Changing Architecture to Change Culture
Keep in mind that culture is not something you can change directly. It is powerfully influenced by the four elements of organizational architecture, as well as by leadership behaviors. The implication is that to change the culture, you need to change the architecture as well as reinforce what you’re trying to do with the right leadership.
One example is changing the metrics by which you judge success and then aligning employees’ objectives and incentives with those new measures. For instance, consider changing the balance between individual and group incentives. Does success require people to work closely and coordinate with one another—for example, in a new-product development team? If so, then put more weight on group incentives. Do people in your group operate independently—for example, in a sales unit? If so, and if their individual contributions to the business can be measured, then place more emphasis on individual incentives.
Getting Aligned
Draw on all the analyses discussed in this chapter to develop a plan for aligning your organization. If you’re repeatedly frustrated in your efforts to get people to adopt more productive behaviors, step back and ask whether organizational misalignments might be creating problems.
ACHIEVE ALIGNMENT—CHECKLIST
What are your observations about misalignments among strategic direction, structure, processes, and skills? How will you dig deeper to confirm or refine your impressions?
What decisions about customers, capital, capabilities, and commitments do you need to make? How and when will you make these decisions?
What is your current assessment of the coherence of the organization’s strategic direction? Of its adequacy? What are your current thoughts about changing direction?
What are the strengths and weaknesses of the organization’s structure? What potential structural changes are you thinking about?
What are the core processes in your organization? How well are they performing? What are your priorities for process improvement?
What skill gaps and underutilized resources have you identified? What are your priorities for strengthening key skill bases?
CHAPTER 7
Build Your Team
When Liam Geffen was appointed to lead a troubled business unit of a process automation company, he knew he was in for an uphill climb. The extent of the challenge became clearer when he read the previous year’s performance evaluations for his new team. Everyone was either outstanding or marginal; there was nobody in between. It seemed his predecessor had played favorites.
Conversations with his new direct reports and a thorough review of operating results confirmed Liam’s suspicion that the performance evaluations were skewed. In particular, the VP of marketing seemed reasonably competent but by no means a minor god. Unfortunately, he believed his own press. The VP of sales struck Liam as a solid performer who had been scapegoated for poor judgment calls by Liam’s predecessor. The relationship between marketing and sales was understandably tense.
Liam recognized that one or both of the VPs would probably have to go. He met with each of them separately and bluntly told them how he viewed their performance ratings. He then laid out detailed two-month plans for each. Meanwhile, he and his VP for human resources quietly launched outside searches for both positions. Liam also held skip-level meetings with midlevel people to assess the depth of talent and to look for promising candidates for the top jobs.
By the end of his third month, Liam had signaled to the marketing VP that he would not make it; he soon left and was replaced by one of his direct reports. Meanwhile, the head of sales had risen to Liam’s challenge. Now Liam was confident he had strong performers in these two key positions and was ready to move forward.
Liam recognized that he couldn’t afford to have the wrong people on his team. If, like most new leaders, you inherit a group of direct reports, it is essential to build your team to marshal the talent you need to achieve superior results. The most important decisions you make in your first 90 days will probably be about people. If you succeed in creating a high-performance team, you can exert tremendous leverage in value creation. If not, you will face severe difficulties, for no leader can hope to achieve much alone. Bad early personnel choices will almost certainly haunt you.
But even though finding the right people is essential, it is not enough. Begin by assessing existing team members (direct and indirect reports) to decide what changes you need to make. Then devise a plan for getting new people and moving the people you retain into the right positions—without doing too much damage to short-term performance in the process. Even this is not enough. You still need to align and motivate your team members to propel them in desired directions. Finally, you must establish new processes to promote teamwork.
Avoiding Common Traps
Many new leaders stumble when it comes to building their teams. The result may be a significant delay in reaching the break-even point, or it may be outright derailment. These are some of the characteristic traps into which you can fall:
Criticizing the previous leadership. There is nothing to be gained by criticizing the people who led the organization before you arrived. This doesn’t mean that you need to condone poor past performance, nor does it mean that you can’t highlight problems. Of course you need to evaluate the impact of previous leadership, but rather than point out others’ mistakes, concentrate on assessing current behavior and results and on making the changes necessary to support improved performance.
