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| Home - Industry Article - Nov 02 Issue |
Looking at Failure
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Moving from Alignment to Accountability (#6 to #7)
The prior failure mode has to do with rejection of new strategy by the organization protecting its turf. This major failure mode is far more onerous. Instead of the organization stifling growth from the bottom-up, in this case the senior executive team actually ends-up forcing inauthentic decisions from the top-down, and then fails to take accountability for execution. While this may seem improbable, even with best of intentions it actually happens far more frequently than most would think.
Consider the following scenario: first, a new strategy and business plan is developed. A small organization is put into place to roll-out the new business, and the business team has been recruited. Goals and success metrics are put into place and the business unit and executive team are aligned regarding goals and metrics. The team begins executing. But 30 days into the plan the chief executive pulls resources away from the business in order to attack a major new business opportunity. To protests, she acknowledges that this will cause a delay, but points out that the corporation really needs to take advantage of this opportunity. Because the new business plan has been agreed to and funds appropriated, neither quotas or dates for the new business and team are changed. The expectation is that the team will rally to support the corporation.
As a rare event this is not a problem. But when the core business is not achieving success, top management continues to be under performance pressure by stockholders and the board, and this scenario can get repeated over and over again. Resources get systematically pulled into and out of the new business effort due to other pressing issues, and alignment becomes a charade.
Another version of this is what Ichak Adizes calls in his book Corporate Lifecycles, “the Founders Trap.” In Adizes’ scenario, a chief executive appoints a business unit head and gives him complete authority to manage the operation. However, what the chief executive generally fails to mention is the following statement: “…as long as you do it the way I would have if I was managing it…” What results is downward micro management and regular change in direction that demoralizes the new business group. This is so common in the life cycle of a new business and visionary CEO that Adezes gives it the name “founder’s trap.”
In both cases, whether resources are systematically pulled from the team to fight fires, or the team struggles with founder-management problems, the results are predictable. New business teams pretend that their plans are doable, while they know they likely are not because of executive support. Executives pretend to support the new strategy when they know they may not be able to, and reporting managers capitulate to changes in direction by the executive under quiet duress. The behavior rapidly turns into a culture where truth is the first casualty. Representations rarely reflect actual intentions, and alignment is non-existent. The disease of consensual hallucination progresses.
What is deeply debilitating about this scenario is that no strategy, operations plan or process can solve the problem. Below the senior executive team functional managers can not directly solve the problem. So cliques form, internal and unhealthy competition thrives. As the new business does not meet expectations, the business increasingly relies on heroic savior by talented individuals. But eventually these saves can not be repeated. Senior management is eventually replaced, but the culture has been created that is difficult to change. The company drifts from crisis to crisis until a final one does it in.
These examples are painful to think about. They set off the wrong sort of brain chemistry to dwell upon. But it’s only by honestly evaluating past failures that you can avoid them in the future. How we deal with it is just a measure of character. If you are lucky enough to have never failed at anything – congratulations! Publish a book. But then ask a friend for advise. From my own perspective, I’d rather have a team led by someone that has failed, rebounded and learned from it. The alternative is to bet totally on smarts and luck just winning the day.
Wouldn’t life be so much simpler if business really worked that way?
A Managing Director with The Chasm Group since 1995, Michael Tanner provides advisory and consulting services in the areas of market development strategy, building competitive advantage, positioning and new business planning. His clients are in the IT infrastructure, B2B and communications technology markets. Michael is also a regular keynoter at both public seminars and corporate events in the US and Europe where he speaks on topics of strategy, competitive advantage and managing for shareholder value. Michael can be reached at: mtanner@chasmgroup.com.
 
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