Recently, many of us have been enthralled watching World Cup football. For me, it brought home a graphic example for an article on organizational design I have been working on for a year.
In the first game the U.S. team played against Ghana, their star striker, Jozy Altidore, went down with a tournament-ending leg muscle injury. The U.S. had no replacement for Jozy’s offensive capabilities. They replaced Altidore with a defensive mid-fielder, counted on only one striker and altered their strategy for the rest of their games to be purely defensive. The U.S. team’s star performer became their goalie that made a record 16 saves in their last game—a one-goal loss to Belgium. They didn’t win another 2014 World Cup game after Jozy was hurt, came in dead-last of all teams in time of possession (a metric of dominance) and were eliminated from the tournament.
Their coach (the sports equivalent to a CEO), Jurgen Klinsmann, could do nothing except cheer and show confidence. He urged his team to show more offense but their scoring talent and attitude was not up to the challenge. In the U.S.’s case, the talent and skills of players on the field reflected the outcome, not the coach’s wishes. The U.S. became an unbalanced, defensibly minded team—a strategy that rarely wins over time, and was evident at the 2014 World Cup.
The coach’s real job began well before the games when he chose the talent for the team. Jurgen simply did not select enough offensive talent to achieve balance. He opted for just a couple of scorers. This same thinking can be true in companies.
Corporations that are similar in their rationale are reflected in the balance of “players they put on the field.” The “players” are the key leaders who control the company’s attitude, and among them, a proper balance of offensive and defense is required to be effective. It is the job of the CEO to ensure that balance is maintained. If not, the company either does not grow by over-managing itself (too defensive), or grows and does not make much money (too offensive). When unbalance is detected, the only real solution is replacing some leaders to re-stabilize the team. Many who need to be replaced have not necessarily failed in what they do best, but need to be substituted with individuals touting different strengths to create the winning balance. None of the existing players will volunteer to be substituted, leaving it to the CEO to execute difficult lineup changes, which requires great courage; feel for the business and organizational understanding.
One of my favorite organizational design quotes is by the great ex-New York Yankee baseball manager, Casey Stengel. When asked about his organizational management philosophy, he said: “Keep the five guys who hate you away from the five guys who have not made up their minds.” Although Casey was probably “tongue-in-cheek” with his humor, there is an underlying truth to the makeup of effective management teams.
Today, I work predominantly with smaller and younger companies. Within those companies, there are not many people in the decision hierarchy, and little, if any, corporate politics. For me, that creates refreshing simplicity. But in larger and older organizations, the influential operational team of a company can consist of 10 to 15 people including some staff and line management people who have a voice and influence in the direction and view of the company. The prevailing attitude (offensive or defensive) that comes out of that blended team is similar to a sports team.
In larger companies, I would generally categorize the executive management players into three groups:
First, there are the “Restless Growers.” These individuals usually are not satisfied with the present. They constantly challenge the company to be more aggressive. They are very competitive in requesting evolution in the offerings and present clientele. Often these Restless Growers see success in top-line revenue growth or positive competitive comparison of size, so are not the best commercial managers. They will take less profitable jobs just to win. Their organizations are often under-managed. As a result, there is usually waste and inefficiencies in their operations that are overshadowed by the growth. Morale in growing organizations is high and these managers are popular with subordinates. People feel the momentum and promotions are plentiful. Even if budgeted profit is not made in one year, there is the promise that the growing backlog will create it the next year.
Next, there are the “Bureaucratic Managers” who emphasize management efficiency. I don’t mean to use ‘bureaucratic’ in the negative connotation here, rather, the internalizing orientation of their interest in process, control and order. They advocate for doing things better internally rather than through re-invention of the firm’s offerings. Often, these individuals are the better business process managers and problem solvers of the company. They measure success by both profit margin and their personal power of influence. The Bureaucratic Managers always downplay the impact of both key growers’ departures and competitive comparisons. They blame low growth rates on uncontrollable outside influences. They can be ruthless on newcomers who threaten the power balance. These managers are often unpopular with their subordinates who feel stifled with limited opportunity. In these manager’s minds, cost cutting is seen as the only strategy.