Keeping the existing team too long. Unless you are in a start-up, you do not get to build a team from scratch; you inherit a team and must mold it into what you need to achieve your A-item priorities. Some leaders make major changes in their teams too precipitously, but it is more common to keep people longer than is wise. Whether because they’re afflicted with hubris (“These people have not performed well because they lacked a leader like me”) or because they shy away from tough personnel calls, leaders end up with less-than-outstanding teams. This means they and the other strong performers must shoulder more of the load themselves. The extent of team change and the time frame for making shifts depends on the STARS situation you confront; it may be shorter in a turnaround, and longer in a realignment situation. Also, there may be constraints on your ability to make changes; you may have to accept that and figure out how to get the most out of the people you’ve inherited—for example, by defining roles. In any case, you should establish deadlines for reaching conclusions about your team and taking action within your 90-day plan, and then stick to them.
Not balancing stability and change. Building a team you’ve inherited is like repairing a leaky ship in mid-ocean. You will not reach your destination if you ignore the necessary repairs, but you do not want to try to change too much too fast and sink the ship. The key is to find the right balance between stability and change. First and foremost, focus only on truly high-priority personnel changes early on. If you can make do for a while with a B-player, then do so.
Not working on organizational alignment and team development in parallel. A ship’s captain cannot make the right choices about his crew without knowing the destination, the route, and the ship. Likewise, you can’t build your team in isolation from changes in strategic direction, structure, processes, and skill bases. Otherwise, you could end up with the right people in the wrong jobs. As figure 7-1 illustrates, your efforts to assess the organization and achieve alignment should go on in parallel with assessment of the team and necessary personnel changes.
Not holding on to the good people. One experienced manager shared hard-won lessons about the dangers of losing good people. “When you shake the tree,” she said, “good people can fall out, too.” Her point is that uncertainty about who will and will not be on the team can lead your best people to move elsewhere. Although there are constraints on what you can say about who will stay and who will go, you should look for ways to signal to the top performers that you recognize their capabilities. A little reassura
nce goes a long way.
Undertaking team building before the core is in place. It is tempting to launch team-building activities right away, but this approach poses a danger; it strengthens bonds in a group, some of whose members may be leaving. So avoid explicit team-building activities until the team you want is largely in place. This does not mean, of course, that you should avoid meeting as a group. Just keep the focus on the business.
Making implementation-dependent decisions too early. When successful implementation of key initiatives requires buy-in from your team, you should judiciously defer making decisions until the core members are in place. Of course there will be decisions you cannot afford to delay, but it can be counterproductive to make decisions that commit new people to courses of action they had no part in defining. Carefully weigh the benefits of moving quickly on major initiatives against the lost opportunity of gaining buy-in from the people you will bring on board later.
Trying to do it all yourself. Finally, keep in mind that restructuring a team is fraught with emotional, legal, and company policy complications. Do not try to undertake this on your own. Find out who can best advise you and help you chart a strategy. The support of a good HR person is indispensable to any effort to restructure a team.
FIGURE 7-1
Synchronizing architectural alignment and team restructuring
Assuming you avoid these traps, what do you need to do to build your team? Start by rigorously assessing the people you inherited, and then plan to evolve the team into what you need it to be. In parallel with this, work to align the team with your strategic direction and early-win priorities, and put in place the performance-management and decision-making processes you need to lead effectively.
Assessing Your Team
You likely will inherit some outstanding performers (A-players), some average ones (B-players), and some who are simply not up to the job (C-players). You will also inherit a group with its own internal dynamics and politics; some members may even have hoped for your job. During your first 30 to 60 days (depending on the STARS mix you inherited), you need to sort out who’s who, what roles people have played, and how the group has worked in the past.
Establish Your Evaluative Criteria
You will inevitably find yourself forming impressions of team members as you meet them and digest results and performance reviews. Don’t suppress these early reactions, but be sure to step back from them and undertake a more rigorous evaluation.
The starting point is to be conscious of the criteria you will explicitly or implicitly use to evaluate people who report to you. Consider these six criteria:
Competence. Does this person have the technical competence and experience to do the job effectively?
Judgment. Does this person exercise good judgment, especially under pressure or when faced with making sacrifices for the greater good?
Energy. Does this team member bring the right kind of energy to the job, or is she burned out or disengaged?
Focus. Is this person capable of setting priorities and sticking to them, or prone to riding off in all directions?
Relationships. Does this individual get along with others on the team and support collective decision making, or is he difficult to work with?
Trust. Can you trust this person to keep her word and follow through on commitments?
To get a quick read on the criteria you use, fill out table 7-1. Divide 100 points among the six criteria according to the relative weight you place on them when you evaluate direct reports. Record those numbers in the middle column, making sure they add up to 100. Now identify one of these criteria as your threshold issue, meaning that if a person does not meet a basic threshold on that dimension, nothing else matters. Label your threshold issue with an asterisk in the right-hand column.
