This article is by Predictable Success Consultant Scott Propp.
We see it all over the headlines. Once powerful firms like Hewlett Packard, Microsoft, and General Motors slipping into The Big Rut. While others, like Yahoo, IBM and Walmart, are in or teetering on the edge of Treadmill.
We blame it on bureaucracy (and rightly so), but let’s take a moment to examine how firms get here, and how they can get out – as long as a Visionary leader is still on board.
Sowing the Seeds
The seeds of bureaucracy are planted during the Whitewater stage of the Predictable Success business cycle, when the Processor voice first appears. It is in Whitewater when complexity has overwhelmed the business, and the Processor has been brought in to take a systems view and set up sustainable repeatable processes for the firm’s core value delivery engines.
Examples of roles a Processor typically plays are CFO, CIO or perhaps EVP of quality. All of these roles are a step toward stemming the chaos that rapidly growing organizations are experiencing. When these individuals appear in Whitewater, and their skills are well applied, they have an effect of capturing complexity and putting in place positive practices to reduce the whipsaw feeling that the organization has. It’s when the addition of processes – which is necessary to get the firm into Predictable Success – goes too far that the strength becomes a weakness.
Too Much of a Good Thing
Once a solution to complexity is found, the tendency is to do more. It’s quite natural to keep adding processes and Processors because for a while it makes everything better. Almost imperceptibly, those tools that created positive and repeatable performance tip the organization towards lower responsiveness.
In deeper Treadmill, the value engines that are built by Processors begin to assume a life of their own. Optimizing the performance of the value engine becomes more visible and measurable to firm leaders, and the call to optimize now trumps the now smaller voice of the customer.
Once this tipping point is reached, it becomes a slippery slope indeed. There is always another optimization program that can be executed to further perfect that process, and the payback is so visible, with clear internal metrics, that it becomes a siren song to management, who hire still more Processors to staff these improvement processes.
Processes build systems that tend toward more specialization and less flexibility. As the firm begins to reject promising customer requests that would lead to process changes, the overall business atrophies, costs spiral, and revenues flatten.
I can vividly recall specific episodes with clients, where the operations team will (very) passionately argue that they cannot afford to alter their process to accommodate a very legitimate and profitable new product. When this is commonplace, it kills innovation in its tracks and ultimately sets the seeds for a slip into The Big Rut.
Restoring the Vision
It is at this point that the Visionary leader needs to step forward and execute a serious act of leadership. The most striking recent example is the resurgent vibrancy in Starbuck’s with the return of Howard Schultz. His visionary act of halting sales to reestablish the quality of the customer interface with baristas set a tone that is being reflected through the whole firm.
The goal of the work to escape Treadmill is fundamentally to restore the Visionary role in the enterprise. It is the Visionary that asks the directional questions, and makes sure action is taken to assure that the investments in process are aligned with the customers and not the firm’s internal interests.
The natural trend line of a firm is to drift from Predictable Success to rigidity and internal focus. When there is balance of Visionary, Operator and Processor, those directional changes are made to align with the market demand. To be clear, we do not want to remove all bureaucracy, but re-architect it to be built around the appropriate goals of service to the client.
The Path Back to Predictable Success
Here are the key next steps that an organization approaching (or in) Treadmill should take:
1. Get control of the mix of talent entering the organization. Be sure that a Visionary is involved in the hiring process at all steps, and if you are in deep Treadmill, personally sign off on all hires.
2. Be sure the new Visionary talent in the firm is deployed in a manner that assures those Visionary viewpoints will be heard and implemented.
A good best practice here is to set up a real mentoring program with other Visionaries in the firm to make sure that the new talent is not pulled into the smaller departmental narrative of process focus.
A second suggestion would be a regular series of skip level sessions, where a senior leader has a candid session with a group of newer talent to keep the lines of communication open.
3. Change the performance management system to focus on development and success rather than on failure and compliance.
4. Improve the training system of the firm to inject a dynamic dialogue built around how and why, rather than a system that is simply an information delivery system.
5. Build mentoring and coaching systems that encourage appropriate risk taking and experimentation.
6. Look carefully at the executive ownership and accountability and make sure it has a bias to real results and not compliance and activity.