It can be a frustrating exercise, but there are ways to increase its value.
Renée Dye and Olivier Sibony
2007 Number 3
In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process. For the better part of a year, they collect financial and operational data, make forecasts, and prepare lengthy presentations with the CEO and other senior managers about the future direction of the business. But at the end of this expensive and time-consuming process, many participants say they are frustrated by its lack of impact on either their own actions or the strategic direction of the company.
This sense of disappointment was captured in a recent McKinsey Quarterly survey of nearly 800 executives: just 45 percent of the respondents said they were satisfied with the strategic planning process.1 Moreover, only 23 percent indicated that major strategic decisions were made within its confines. Given these results, managers might well be tempted to jettison the planning process altogether.
But for those working in the overwhelming majority of corporations, the annual planning process plays an essential role. In addition to formulating at least some elements of a company’s strategy, the process results in a budget, which establishes the resource allocation map for the coming 12 to 18 months; sets financial and operating targets, often used to determine compensation metrics and to provide guidance for financial markets; and aligns the management team on its strategic priorities. The operative question for chief executives is how to make the planning process more effective—not whether it is the sole mechanism used to design strategy. CEOs know that strategy is often formulated through ad hoc meetings or brand reviews, or as a result of decisions about mergers and acquisitions.
Our research shows that formal strategic-planning processes play an important role in improving overall satisfaction with strategy development. That role can be seen in the responses of the 79 percent of managers who claimed that the formal planning process played a significant role in developing strategies and were satisfied with the approach of their companies, compared with only 21 percent of the respondents who felt that the process did not play a significant role.
Looked at another way, 51 percent of the respondents whose companies had no formal process were dissatisfied with their approach to the development of strategy, against only 20 percent of those at companies with a formal process.
So what can managers do to improve the process? There are many ways to conduct strategic planning, but determining the ideal method goes beyond the scope of this article. Instead we offer, from our research, five emergent ideas that executives can employ immediately to make existing processes run better. The changes we discuss here (such as a focus on important strategic issues or a connection to core-management processes) are the elements most linked with the satisfaction of employees and their perceptions of the significance of the process. These steps cannot guarantee that the right strategic decisions will be made or that strategy will be better executed, but by enhancing the planning process—and thus increasing satisfaction with the development of strategy—they will improve the odds for success.
Start with the issues
Ask CEOs what they think strategic planning should involve and they will talk about anticipating big challenges and spotting important trends. At many companies, however, this noble purpose has taken a backseat to rigid, data-driven processes dominated by the production of budgets and financial forecasts. If the calendar-based process is to play a more valuable role in a company’s overall strategy efforts, it must complement budgeting with a focus on strategic issues. In our experience, the first liberating change managers can make to improve the quality of the planning process is to begin it by deliberately and thoughtfully identifying and discussing the strategic issues that will have the greatest impact on future business performance.
Granted, an approach based on issues will not necessarily yield better strategic results. The music business, for instance, has discussed the threat posed by digital-file sharing for years without finding an effective way of dealing with the problem. But as a first step, identifying the key issues will ensure that management does not waste time and energy on less important topics.
We found a variety of practical ways in which companies can impose a fresh strategic perspective. For instance, the CEO of one large health care company asks the leaders of each business unit to imagine how a set of specific economic, social, and business trends will affect their businesses, as well as ways to capture the opportunities—or counter the threats—that these trends pose. Only after such an analysis and discussion do the leaders settle into the more typical planning exercises of financial forecasting and identifying strategic initiatives.
One consumer goods organization takes a more directed approach. The CEO, supported by the corporate-strategy function, compiles a list of three to six priorities for the coming year. Distributed to the managers responsible for functions, geographies, and brands, the list then becomes the basis for an offsite strategy-alignment meeting, where managers debate the implications of the priorities for their particular organizations. The corporate-strategy function summarizes the results, adds appropriate corporate targets, and shares them with the organization in the form of a strategy memo, which serves as the basis for more detailed strategic planning at the division and business-unit levels.
A packaged-goods company offers an even more tailored example. Every December the corporate senior-management team produces a list of ten strategic questions tailored to each of the three business units. The leaders of these businesses have six months to explore and debate the questions internally and to come up with answers. In June each unit convenes with the senior-management team in a one-day meeting to discuss proposed actions and reach decisions.
Some companies prefer to use a bottom-up rather than top-down process. We recently worked with a sales company to design a strategic-planning process that begins with in-depth interviews (involving all of the senior managers and selected corporate and business executives) to generate a list of the most important strategic issues facing the company. The senior-management team prioritizes the list and assigns managers to explore each issue and report back in four to six weeks. Such an approach can be especially valuable in companies where internal consensus building is an imperative.
Bring together the right people
An issues-based approach won’t do much good unless the most relevant people are involved in the debate. We found that survey respondents who were satisfied with the strategic-planning process rated it highly on dimensions such as including the most knowledgeable and influential participants, stimulating and challenging the participants’ thinking, and having honest, open discussions about difficult issues. In contrast, 27 percent of the dissatisfied respondents reported that their company’s strategic planning had not a single one of these virtues. Such results suggest that too many companies focus on the data-gathering and packaging elements of strategic planning and neglect the crucial interactive components.
Strategic conversations will have little impact if they involve only strategic planners from both the business unit and the corporate levels. One of our core beliefs is that those who carry out strategy should also develop it. The key strategy conversation should take place among corporate decision makers, business unit leaders, and people with expertise essential to the discussion. In addition to leading the corporate review, the CEO, aided by members of the executive team, should as a rule lead the strategy review for business units as well. The head of a business unit, supported by four to six people, should direct the discussion from its side of the table (see sidebar, "Things to ask in any business unit review").
One pharmaceutical company invites business unit leaders to take part in the strategy reviews of their peers in other units. This approach can help build a better understanding of the entire company and, especially, of the issues that span business units. The risk is that such interactions might constrain the honesty and vigor of the dialogue and put executives at the focus of the discussion on the defensive.
