Results – a hidden gem of a business book

“Results: Keep what’s good, fix what’s wrong, and unlock great performance” by Gary L. Neilson and Bruce A. Pasternack was written in 2005, and never made the best selling big time (buy it at Amazon.co.uk or Kalahari.net). A search for it online produces very few hits, and no summaries (except a HBR article from 2008, which was written by Neilson and two colleagues from Booz & Co). I cannot understand why. This book is a gem. We’ve used it for the last four years in our company to great effect, and have used it with many of our clients. Almost every time we do it results (excuse the pun) in superb results.

The heart of the book revolves around research that comes out of Booz & Co, and identifies four key building blocks of organizational DNA. The four factors combine in different ways in different companies, producing seven different corporate cultures. Most clients we have worked with find that one of these types uncannily describes their internal business culture – and helps put a finger on things are getting in the way of real results. Having identified which corporate culture you’re dealing with, you can then use actions linked to the four building blocks to move your company to a results-oriented entity.

The Four Building Blocks

These building blocks must be dealt with in the following order:

Decision rights – who gets to decide what.
This is about knowing what the decision making processes are, who has authority and how it is used, , and about identifying where authority areas overlap or leave gaps. It’s also about doing all you can to narrow the gap between responsibility and authority. It’s about understanding – and agreeing – who does what, how and why. Decision rights determine who is responsible for what choices.

Good questions to ask: Who decides what? How many people are involved in the decision making process? Where does one person’s decision-making authority end and another’s begin? Do decision makers have the appropriate authority levels? Are they held accountable for their decisions?

Information – what we need to know.
This means identifying critical information required to make correct decisions and ensuring that it is in the hands of the appropriate decision makers when they need it. Information is all the data, metrics, knowledge, and co-ordinating mechanisms resident in various corners of the organization. There is a danger of both too little and too much information, as well as issues related to timing and authority. Sharing information

Good questions to ask: How is performance measured? What is measured, and what effect does this have on activities? How are activities co-ordinated and knowledge transferred? How do people with information or ideas make these known? How are expectations and progress communicated? Who knows what? Who needs to know what? How does information get from the people who have it to the people who know it?

Motivators – how we get ahead around here.
Motivators are more than money – they are all the objectives, incentives, perks, recognition and opportunities that prompt people to care and achieve. They should motivate employees to align their goals with that of the organization, and must support the organization’s objectives.

Good questions to ask: What objectives, incentives, and career alternatives do people have? How are they rewarded – financially and nonfinancially – for what they achieve? What are they encouraged to care about, by whatever means, explicit or implicit? Are their goals aligned with the organization’s goals?

Structure – where I (we) fit in.
Structure is the most obvious element of the building blocks of organizational DNA, and is therefore often dealt with first. This would be a mistake. Structure should be the logical outcome of the choices made regarding the other three building blocks. Structure, in principle, should follow strategy.

Good questions to ask: What does the organizational hierarchy look like? How are the lines and boxes in the organizational chart connected? How many are in the hierarchy, and how many direct reports does each layer have?

These four elements are not independent and work together in a systemic way.

“The right people – imbued with the right values, armed with the right information, and motivated by the right incentives – are the driving force behind a winning organization.” (p. 17)

Seven Organizational Types

I have this summary on file, and am not sure of its source:

Passive-Aggressive – in this organization everyone agrees on the surface, but nothing happens because that is how disagreement is communicated. Internal resistance defeats the leadership’s initiatives and implementing change is nearly impossible.

Symptoms: dissenting feelings are masked, decisions are second guessed, managers micromanage, information is closely held, things move slowly, and people are defensive and take measures to protect themselves.

Remedies: adjust how/who makes decisions, develop a system for sharing information throughout the organization, provide real motivators, and re-evaluate your organization’s structure. You will probably need to get outside help.

Fits-and-Starts: in this organization there are lots of ideas floating around, everyone has an entrepreneurial spirit; but everyone is pulling in a different direction.

Symptoms: decision makers can act freely, but they lack all the information they need to make good decisions. Revenues are inconsistent, business units act like independent businesses, there are differences in compensation between business units, performance appraisals are inconsistent and there is a lack of promotional practices.

Remedies: develop standard procedures, focus on the overall organizational goals and require accountability, centralize and consolidate decision authority at the top, establish consistent metrics and definitions, and reward collective behaviors.

Outgrown: in this organization is a good old boys club that forms as a result of outgrowing itself. Power is closely held at the top of the hierarchy. This organization is slow to respond to external threats and change.

Symptoms: Centralized management but decentralized information, slow response that often misses opportunities, the founders tend to have their hands in everything, employees tend to find ways to work around company rules and policies, and everyone knows the organization is becoming less effective but no one does anything about it.

Remedies: democratize decision making, disseminate information, provide career paths, allow business units greater autonomy, formalize the management model, and cultivate leadership at all levels within the organization.

Overmanaged: this is an organization that is so caught up in the details and analysis that they can’t move forward. Everyone is checking on someone else and only a select few are actually doing anything.

Symptoms: important strategic and operational decisions aren’t put into action, micromanagement is extreme, and the organizational hierarchy is heavy and multilayered.

Remedies: steam-line the decision making process, remove unnecessary layers in the hierarchy, delegate decision making to those closest to the end user, provide information throughout the organization, and build leaders throughout the organization.

Just-in-time: in this organization every thing is last minute and urgent. It is an organization that can respond to external threats and changes on the fly. This high flying environment can lead to early burn out and loss of intellectual capital.

Symptoms: chaotic operations, unnecessary reinvention of existing solutions, and a great sense of urgency and lots of fire fighting due to a lack of control and procedures.

Remedies: develop a structured decision making process, stop over promising and under delivering, organize your information for easy reference, introduce formal procedures and processes but don’t kill innovation and initiatives.

Military Precision: this organization prides itself on its ability to consistently and efficiently function. Unplanned for events are not handled well as this organization is slow moving and resistant to change.

Symptoms: the chain of command is clearly defined, highly centralized, and extremely consistent.

Remedies: ensure open communication occurs as needed rather than according to schedules, report the facts rather than what you think superiors want to hear, develop leaders throughout the organization, and don’t allow the organization to blindly follow routines.

Resilient: this organization is what most organization’s wish they could be. This type of organization seems to effortlessly achieve success.

Symptoms: the organization holds itself up against theoretical limits, commitments and accountability go hand in hand, establishes new stretch targets rather than allowing the status quo, trusts employees to make and execute effective decisions, able to bounce back from adverse circumstances, horizontal hierarchy, have internal self-correction mechanisms, listens to and responds to internal complaints, performance appraisals clearly differentiate between top and low performers, and never accepts current as the best we can do.

Remedies: none needed.

What to do next

Using this model allows you to firstly identify what type of organization you currently have, and then select what type you’d prefer to have. It then gives you the four DNA building blocks as tools to discover the levers that can be used to change organizational culture.

Booz & Co have made an excellent website available that lists specific actions and tasks that can be used to effect change in each of the given organizational types. Use the website at: http://www.simulator-orgeffectiveness.com/booz