by Yves Morieux
4. For more on this theme, see Yves Morieux, “Knowledge: The Basis of Adaptive Advantage,” in Management in the Knowledge Economy: New Managerial Models for Success, eds. Ludovic Dibiaggio and Pierre-Xavier Meschi (Paris: Pearson, 2012).
5. In many cases either the incentive is too weak and has no effect or the incentive is significant, in which case the individual’s problem becomes to earn the incentives rather than doing his or her job (which always contains more than metrics can capture). Therefore the incentive either is useless or pushes the individual to deviate from the optimal solution to the job’s problems. The rational behavior becomes to hide, work around, or even cheat in order to earn the incentive. Hence the need for more rules and controls. This is why simple rules four and five are so important: feedback loops are directly embedded in the tasks and activities and directly gratify or penalize people, depending on whether they do well or not. The rules create a context that makes it individually useful for people to do what they have to do. As you will see, simple rule six involves indirect feedback loops based on management evaluation, but the rule changes the context so that being transparent instead of hiding or workarounds becomes a rational behavior for people.
6. After working in the after-sales network, some engineers would then move to a new role, typically in marketing, while others would go back to engineering in a job with more responsibilities. The length of stay in the after-sales network varied according to these situations and also according to the engineer’s age and seniority, but usually ranged from three to five years. A few stayed longer and even progressed through the after-sales organization.
7. Our research shows that a company with an age pyramid similar to that of the US workforce can regain the engagement of those over forty-five by extending the shadow of the future. They can also use one-fifth of the time of workers over fifty-two to reduce the ramp-up period of junior workers by 5 percent. In doing so, productivity would likely increase by more than 8 percent. See Yves Morieux, “The Unretired,” BCG Perspectives, February 2007, http://www.bcg.com.
Chapter Six
1. Jørgen Vig Knudstorp said this to Yves Morieux on June 17, 2011, as we were discussing simple rule six. We thank him for his permission.
2. John Rawls, A Theory of Justice (Cambridge, MA: Belknap Press, 1971).
Acknowledgments
Yves Morieux: I am grateful to the late Michel Crozier, whose passion inspired me when I was a student at the Institut d’Études Politiques in Paris and later in our joint work together. My thanks also to Michael Baker for advising me to study industrial markets from the perspective of decision analysis when I was a student at Strathclyde University in Glasgow. I am grateful, too, to Carl Stern and Rafael Cerezo for their encouragement when they were, respectively, Boston Consulting Group CEO and BCG Europe chairman, and to Hans-Paul Buerkner, current BCG chairman, for creating the fellowship program that provided BCG’s Institute for Organi-zation with the resources to understand and tackle the evolution of complexity. Thanks also to Olivia Davies, organization analyst at the Institute, for her dedication in helping reconcile research data and manuscript text. I am indebted to my BCG colleagues for their ideas and their willingness to work with me on the research and cases described in this book—thank you one and all. I wish to thank the men and women who worked with me across more than forty countries and five hundred client companies. I also thank my uncle, Emmanuel Saurin, a great business leader who taught me so much, and my parents Charles and Lydia who inspired me.
Peter Tollman: This book is dedicated to my loving parents, Ted and Shirley, architect and psychologist, who, through their own passions and perspectives, imbued in me a lifelong yearning for meaning, aesthetics, and symmetry. My fascination with behavioral dynamics as a driver of organizational effectiveness derives from these factors. My closest laboratory has been my own home, held together by my wonderful wife, Linda, and two exceptional daughters, Jess and Sarah. These three women have graciously supported and encouraged the peculiarities of my work habits and, through thoughtful criticism and lively debate, have added their unique wisdom to my thinking. Finally, the Boston Consulting Group is both a highly effective organization in itself and the best learning environment one could hope for. I’m deeply grateful for my years with BCG and for the support I’ve received along the way from colleagues too numerous to mention.
Together, we wish to express our deepest gratitude to John Butman. John has followed the formation of these ideas for many years and also helped, through his patience and collabo-ration, make this book a reality. We are also indebted to BCG’s editor-in-chief, Simon Targett, who kept the book on track despite the many obstacles consulting work puts in the way of writing. We want to thank BCG’s Bob Howard, whose editing insights were invaluable at critical stages. We also want to assure the five anonymous peer reviewers of the manuscript that they have our gratitude for their insightful remarks, encouragement, and thoroughness. Melinda Merino, executive editor of Harvard Business Review Press, in her tactful yet firm direction, made sure that the necessary and sufficient points came through clearly in the book; thank you, Melinda. Rich Lesser, as BCG CEO, and Andrew Dyer and Grant Freeland, the former and current BCG People and Organization Practice leaders, are also deserving of our deepest thanks for their continuous support.
About the Authors
Yves Morieux is a senior partner and managing director in the Washington, DC, office of The Boston Consulting Group (BCG). As director of the BCG Institute for Organization and a BCG Fellow, he divides his time between leading research and advising senior executives of multinational corporations and public-sector entities in the United States, Europe, and Asia-Pacific on their strategies and organizational transformations.
Yves has contributed to the development of organization theory relating to the behavioral and structural conditions for economic value creation and competitive advantage. Turning these insights into practice with the simple rules, he has helped CEOs with their most critical challenges, for instance, moving their companies from quasi bankruptcy to industry leadership, or transforming the business model and culture to reach new heights, or successfully managing groundbreaking innovations.
Yves serves on the advisory boards of two professional journals, has spoken at more than a hundred business conferences, and lectured in various universities worldwide. He has pub-lished several book chapters, edited a book on strategy and technology, and written articles in peer-reviewed as well as business journals. He has been interviewed and quoted extensively on television and in global publications, including the Economist, as an expert on the evolution of organizations. He is frequently sought out by national media in mature or rapidly developing economies to explain the implications of his work for their own companies.
Yves holds a PhD in industrial marketing from the University of Strathclyde in Scotland and a DEA in decision analysis and organizational sociology from the Paris Institute of Political Science (Sciences Po). He also attended the Scottish Business School, SKEMA Business School, and the Salzburg Seminar in American Studies. He lives in the Washington, DC, area.
Peter Tollman is a Boston-based senior partner and managing director at The Boston Consulting Group, which he joined in 1989. He leads BCG’s People and Organization practice in North America. Prior leadership roles have included global leadership of BCG’s Biopharmaceuticals sector and its R&D topic. He holds a PhD in engineering from the University of Cape Town, South Africa, and an MBA with distinction from Columbia Business School. Peter is an invited speaker at many company and industry conferences, and has authored a number of works on leadership, organization, and corporate performance.
As one of BCG’s most experienced client-service partners, Peter has helped many of the world’s leading corporations improve the competitiveness and performance of their organizations. His work has spanned the globe and involved a wide range of assignments, including organization restructurings, governance redesigns, culture change, workforce
engagement, shareholder value and growth-enhancement initiatives, improvements to operational effectiveness and key processes, postmerger integrations, enterprisewide transformations, and guidance of CEOs and other senior leaders through leadership transitions. He has helped clients gain insight from and successfully apply the simple rules across many of these efforts.
In addition to his BCG work, Peter was a founding managing director of MPM Capital, a healthcare venture capital company. He sits on the board of governors of the Jerusalem Academy of Music and Dance at the Hebrew University and is a trustee of Walnut Hill School for the Arts. Peter lives in the Boston area with his wife, Linda Kaplan, MD, and their two college-age daughters, Jessica and Sarah.