Corporate senior-management teams can dedicate only a few hours or at most a few days to a business unit under review. So team members should spend this time in challenging yet collaborative discussions with business unit leaders rather than trying to absorb many facts during the review itself. To provide some context for the discussion, best-practice companies disseminate important operational and financial information to the corporate review team well in advance of such sessions. This reading material should also tee up the most important issues facing the business and outline the proposed strategy, ensuring that the review team is prepared with well-thought-out questions. In our experience, the right 10 pages provide ample fuel to fire a vigorous discussion, but more than 25 pages will likely douse the level of energy or engagement in the room.
Adapt planning cycles to the needs of each business
Managers are justifiably concerned about the resources and time required to implement an issues-based strategic-planning approach. One easy—yet rarely adopted—solution is to free business units from the need to conduct this rigorous process every single year. In all but the most volatile, high-velocity industries, it is hard to imagine that a major strategic redirection will be necessary every planning cycle. In fact, forcing businesses to undertake this exercise annually is distracting and may even be detrimental. Managers need to focus on executing the last plan’s major initiatives, many of which can take 18 to 36 months to implement fully.
Some companies alternate the business units that undergo the complete strategic-planning process (as opposed to abbreviated annual updates of the existing plan). One media company, for example, requires individual business units to undertake strategic planning only every two or three years. This cadence enables the corporate senior-management team and its strategy group to devote more energy to the business units that are “at bat.” More important, it frees the corporate-strategy group to work directly with the senior team on critical issues that affect the entire company—issues such as developing an integrated digitization strategy and addressing unforeseen changes in the fast-moving digital-media landscape.
Other companies use trigger mechanisms to decide which business units will undergo a full strategic-planning exercise in a given year. One industrial company assigns each business unit a color-coded grade—green, yellow, or red—based on the unit’s success in executing the existing strategic plan. “Code red,” for example, would slate a business unit for a strategy review. Although many of the metrics that determine the grade are financial, some may be operational to provide a more complete assessment of the unit’s performance.
Freeing business units from participating in the strategic-planning process every year raises a caveat, however. When important changes in the external environment occur, senior managers must be able to engage with business units that are not under review and make major strategic decisions on an ad hoc basis. For instance, a major merger in any industry would prompt competitors in it to revisit their strategies. Indeed, one advantage of a tailored planning cycle is that it builds slack into the strategic-review system, enabling management to address unforeseen but pressing strategic issues as they arise.
Implement a strategic-performance-management system
In the end, many companies fail to execute the chosen strategy. More than a quarter of our survey respondents said that their companies had plans but no execution path. Forty-five percent reported that planning processes failed to track the execution of strategic initiatives. All this suggests that putting in place a system to measure and monitor their progress can greatly enhance the impact of the planning process.
Most companies believe that their existing control systems and performance-management processes (including budgets and operating reviews) are the sole way to monitor progress on strategy. As a result, managers attempt to translate the decisions made during the planning process into budget targets or other financial goals. Although this practice is sensible and necessary, it is not enough. We estimate that a significant portion of the strategic decisions we recommend to companies can’t be tracked solely through financial targets. A company undertaking a major strategic initiative to enhance its innovation and product-development capabilities, for example, should measure a variety of input metrics, such as the quality of available talent and the number of ideas and projects at each stage in development, in addition to pure output metrics such as revenues from new-product sales. One information technology company, for instance, carefully tracks the number and skill levels of people posted to important strategic projects.
Strategic-performance-management systems, which should assign accountability for initiatives and make their progress more transparent, can take many forms. One industrial corporation tracks major strategic initiatives that will have the greatest impact, across a portfolio of a dozen businesses, on its financial and strategic goals. Transparency is achieved through regular reviews and the use of financial as well as nonfinancial metrics. The corporate-strategy team assumes responsibility for reviews (chaired by the CEO and involving the relevant business-unit leaders) that use an array of milestones and metrics to assess the top ten initiatives. One to expand operations in China and India, for example, would entail regular reviews of interim metrics such as the quality and number of local employees recruited and the pace at which alliances are formed with channel partners or suppliers. Each business unit, in turn, is accountable for adopting the same performance-management approach for its own, lower-tier top-ten list of initiatives.
When designed well, strategic-performance-management systems can give an early warning of problems with strategic initiatives, whereas financial targets alone at best provide lagging indicators. An effective system enables management to step in and correct, redirect, or even abandon an initiative that is failing to perform as expected. The strategy of a pharmaceutical company that embarked on a major expansion of its sales force to drive revenue growth, for example, presupposed that rapid growth in the number of sales representatives would lead to a corresponding increase in revenues. The company also recognized, however, that expansion was in turn contingent on several factors, including the ability to recruit and train the right people. It therefore put in place a regular review of the key strategic metrics against its actual performance to alert managers to any emerging problems.
Integrate human-resources systems into the strategic plan
Simply monitoring the execution of strategic initiatives is not sufficient: their successful implementation also depends on how managers are evaluated and compensated. Yet only 36 percent of the executives we surveyed said that their companies’ strategic-planning processes were integrated with HR processes. One way to create a more valuable strategic-planning process would be to tie the evaluation and compensation of managers to the progress of new initiatives.
More on strategic planning
In a Quarterly interview, Richard Rumelt, a professor at UCLA’s Anderson School of Management, discusses the misperceptions some executives have about strategic planning: “Most corporate ‘strategic plans’ have little to do with strategy. They are simply three-year or five-year rolling resource budgets and some sort of market share projection. Calling it ‘strategic planning’ creates false expectations that the exercise will somehow produce a coherent strategy.” Read the full interview online available mid-August.
Although the development of strategy is ostensibly a long-term endeavor, companies traditionally emphasize short-term, purely financial targets—such as annual revenue growth or improved margins—as the sole metrics to gauge the performance of managers and employees. This approach is gradually changing. Deferred-compensation models for boards, CEOs, and some senior managers are now widely used. What’s more, several companies have added longer-term performance targets to complement the short-term ones. A major pharmaceutical company, for example, recently revamped its managerial-compensation structure to include a basket of short-term financial and operating targets as well as longer-term, innovation-based growth targets.
