool: individuals learn to disrespect all tools. Man the participant turns to WIIFM+.

It’s inevitable these breaches will occur and breaches usually involve very senior level executives. The executive will claim there is an immediate need to “assuage the rising anxieties of the investors ... the ‘good’ that comes from keeping the money flowing will far outweigh this one exception to the rules.” These investor anxieties of course came from the over-exuberant promises made earlier by the same senior executive.

The original peccadillo, a hastily made promise by the senior level executive, cascades into a sequence of events that puts in jeopardy all future actions: peccadillo → breach → disrespect for tools → hedging, legalism+, distrust, sabotage, etc.

We discussed earlier how to protect World Class R&D overall. Here we discuss protection of management tools from individual rogue managers. Many of the same lessons apply. We look for the means to anticipate, prevent, detect and react to breaches. The top priority is to protect the integrity of management tools, and consequently the culture of respect for management tools.

Note: readers familiar with Sarbanes-Oxley protections in corporate governance will recognize the arguments below.

Anticipate

We seek timely identification and assessment of existing threats and vulnerabilities, and use them to predict breaches. We examine past breaches, both our own and in other companies. We look for antecedents to those breaches: business situations or personal circumstances leading to the breach. Increase vigilance for potential breaches as our team approaches Key Behavioral Moments+ (e.g., key decision points). Walk the halls looking (with a trained eye) for signals+ of breakdown that could lead to a temptation to breach.

Prevent

We build protections into the management tools themselves. For example, the verdict of a Trial by Jury is immediately and broadly communicated. We leave no cover-of-darkness in which the temptation to breach can hatch.

We build and nurture senior level advocates for the management tools themselves. These are individuals who see their own personal advancement as being tied to the integrity of the tool. For example, the head of Independent Evaluation+ (one of our recommended tools) has a vested interest in the integrity of the findings and consequences coming from these evaluations.

We insist on a work ethic that highly values contingency planning. Plan B must always be in place. We don’t want senior managers pushing forecasts forward based on a hope and a prayer. If Product A doesn’t succeed, then there must be a Product B in the wings.

Detect

We deliberately build competing interest groups: individuals with comparable power bases on both sides of the equation. Each side will greatly care about the outcome of the management tool. Every outcome has winners and losers, and the consequences are personal to individuals on each side of the equation. Breaches are detected and alarms raised by interested parties.

React

Individuals are made whole for any damages suffered in the event of a breach. We estimate the damages and the party responsible for the breach ponies up the reparations. We ensure the perpetrator reaffirms his or her support of the management tool, issues a public apology, and puts in place additional mechanisms to forestall future breaches. This is personal. The downside of getting caught at a breach (which is highly likely) must be publicly seen to outweigh any personal benefit gained from committing the breach.

Similar to discussions for the overall protection of R&D, responses to breaches are proportional and escalating. Autonomous mechanisms, those we rely on to handle 80% of our behaviors, must be protected. Interventional mechanisms, directed at the miscreant in the case of a breach, are automatic in their application. Interventional mechanisms are personal, forceful and highly consequential for recipients.

Management Tools and Techniques are integral to any organizational form: they give substance to the form. Their domain is the Investible Unit. We expect parties within the Investible Unit to be responsible for (and supportive of) the integrity of their own management tools & techniques.

Managers disregarding their own tools & techniques will likely see sub-optimal performance in their Investible Unit, the result of an organizational form gone bad. There is no Big Brother to intervene in these breaches – each Investible Unit stands on its own. However Big Brother conducts a performance assessment across all Investible Units+. Individual breaches within the Investible Unit are not directly ‘corrected’ by Big Brother, but they eventually do come home to roost in the form of sub-standard performance ratings.


Editor's Picks for January, 2011