Finally, there are the “Good Scout Followers” who are along for the ride and just trying to fit in and do their job. They don’t influence much change, nor do they want to. These people see job satisfaction as being a contributing part of the team. They are not in a company to rock the boat. The Good Scout Followers offer value to the firm by maintaining the culture well; they give stability, stroke the top leader and provide continuity to subordinate staffs. They think everything is going well, regardless of the defensive or offensive attitude of the firm.
Each group adds positives to the whole, while also creating a personality risk for the enterprise.
In short, the Bureaucratic Managers are attracted to process discipline, lowering costs, and raising efficiency to the extent that they regard it as a strategic initiative. On the other hand, the Restless Growers are primarily externally oriented and focus on new bundling of services, hiring key competitor talent, client service improvement and innovation. The Good Scout Followers go along with the group consensus and perform their job within those guidelines. Organizational psychologists talk about the fact that only a few people control the resultant attitude because the attitude winner of either management or growth is usually an influential majority.
For good health of an organization, it is essential to have a blend made up of individuals from each group. Having a majority of any one type would lead to chaos or eventual decay. Imagine if most of the management team were the Restless Growers—there would be numerous disjointed initiatives and very little attention to how things are done. Profit would be mediocre. At the same time, you could never see a high technology company being competitive being predominantly run by Bureaucratic Managers. High technology companies have to operate at what has been called “Holy S… Speed,” and need change agents rather than controllers and cost cutters. The faster the evolution of the industry the more emphasis has to be placed on innovation, risk taking and growth.
When you have a team of different types, one group always emerges as having the most influence on the direction of the company. Sometimes that influence results in an unhealthy unbalance. The most aging situation for a company in this contemporary fast world is when Bureaucratic Managers take over and turn the company inward. The faster the changes are happening within the industry, the more deadly the effect. This situation is doubly concerning because it is the hardest to reverse and re-balance once it happens. The Bureaucratic Managers are experts at maintaining the status quo by exaggerating the risks of change. They are natural politicians. They also claim success if they increase margins, but stay quiet about the sacrifice of top-line growth. These individuals feel placated that being “well run” is sufficient. Worse than anything, if the Bureaucratic Managers take over, the Restless Growers get frustrated and leave because patience is not their virtue. This has a spiral effect resulting in a dangerous tilt toward the Bureaucratic Managers. The company ever increasingly becomes inwardly oriented, political and stagnant.
However, cultural changes evolve slowly and it is often hard to detect while you are participating in daily problem solving. CEOs’ lack of awareness of the problem is a frequent issue. They can sense the symptoms but can’t put their finger on the cause. There is a set of clear indicators when the imbalance occurs. Some indicators are: lack of, or reduced revenue growth and key younger growth advocates leave the company to competitors. Regardless of the intent of the team agendas, management meetings gravitate to discussions about cost, risk and quality control instead of marketing, key hiring and product development. Very few new senior people are hired and invited to the inside circle of top management meetings. When these symptoms occur, the CEO should get the idea that an imbalance does exist. After awareness is realized, the real challenge is changing it.
When the Bureaucratic Manager imbalance realizes itself, getting back in balance takes enormous courage and determination. Adding new Restless Grower players on the team who can influence will be highly resisted. Also, through the conservative reputation your company has gained, it is difficult to recruit them from the outside. Promoting younger talent is problematic because it takes years for them to become an equal “weight of voice” within the realm of company decision-makers.
But change from a Bureaucratic Manager imbalance is the CEO’s responsibility and will dictate the end result of their CEO legacy. Their legacy will be either creating a more youthful, agile and competitive company or allowing the enterprise to become an older, stagnant and antiquated enterprise. The CEO is totally in charge of the line-up card, but loses control once the game begins. Rarely does it work that the goalie becomes the most important player in the business games.
So maybe Casey was right and not totally joking? It’s managing personalities and capabilities that is the key to success.
For U.S. football aspirations, I also hope Jozy, plus two or three other talented strikers, are ready for the next World Cup. I doubt Klinsmann will make that mistake twice. His legacy will depend on his team outscoring their opponents.
© 2014 Robert Uhler and THE UHLER GROUP. All rights reserved.