Although these changes help persuade managers to adopt both short- and long-term approaches to the development of strategy, they don’t address the need to link evaluation and compensation to specific strategic initiatives. One way of doing so is to craft a mix of performance targets that more appropriately reflect a company’s strategy. For example, one North American services business that launched strategic initiatives to improve its customer retention and increase sales also adjusted the evaluation and compensation targets for its managers. Rather than measuring senior managers only by revenue and margin targets, as it had done before, it tied 20 percent of their compensation to achieving its retention and cross-selling goals. By introducing metrics for these specific initiatives and linking their success closely to bonus packages, the company motivated managers to make the strategy succeed.
An advantage of this approach is that it motivates managers to flag any problems early in the implementation of a strategic initiative (which determines the size of bonuses) so that the company can solve them. Otherwise, managers all too often sweep the debris of a failing strategy under the operating rug until the spring-cleaning ritual of next year’s annual planning process.
Some business leaders have found ways to give strategic planning a more valuable role in the formulation as well as the execution of strategy. Companies that emulate their methods might find satisfaction instead of frustration at the end of the annual process.
Things to ask in any business unit review
Are major trends and changes in your business unit’s environment affecting your strategic plan? Specifically, what potential developments in customer demand, technology, or the regulatory environment could have enough impact on the industry to change the entire plan?
How and why is this plan different from last year’s?
What were your forecasts for market growth, sales, and profitability last year, two years ago, and three years ago? How right or wrong were they? What did the business unit learn from those experiences?
What would it take to double your business unit’s growth rate and profits? Where will growth come from: expansion or gains in market share?
If your business unit plans to take market share from competitors, how will it do so, and how will they respond? Are you counting on a strategic advantage or superior execution?
What are your business unit’s distinctive competitive strengths, and how does the plan build on them?
How different is the strategy from those of competitors, and why? Is that a good or a bad thing?
Beyond the immediate planning cycle, what are the key issues, risks, and opportunities that we should discuss today?
What would a private-equity owner do with this business?
How will the business unit monitor the execution of this strategy?
About the Authors
Renée Dye is a consultant in McKinsey’s Atlanta office, and Olivier Sibony is a director in the Paris office.
Notes
1 “Improving strategic planning: A McKinsey Survey,” The McKinsey Quarterly, Web exclusive, September 2006. The survey, conducted in late July and early August 2006, received 796 responses from a panel of executives from around the world. All panelists have mostly financial or strategic responsibilities and work in a wide range of industries for organizations with revenues of at least $500 million.
martes, 9 de octubre de 2007
sábado, 6 de octubre de 2007
Harnessing the power of informal employee networks
Formalizing a company’s ad hoc peer groups can spur collaboration and unlock value.
Lowell L. Bryan, Eric Matson, and Leigh M. Weiss
2007 Number 4
In any professional setting, networks flourish spontaneously: human nature, including mutual self-interest, leads people to share ideas and work together even when no one requires them to do so. As they connect around shared interests and knowledge, they may build networks that can range in size from fewer than a dozen colleagues and acquaintances to hundreds. Research scientists working in related fields, for example, or investment bankers serving clients in the same industry frequently create informal—and often socially based—networks to collaborate.
Most large corporations have dozens if not hundreds of informal networks, which go by the name of peer groups, communities of practice, or functional councils—or have no title at all. These networks organize and reorganize themselves and extend their reach via cell phones, Blackberries, community Web sites, and other accessories of the digital age. As networks widen and deepen, they can mobilize talent and knowledge across the enterprise. They also help to explain why some intangible-rich companies, such as ExxonMobil and GE, have increased in scale and scope and boast superior performance.1
As we studied these social and informal networks, we made a surprising discovery: how much information and knowledge flows through them and how little through official hierarchical and matrix structures. As we used surveys and e-mail analysis to map the way employees actually exchange information and knowledge, we concluded that the formal structures of companies, as manifested in their organizational charts, don’t explain how most of their real day-to-day work gets done.
So it’s unfortunate, at a time when the ability to create value increasingly depends on the ideas and intangibles of talented workers, that corporate leaders don’t do far more to harness the power of informal networks. Valuable as they are, these ad hoc communities clearly have shortcomings: they can increase complexity and confusion, and since they typically fly under management’s radar, they elude control.
But companies can design and manage new formal structures that boost the value of networks and promote effective horizontal networking across the vertical silos of so many enterprises today. By building network infrastructures, assigning “leaders” to focus discussion, and combining hierarchy and collaboration to bring together natural professional communities, formalized networks serve as an organizing structure for collaborative professional work. They can replace cumbersome and outdated matrix structures, facilitate the creation and sharing of proprietary information and knowledge, and help build more and better personal relationships among the members of a community. Most important, they can enable leaders to apply the energy of diverse groups of professionals and managers to realize collective aspirations.
The long and short of informal networks
Personal social networks, both within and outside of companies, increase the value of collaboration by reducing the search and coordination costs of connecting parties who have related knowledge and interests. They don’t necessarily fit into the organizational chart. Consider the case of an energy company staffer we call Cole (Exhibit 1). Although he sits relatively far down in the formal company structure, he acts as the hub in an informal network because he has knowledge that others find valuable. Without him, the production group would be cut off from the rest of the organization. His boss Jones, the unit’s senior vice president, is connected in the informal network to only two people, both in exploration. This is increasingly typical in today’s large, sprawling corporations. Informal networks, slipping through the back channels, cross the lines of geography, products, customer groups, and functions—where the action is—and even through the thick silo walls of vertically oriented organizations.
But though informal networks help many of the largest companies capture wealth, they also cause severe headaches. As tens of thousands of individuals search for knowledge and productive personal relationships in social networks, they generate much of the overload of e-mails, voice mails, and meetings that make today’s large companies more complex and inefficient. At one large company, we conducted a network analysis of more than 1,000 people across a number of business units around the world to gauge the frequency and quality of the interactions that generated decisions about business planning and other processes. Nearly half of the interactions were not central to making decisions. This analysis suggested that redesigning the processes to eliminate or reduce the noncore interactions could result in savings of tens of millions of dollars and shorten the time to make the decisions.
