Paradoxes of leadership
Executives must come to grips with the paradoxes of leadership. First, an organization changes more easily when it doesn’t try to change everything. Second, it’s more likely to succeed if it both controls and empowers its employees. Finally, it should accept the variability and failure that accompany innovation.
In this article, we would like to focus on other paradoxes that, in my experience, are both particularly striking and quite difficult to reconcile. The first is that change comes about more easily and more quickly in organizations that keep some things stable. The second is that organizations are more likely to succeed if they simultaneously control and empower their employees. And the third is that business cultures that rightly encourage consistency (say, in the quality of services and products) must also allow for the sort of variability and even failure that goes with innovation and experimentation.
Coming to grips with these paradoxes will be invaluable for executives trying to keep their people and priorities in balance at a time when cultural and leadership change sometimes seems an existential imperative.
Change and stability
Organizational change, obviously, is often imperative in response to emerging customer demands, new regulations, and fresh competitive threats
Our automotive company, which I’m familiar with, buffeted by two different owners and three different CEOs in the last decade, has recently embraced this paradox with a new management model dubbed “balance,” a word loaded with meaning in the automotive industry because of its association with reducing drag and increasing speed. The simple idea behind the model is that any changes to a company’s systems, structures, and processes should always be introduced in a consistent way, typically quarterly, as part of an explicit change package. If a proposed change isn’t ready in time for one of these regular releases, it is either deferred to the next one or abandoned.
Previously, leaders of each of the company’s functions had been inclined to introduce, on their own, changes they thought might generate value for example, finance would launch a program to make costs variable, HR would announce an initiative to shake up performance management and compensation, and manufacturing would bring in new vendor-management systems. Hapless middle managers found themselves in a blizzard of change that made it difficult to focus on the organization’s top priorities. Now, before change programs are rolled out more broadly, all of them are integrated, and the resulting complexities are addressed at the top of the organization.
In this way, the company’s underlying operating model has remained more stable than it would otherwise have been, and more stable than it used to be when changes were announced in an uncoordinated fashion. Managers now understand and accept the rhythm of change, while managers and employees alike have gained new confidence that the different elements in the releases will be complementary and coherent.
Control and empowerment
This company’s solution was to introduce an “envelope” leadership approach, which first involved defining a set of borders. Employees could not go beyond them, but within them there was almost complete freedom to innovate and grow. Other businesses have attempted to copy the envelope idea but few have had the success of this global technology company, whose approach had real teeth. The flame of empowerment was fanned by first identifying some 15 leaders with the best capabilities and then rotating them around different businesses, with a mandate to shake things up. Meanwhile, the company’s purpose, vision, mission, and values were all rewritten and drilled into leaders. Its “signature processes” (five core ones, where it aspired to be truly differentiated) were fundamentally reimagined. And evaluation and reward mechanisms were dramatically tightened to reward stars and actively manage people who seemed to be struggling. As the company added a greater degree of empowerment to the stricter controls plates both balanced and spinning its performance improved. Sales are growing again, and fresh energy is palpable throughout the organization.
Consistency and variability
Producing high quality products and delivering them to customers on time and with the same level of consistency at every point in the value chain is critical to success in most industries. Variability is wasteful and time consuming, not to mention potentially alienating for customers. Most organizations therefore applaud behavior that attacks and eliminates it.
The solution the company devised combined building “slack” (additional people) into its resourcing a bold move in austere times with a direct attack on negative behavior. The worst offenders were removed, and it was made clear that cage fighting attitudes were unacceptable.
We had M/s Andersen Consulting as partners, as a major business process reengineering initiative as a continuous and regular action or succession of actions, taking place or carried on in a different manner, and leading to the accomplishment of results, a continuous operations or a series of operations and in its simplest form a process has an input and an output and is made of a sequence of individual task through which this input passes to become an output.