TABLE 7-1
Assessment of evaluative criteria
Now step back. Does this analysis accurately represent the values you apply when you evaluate people on your team? If so, does it suggest any potential blind spots in the way you evaluate people? It is worthwhile to spend some time thinking about the criteria you will use. Having done so, you will be better prepared to make a rigorous and systematic evaluation.
Check Your Assumptions
Your assessments are likely to reflect assumptions you hold about what you can and can’t change in the people who work for you. If you score relationships low and judgment high, for example, you may think that relationships within your team are something you can influence, whereas you cannot influence judgment. Likewise, you may have designated trust as a threshold issue—many leaders do—because you believe you must be able to trust those who work for you and because you think trustworthiness is a trait that cannot be changed. You may be right in these assumptions, but it’s essential that you be conscious you are making them.
Factor In Functional Expertise
If you’re managing a team whose members have diverse functional expertise—such as marketing, finance, operations, and R&D—you need to get a handle on their competence in their respective areas. This task can be daunting, especially for first-time enterprise leaders. If you’re an insider, try to solicit the opinions of people you respect in each function who know the individuals on your team. (For more on the transition to enterprise leadership and its challenges, see Michael Watkins, “How Managers Become Leaders,” Harvard Business Review, June 2012.)
If you’re entering an enterprise leader role, consider developing your own templates for evaluating people in functions such as marketing, sales, finance, and operations. A good template includes function-specific key performance indicators (KPIs), what the KPIs should and should not show, key questions to ask, and warning signs. To develop each template, talk to experienced enterprise leaders about what they look for in these functions.
Factor In the Extent of Teamwork
The weights you apply in evaluation should vary depending on the work your direct reports are doing. Suppose, for example, that you’re taking a new job as vice president of sales, managing a geographically scattered group of regional sales managers. How would your criteria for evaluating this group differ from those you would apply if you had been named to lead a new-product development project?
These jobs differ sharply in the extent to which your direct reports operate independently. If your direct reports operate more or less independently, their capacity to work together will be far less important than if you were managing an interdependent product development team. In situations like this, it may be perfectly acceptable to have a high-performing group rather than a true team.
Factor In the STARS Mix
The criteria you apply may also depend on your STARS portfolio—the mix of start-up, turnaround, accelerated-growth, realignment, or sustaining-success situations you have inherited. In a sustaining-success situation, for example, you may have the time to develop one or two high-potential members of your team. It may be OK if they currently are B-players, if you are confident you can get them to the A-player level.1 In a turnaround, by contrast, you need people who can perform at the A-player level right away.
You also should evaluate people based on their STARS experience and capabilities as well as their match to the situation at hand. Suppose, for example, you’re taking over a business that was once very successful, started to slide, and wasn’t successfully realigned. Now you’ve been brought in to turn it around. You may have inherited people who would be A-performers in sustaining-success or realignment situations but who are not the types of leaders you need in a turnaround.
Factor In the Criticality of Positions
Finally, your evaluations of team members should depend on how critical their positions are. As you make your assessments, keep in mind it’s not only about players but also about positions.2 So take some time to assess how important the various positions held by your direct and indirect reports are to your success. If it helps, list the positions and assess the criticality of each on a 1–10 scale. Then keep these assessm
ents in mind as you evaluate the people you inherited.
It’s important to do this, because it takes a lot of energy to make changes on your team. It may be all right if you find that you have a B-player in a position that isn’t high on the critical list, but not at all acceptable if the position is critical.
Assess Your People
When you begin to assess each team member using the criteria and assessments of position criticality you have developed, the first test is whether any of them fail to meet your threshold requirements. If so, begin planning to replace them. However, merely surviving the basic hurdle does not mean they are keepers. Go on to the next step: evaluate their strengths and weaknesses, factoring in the relative value you assign to each criterion. Now who makes the grade, and who does not?
Meet one-on-one with each member of your new team as soon as possible. Depending on your style, these early meetings might take the form of informal discussions, formal reviews, or a combination, but your own preparation and focus should be standardized:
Prepare for each meeting. Review available personnel history, performance data, and other appraisals. Familiarize yourself with each person’s technical or professional skills so that you can assess how he functions on the team.
Create an interview template. Ask people the same set of questions, and see how their answers vary. Here are sample questions.
– What are the strengths and weaknesses of our existing strategy?
– What are the biggest challenges and opportunities facing us in the short term? In the medium term?
The First 90 Days, Updated and Expanded_Proven Strategies for Getting Up to Speed Faster and Smarter Page 14