Part of the problem is that informal networks, as ad hoc structures, essentially rely on serendipity, so their effectiveness varies considerably. In large companies a number of informal networks may form on related topics but never integrate. People with valuable knowledge or skills may not join the most appropriate network, belong to other informal networks, or fail to discover that a network exists. What’s more, companies typically underinvest in the capabilities needed to make networks function effectively and efficiently. An informal network often has crucial members, such as Cole, who serve as hubs to connect participants, but such members can hobble or even undermine the network if they become overloaded, act as gatekeepers, horde knowledge to gain power, or leave the company (Exhibit 2).
The greatest limitation of these ad hoc arrangements is that they can’t be managed. They may not be visible to management, and even when they are it’s hard for corporations to take full advantage of them. Unintended barriers, corporate politics, and simple neglect can keep natural networks from flourishing. At worst, informal networks can make dysfunctional organizations even more so by adding complexity, muddling roles, or increasing the intensity of corporate politics.
Formal networks
The specific objective of designing and establishing formal networks is to increase the value and lower the costs of collaboration among professionals. Since formal networks stimulate interactions that the organization sponsors and encourages, they can be managed.
A leading petrochemical company, for example, recently designed more than 20 formal networks, ranging in size from 50 to several hundred people, to focus on specific work areas so that employees could share best practices. This was critical, because the networks could minimize downtime in these areas. In one case the company measured the impact of networks on engineers at an oil well, who used them to find experts with the knowledge needed to get the well back into production in two days rather than the anticipated four.
These networks succeeded because the company formed them around focused topics closely related to the way work was carried out at the wells. Management also appointed the networks’ leaders, gave the members training, carefully identified the members of each network across the geographically dispersed company, made technology investments, and sponsored a knowledge-sharing team that collected and disseminated best practices.2
Matrix decoded
Because formal networks cross line structures, they can easily be mistaken for matrix organizational entities. But the differences are significant and start with the organizing principles that underlie each (Exhibit 3). A matrix organizes work through authority and is therefore principally based on management hierarchy. A formal network organizes work through mutual self-interest and is therefore principally based on collaboration.
In classic matrix organizations, managers and professionals have two or more bosses who have authority over their work; the chief financial officer of a business unit, for example, might report both to its line manager and to the corporate finance chief. These matrixes represent different axes of management, such as products, geography, customers, or functions. Hierarchical direction comes from two different sources, and the person in the middle of the matrix must resolve any conflicts. In hierarchically organized companies, matrix management became popular because no matter how well organized their line structures may have been by functions, geography, customers, or products, they felt they needed secondary axes of management to stretch horizontally across the enterprise and thus make it possible to integrate other work activities.
Matrix management worked reasonably well from its advent in the 1960s until the late 1980s, particularly because it enabled limited collaboration to take place within companies as they became increasingly aware that hierarchical managers sometimes had to coordinate their activities. Matrix structures made sense because they were used sparingly and therefore didn’t greatly confuse the hierarchical vertical line structures responsible for much of the success of large 20th-century companies.
But when globalization took hold, companies were forced to adapt to an increasingly fluid and uncertain competitive environment, so more work from different perspectives had to be integrated. As the number of professionals needing to direct much of their own work has risen, matrixed roles have proliferated. This increased the need for more interactions, and decision making now swamps the time available for matrix managers to coordinate the work personally. Furthermore, the amount of knowledge and information that must be absorbed and exchanged often exceeds the personal capacities of any individual, no matter how talented, to deal with them in a matrix structure.
Professionals who want to work horizontally across an organization currently find themselves forced to search though poorly connected organizational silos for the knowledge and collaborators they need. In many companies these matrix and other hybrid organizations have become dysfunctional. The symptoms include endless meetings, phone calls, and e-mail exchanges, as well as confused accountability for results.
A new model
Companies need to build infrastructures to create and support formal networks. Such well-designed and well-supported formal networks remove bottlenecks and take much of the effort out of networking. Rather than forcing employees to go up and down hierarchical chains of command, formal networks create pathways for the natural exchange of information and knowledge. Individual members of networks don’t have to find one another through serendipity.
Consider the US retail unit of a financial institution we’ll call Global Bank, which was organized as a matrix. Its retail-marketing managers, forced to report to a regional as well as a functional manager, often didn’t know whose authority to recognize and had little opportunity to share best practices with other marketing professionals across the organization.
In the new model (Exhibit 4) regional marketing managers still report to the branch network’s regional managers but no longer have a second boss in marketing. Instead, a branch-based formal network leader for marketing facilitates their interactions with other marketing professionals. The leader can’t give them orders but can encourage them to work for the network’s benefit (for example, by asking them to help develop new promotional materials or to find better ways of using local-advertising budgets). The marketing leader’s boss, the US retail-marketing executive, is a senior manager who owns the formal network and mobilizes marketing talent for special projects, identifies candidates for marketing positions, oversees the maintenance of the domain’s knowledge (for instance, branch signage or promotional materials), and stimulates its creation. The company, which expects the network to show measurable results in key metrics (such as brand awareness), evaluates the owner by taking into account qualitative assessments of how well this formal network operates as compared with others, as well as the expectations of corporate leaders.
Formalizing a network
To formalize a network, the company must define who will lead it—that is, the network owner—and make that leader responsible for investing in the network to build its collective capabilities, such as knowledge that is valuable for all members. The company can facilitate the development of a formal network by providing incentives for participating in it (such as community building off-sites) and for contributing to it (such as recognition for people who contribute distinctive knowledge).
Network owners facilitate interactions between members, stimulate the creation of knowledge, maintain the network’s knowledge domain, and help members do their jobs more effectively and efficiently. For a formal network to work effectively, its territory must be defined—informal networks sometimes make overlapping claims on the same activities. Furthermore, the network must have standards and protocols that describe how it should work.
Another difference between a formal network and a matrix is that the network owner isn’t a boss but rather a “servant leader.” The owner of a network doesn’t oversee its work or personally manage or evaluate the performance of individual members (except for direct reports) but may provide input to the evaluation process.
The responsibilities of the formal leader of a network are primarily limited to its activities, such as organizing the infrastructure supporting it, developing an agenda for maintaining its knowledge domain, building a training program, holding conferences, and qualifying members as professionally competent.
Despite this limited hierarchical authority, a formal network’s leader should be held accountable (together with line management) for the network’s performance. After all, the leader has great ability to help its members improve their performance and in this way can shape the organization. Much of the leader’s impact comes from controlling the investments and activities that make the members individually—and the network collectively—more effective, and much from the ability to inspire and persuade.
In professional firms, which have long used formal networks called practices, it is always possible to tell the difference between talented and average leaders. While the responsibilities might be the same, talented ones create far more vibrant, exciting practices than their average counterparts do. It is therefore entirely appropriate to hold the leader of a formal network accountable for its performance, even if the leader has no direct authority over individual members.
Connecting members to the network
In the model we propose, companies should design formal networks to extend the reach of professional work throughout the organization but not to interfere with its hierarchical decision-making processes. The idea is to achieve this extended reach by adding value for the networks’ members, not by exercising authority through hierarchical leaders.
To undertake the appropriate roles, a formal network’s leader should have a discrete budget to finance network investments, which give the leader the muscle to offer the members added value. These investments might include infrastructure, both human and technological, to support network interactions; codified knowledge in forms such as documents, internal blogs, and “networkpedias”; training for members; and activities such as conferences to build a social community. Companies can evaluate the leader’s performance by using some quantitative measures, such as the level of participation in conferences, e-mail volumes, standard measures from network analysis (for example, the number of steps it takes for any person in the network to reach anyone else), density, knowledge documents produced, and downloads. Management can also track and test the effectiveness of a network by assessing the satisfaction of its members, the effectiveness of responses to inquiries, and the ability to find appropriate partners for dialogue quickly.
But the real measure of the network’s success would be qualitative assessments, made by members and senior leaders, of its effectiveness in realizing its mission. These assessments might come in the form of stories or case studies illustrating improvements in professional productivity.
Providing structure to professional work
Just as formal hierarchical structures define management roles, formal network structures define collaborative professional ones. In this way such networks can enable large companies to overcome the problems of very large numbers by creating small, focused communities of interest integrated within larger, more wide-ranging communities—for instance, subcommunities focused on different aspects of financial services, such as wholesale and retail banking.
The number of networks employees participated in would be up to them, unless they were core members, for whom participation would be a job requirement. In other words each member would build a personal social network within the formal networks, depending on that member’s roles and professional interests. The limits of network participation are largely a function of time and interest; members would join networks that had more value to them than the opportunity costs of their time and would leave when those networks no longer had that much value.
By participating in more than one network at a time, talented workers would gain the ability to integrate knowledge and access to talent across a number of communities. A person in the retail-banking community could also be a member of a branding community, for example, and members could bring knowledge gained there into other communities.
The number of formal networks a company could create is limited only by how much management chooses to invest in them. Their number and size could vary with how well each of them serves its members—effective networks would grow in membership and interactions; ineffective ones would lose both. In this way formal networks regulate themselves. Rapid growth proves the value of a network, its leader, and the money invested in it.
Today’s mega-institutions have room for thousands of formal networks. A company with 100,000 professional and managerial employees, for example, could have 2,000 networks with 100 people apiece if each professional and manager was a member of just 2 networks. Broad networks (in fields such as finance or IT) might have thousands of members; specialized ones (say, a Turkish interest group) might have only a few dozen. Formal networked communities could form around not just customer groups, products, geography, and functional lines but also in conjunction with integrative crosscutting themes, such as risk management and global forces (nanotechnology and changing demographics, for instance).
Formal network structures can mobilize employees to generate value by propagating knowledge and its creators all over the enterprise. Rather than pushing knowledge and talent through a hierarchical matrix, formal networks let employees pull these necessities toward them.
About the Authors
Lowell Bryan is a director in McKinsey’s New York office; Eric Matson is a consultant and Leigh Weiss is an associate principal in the Boston office.
Notes
1 Lowell L. Bryan and Michele Zanini, “Strategy in an era of global giants,” The McKinsey Quarterly, 2005 Number 4, pp. 46–59.
2 Robert L. Cross, Roger D. Martin, and Leigh M. Weiss, “Mapping the value of employee collaboration,” The McKinsey Quarterly, 2006 Number 3, pp. 28–41.
Formalizing a company’s ad hoc peer groups can spur collaboration and unlock value.
Lowell L. Bryan, Eric Matson, and Leigh M. Weiss
2007 Number 4
In any professional setting, networks flourish spontaneously: human nature, including mutual self-interest, leads people to share ideas and work together even when no one requires them to do so. As they connect around shared interests and knowledge, they may build networks that can range in size from fewer than a dozen colleagues and acquaintances to hundreds. Research scientists working in related fields, for example, or investment bankers serving clients in the same industry frequently create informal—and often socially based—networks to collaborate.
Most large corporations have dozens if not hundreds of informal networks, which go by the name of peer groups, communities of practice, or functional councils—or have no title at all. These networks organize and reorganize themselves and extend their reach via cell phones, Blackberries, community Web sites, and other accessories of the digital age. As networks widen and deepen, they can mobilize talent and knowledge across the enterprise. They also help to explain why some intangible-rich companies, such as ExxonMobil and GE, have increased in scale and scope and boast superior performance.1
As we studied these social and informal networks, we made a surprising discovery: how much information and knowledge flows through them and how little through official hierarchical and matrix structures. As we used surveys and e-mail analysis to map the way employees actually exchange information and knowledge, we concluded that the formal structures of companies, as manifested in their organizational charts, don’t explain how most of their real day-to-day work gets done.
So it’s unfortunate, at a time when the ability to create value increasingly depends on the ideas and intangibles of talented workers, that corporate leaders don’t do far more to harness the power of informal networks. Valuable as they are, these ad hoc communities clearly have shortcomings: they can increase complexity and confusion, and since they typically fly under management’s radar, they elude control.
But companies can design and manage new formal structures that boost the value of networks and promote effective horizontal networking across the vertical silos of so many enterprises today. By building network infrastructures, assigning “leaders” to focus discussion, and combining hierarchy and collaboration to bring together natural professional communities, formalized networks serve as an organizing structure for collaborative professional work. They can replace cumbersome and outdated matrix structures, facilitate the creation and sharing of proprietary information and knowledge, and help build more and better personal relationships among the members of a community. Most important, they can enable leaders to apply the energy of diverse groups of professionals and managers to realize collective aspirations.
The long and short of informal networks
Personal social networks, both within and outside of companies, increase the value of collaboration by reducing the search and coordination costs of connecting parties who have related knowledge and interests. They don’t necessarily fit into the organizational chart. Consider the case of an energy company staffer we call Cole (Exhibit 1). Although he sits relatively far down in the formal company structure, he acts as the hub in an informal network because he has knowledge that others find valuable. Without him, the production group would be cut off from the rest of the organization. His boss Jones, the unit’s senior vice president, is connected in the informal network to only two people, both in exploration. This is increasingly typical in today’s large, sprawling corporations. Informal networks, slipping through the back channels, cross the lines of geography, products, customer groups, and functions—where the action is—and even through the thick silo walls of vertically oriented organizations.
But though informal networks help many of the largest companies capture wealth, they also cause severe headaches. As tens of thousands of individuals search for knowledge and productive personal relationships in social networks, they generate much of the overload of e-mails, voice mails, and meetings that make today’s large companies more complex and inefficient. At one large company, we conducted a network analysis of more than 1,000 people across a number of business units around the world to gauge the frequency and quality of the interactions that generated decisions about business planning and other processes. Nearly half of the interactions were not central to making decisions. This analysis suggested that redesigning the processes to eliminate or reduce the noncore interactions could result in savings of tens of millions of dollars and shorten the time to make the decisions.
Part of the problem is that informal networks, as ad hoc structures, essentially rely on serendipity, so their effectiveness varies considerably. In large companies a number of informal networks may form on related topics but never integrate. People with valuable knowledge or skills may not join the most appropriate network, belong to other informal networks, or fail to discover that a network exists. What’s more, companies typically underinvest in the capabilities needed to make networks function effectively and efficiently. An informal network often has crucial members, such as Cole, who serve as hubs to connect participants, but such members can hobble or even undermine the network if they become overloaded, act as gatekeepers, horde knowledge to gain power, or leave the company (Exhibit 2).
The greatest limitation of these ad hoc arrangements is that they can’t be managed. They may not be visible to management, and even when they are it’s hard for corporations to take full advantage of them. Unintended barriers, corporate politics, and simple neglect can keep natural networks from flourishing. At worst, informal networks can make dysfunctional organizations even more so by adding complexity, muddling roles, or increasing the intensity of corporate politics.
Formal networks
The specific objective of designing and establishing formal networks is to increase the value and lower the costs of collaboration among professionals. Since formal networks stimulate interactions that the organization sponsors and encourages, they can be managed.
A leading petrochemical company, for example, recently designed more than 20 formal networks, ranging in size from 50 to several hundred people, to focus on specific work areas so that employees could share best practices. This was critical, because the networks could minimize downtime in these areas. In one case the company measured the impact of networks on engineers at an oil well, who used them to find experts with the knowledge needed to get the well back into production in two days rather than the anticipated four.
These networks succeeded because the company formed them around focused topics closely related to the way work was carried out at the wells. Management also appointed the networks’ leaders, gave the members training, carefully identified the members of each network across the geographically dispersed company, made technology investments, and sponsored a knowledge-sharing team that collected and disseminated best practices.2
Matrix decoded
Because formal networks cross line structures, they can easily be mistaken for matrix organizational entities. But the differences are significant and start with the organizing principles that underlie each (Exhibit 3). A matrix organizes work through authority and is therefore principally based on management hierarchy. A formal network organizes work through mutual self-interest and is therefore principally based on collaboration.
In classic matrix organizations, managers and professionals have two or more bosses who have authority over their work; the chief financial officer of a business unit, for example, might report both to its line manager and to the corporate finance chief. These matrixes represent different axes of management, such as products, geography, customers, or functions. Hierarchical direction comes from two different sources, and the person in the middle of the matrix must resolve any conflicts. In hierarchically organized companies, matrix management became popular because no matter how well organized their line structures may have been by functions, geography, customers, or products, they felt they needed secondary axes of management to stretch horizontally across the enterprise and thus make it possible to integrate other work activities.
Matrix management worked reasonably well from its advent in the 1960s until the late 1980s, particularly because it enabled limited collaboration to take place within companies as they became increasingly aware that hierarchical managers sometimes had to coordinate their activities. Matrix structures made sense because they were used sparingly and therefore didn’t greatly confuse the hierarchical vertical line structures responsible for much of the success of large 20th-century companies.
But when globalization took hold, companies were forced to adapt to an increasingly fluid and uncertain competitive environment, so more work from different perspectives had to be integrated. As the number of professionals needing to direct much of their own work has risen, matrixed roles have proliferated. This increased the need for more interactions, and decision making now swamps the time available for matrix managers to coordinate the work personally. Furthermore, the amount of knowledge and information that must be absorbed and exchanged often exceeds the personal capacities of any individual, no matter how talented, to deal with them in a matrix structure.
Professionals who want to work horizontally across an organization currently find themselves forced to search though poorly connected organizational silos for the knowledge and collaborators they need. In many companies these matrix and other hybrid organizations have become dysfunctional. The symptoms include endless meetings, phone calls, and e-mail exchanges, as well as confused accountability for results.
A new model
Companies need to build infrastructures to create and support formal networks. Such well-designed and well-supported formal networks remove bottlenecks and take much of the effort out of networking. Rather than forcing employees to go up and down hierarchical chains of command, formal networks create pathways for the natural exchange of information and knowledge. Individual members of networks don’t have to find one another through serendipity.
Consider the US retail unit of a financial institution we’ll call Global Bank, which was organized as a matrix. Its retail-marketing managers, forced to report to a regional as well as a functional manager, often didn’t know whose authority to recognize and had little opportunity to share best practices with other marketing professionals across the organization.
In the new model (Exhibit 4) regional marketing managers still report to the branch network’s regional managers but no longer have a second boss in marketing. Instead, a branch-based formal network leader for marketing facilitates their interactions with other marketing professionals. The leader can’t give them orders but can encourage them to work for the network’s benefit (for example, by asking them to help develop new promotional materials or to find better ways of using local-advertising budgets). The marketing leader’s boss, the US retail-marketing executive, is a senior manager who owns the formal network and mobilizes marketing talent for special projects, identifies candidates for marketing positions, oversees the maintenance of the domain’s knowledge (for instance, branch signage or promotional materials), and stimulates its creation. The company, which expects the network to show measurable results in key metrics (such as brand awareness), evaluates the owner by taking into account qualitative assessments of how well this formal network operates as compared with others, as well as the expectations of corporate leaders.
Formalizing a network
To formalize a network, the company must define who will lead it—that is, the network owner—and make that leader responsible for investing in the network to build its collective capabilities, such as knowledge that is valuable for all members. The company can facilitate the development of a formal network by providing incentives for participating in it (such as community building off-sites) and for contributing to it (such as recognition for people who contribute distinctive knowledge).
Network owners facilitate interactions between members, stimulate the creation of knowledge, maintain the network’s knowledge domain, and help members do their jobs more effectively and efficiently. For a formal network to work effectively, its territory must be defined—informal networks sometimes make overlapping claims on the same activities. Furthermore, the network must have standards and protocols that describe how it should work.
Another difference between a formal network and a matrix is that the network owner isn’t a boss but rather a “servant leader.” The owner of a network doesn’t oversee its work or personally manage or evaluate the performance of individual members (except for direct reports) but may provide input to the evaluation process.
The responsibilities of the formal leader of a network are primarily limited to its activities, such as organizing the infrastructure supporting it, developing an agenda for maintaining its knowledge domain, building a training program, holding conferences, and qualifying members as professionally competent.
Despite this limited hierarchical authority, a formal network’s leader should be held accountable (together with line management) for the network’s performance. After all, the leader has great ability to help its members improve their performance and in this way can shape the organization. Much of the leader’s impact comes from controlling the investments and activities that make the members individually—and the network collectively—more effective, and much from the ability to inspire and persuade.
In professional firms, which have long used formal networks called practices, it is always possible to tell the difference between talented and average leaders. While the responsibilities might be the same, talented ones create far more vibrant, exciting practices than their average counterparts do. It is therefore entirely appropriate to hold the leader of a formal network accountable for its performance, even if the leader has no direct authority over individual members.
Connecting members to the network
In the model we propose, companies should design formal networks to extend the reach of professional work throughout the organization but not to interfere with its hierarchical decision-making processes. The idea is to achieve this extended reach by adding value for the networks’ members, not by exercising authority through hierarchical leaders.
To undertake the appropriate roles, a formal network’s leader should have a discrete budget to finance network investments, which give the leader the muscle to offer the members added value. These investments might include infrastructure, both human and technological, to support network interactions; codified knowledge in forms such as documents, internal blogs, and “networkpedias”; training for members; and activities such as conferences to build a social community. Companies can evaluate the leader’s performance by using some quantitative measures, such as the level of participation in conferences, e-mail volumes, standard measures from network analysis (for example, the number of steps it takes for any person in the network to reach anyone else), density, knowledge documents produced, and downloads. Management can also track and test the effectiveness of a network by assessing the satisfaction of its members, the effectiveness of responses to inquiries, and the ability to find appropriate partners for dialogue quickly.
But the real measure of the network’s success would be qualitative assessments, made by members and senior leaders, of its effectiveness in realizing its mission. These assessments might come in the form of stories or case studies illustrating improvements in professional productivity.
Providing structure to professional work
Just as formal hierarchical structures define management roles, formal network structures define collaborative professional ones. In this way such networks can enable large companies to overcome the problems of very large numbers by creating small, focused communities of interest integrated within larger, more wide-ranging communities—for instance, subcommunities focused on different aspects of financial services, such as wholesale and retail banking.
The number of networks employees participated in would be up to them, unless they were core members, for whom participation would be a job requirement. In other words each member would build a personal social network within the formal networks, depending on that member’s roles and professional interests. The limits of network participation are largely a function of time and interest; members would join networks that had more value to them than the opportunity costs of their time and would leave when those networks no longer had that much value.
By participating in more than one network at a time, talented workers would gain the ability to integrate knowledge and access to talent across a number of communities. A person in the retail-banking community could also be a member of a branding community, for example, and members could bring knowledge gained there into other communities.
The number of formal networks a company could create is limited only by how much management chooses to invest in them. Their number and size could vary with how well each of them serves its members—effective networks would grow in membership and interactions; ineffective ones would lose both. In this way formal networks regulate themselves. Rapid growth proves the value of a network, its leader, and the money invested in it.
Today’s mega-institutions have room for thousands of formal networks. A company with 100,000 professional and managerial employees, for example, could have 2,000 networks with 100 people apiece if each professional and manager was a member of just 2 networks. Broad networks (in fields such as finance or IT) might have thousands of members; specialized ones (say, a Turkish interest group) might have only a few dozen. Formal networked communities could form around not just customer groups, products, geography, and functional lines but also in conjunction with integrative crosscutting themes, such as risk management and global forces (nanotechnology and changing demographics, for instance).
Formal network structures can mobilize employees to generate value by propagating knowledge and its creators all over the enterprise. Rather than pushing knowledge and talent through a hierarchical matrix, formal networks let employees pull these necessities toward them.
About the Authors
Lowell Bryan is a director in McKinsey’s New York office; Eric Matson is a consultant and Leigh Weiss is an associate principal in the Boston office.
Notes
1 Lowell L. Bryan and Michele Zanini, “Strategy in an era of global giants,” The McKinsey Quarterly, 2005 Number 4, pp. 46–59.
2 Robert L. Cross, Roger D. Martin, and Leigh M. Weiss, “Mapping the value of employee collaboration,” The McKinsey Quarterly, 2006 Number 3, pp. 28–41.
SILENCE KILLS
© 2005 VitalSmarts, L.C. All Rights Reserved. VitalSmarts is a trademark and Crucial Conversations is a registered trademark of VitalSmarts, L.C.
All too often, well-intentioned people in healthcare institutions choose not to speak upwhen they’re concerned with behavior, decisions, or actions of a colleague.
For example:
Past studies have indicated that more than 60 percent of medication errors are caused by mistakes in interpersonal communication (JCAHO).
This new study builds on these findings by exploring the specific concerns people have a hard time communicating that may contribute to avoidable errors and other chronic problems in healthcare. This study is the first to attempt to link people’s ability to discuss emotionally and politically risky topics in a healthcare setting with key results like patient safety, quality of care, and nursing turnover, among others.
The study finds that seven categories of conversations are especially difficult and, at the same time, appear to be especially essential for people in healthcare to master—including:
1. Broken rules
2. Mistakes
3. Lack of support
4. Incompetence
5. Poor teamwork
6. Disrespect
7. Micromanagement
A majority of healthcare workers regularly see some of their colleagues break rules, make mistakes, fail to offer support, or appear critically incompetent. And yet less than one in ten say anything about it. This study explored the frequency with which people experience these kinds of concerns and the consequences of their failure to speak up when they do.
Researchers conducted dozens of focus groups, interviews, and workplace observations, and then collected survey data from more than 1,700 nurses, physicians, clinical-care staff, and administrators during 2004. Research sites included thirteen urban, suburban, and rural hospitals from across the U.S. Although this is a relatively small sample and includes only one hundred physicians, the findings paint a significant and compelling picture.
More than half of the healthcare workers surveyed have witnessed a small percentage of their coworkers break rules, make mistakes, fail to support, demonstrate incompetence, show poor teamwork, disrespect them, and micromanage. Many have seen colleagues cutting corners, making mistakes, and demonstrating incompetence.
About half of respondents said the concerns have persisted for a year or more. And a significant number of those who have witnessed these persistent problems report injurious consequences. For example, one in five physicians said they have seen harm come to patients as a result of these concerns, and 23 percent of nurses said they are considering leaving their units because of these concerns. With 195,000 people dying each year in U.S. hospitals because of medical mistakes, this study suggests that creating a culture where healthcare workers speak up before problems occur is a vital part of the problems occur is a vital part of the solution.
On the positive side, this study shows that the 10 percent of healthcare workers who are confident in their ability to raise these crucial concerns observe better patient outcomes, work harder, are more satisfied, and are more committed to staying in their jobs. The finding suggests that improving people’s ability to candidly discuss these concerns could be a key variable in improving results and saving lives in healthcare. While additional confirming research is needed, the implication is that if more healthcare workers could learn to do what this influential 10 percent seem to be able to do systematically, the result would be significant reductions in errors, higher productivity, and lower turnover.
The authors conclude it is critical for hospitals to create cultures of safety, where healthcare workers are able to candidly approach each other about their concerns. However, it would be dangerous to conclude that the responsibility for breaking this pervasive culture of silence depends solely on making it safer to speak up. There are those in every hospital who to speak up. There are those in every hospital who are already speaking up, and they are not suffering or their outspokenness. In fact, they speaking up, and they are not suffering for their outspokenness. In fact, they are the most effective, satisfied, and committed in the organization.
The authors provide a series of recommendations for actions leaders can take to improve people’s ability to hold these crucial conversations.
Visit www.silencekills.com to download the full report along with other useful links making a difference for you, your team, and your organization.
All too often, well-intentioned people in healthcare institutions choose not to speak upwhen they’re concerned with behavior, decisions, or actions of a colleague.
For example:
- A pharmacist receives a prescription that is clearly incorrect but fills it anyway because the doctor has been hostile when challenged in the past.
- A nurse quits reminding a colleague to put up thesafety rails on a child’s bed because she decides it’snot her job to deal with her.
- An administrator is reluctant to drive qualityimprovements in the hospital because somedoctors have been uncooperative with pastinitiatives.
Past studies have indicated that more than 60 percent of medication errors are caused by mistakes in interpersonal communication (JCAHO).
This new study builds on these findings by exploring the specific concerns people have a hard time communicating that may contribute to avoidable errors and other chronic problems in healthcare. This study is the first to attempt to link people’s ability to discuss emotionally and politically risky topics in a healthcare setting with key results like patient safety, quality of care, and nursing turnover, among others.
The study finds that seven categories of conversations are especially difficult and, at the same time, appear to be especially essential for people in healthcare to master—including:
1. Broken rules
2. Mistakes
3. Lack of support
4. Incompetence
5. Poor teamwork
6. Disrespect
7. Micromanagement
A majority of healthcare workers regularly see some of their colleagues break rules, make mistakes, fail to offer support, or appear critically incompetent. And yet less than one in ten say anything about it. This study explored the frequency with which people experience these kinds of concerns and the consequences of their failure to speak up when they do.
Researchers conducted dozens of focus groups, interviews, and workplace observations, and then collected survey data from more than 1,700 nurses, physicians, clinical-care staff, and administrators during 2004. Research sites included thirteen urban, suburban, and rural hospitals from across the U.S. Although this is a relatively small sample and includes only one hundred physicians, the findings paint a significant and compelling picture.
More than half of the healthcare workers surveyed have witnessed a small percentage of their coworkers break rules, make mistakes, fail to support, demonstrate incompetence, show poor teamwork, disrespect them, and micromanage. Many have seen colleagues cutting corners, making mistakes, and demonstrating incompetence.
About half of respondents said the concerns have persisted for a year or more. And a significant number of those who have witnessed these persistent problems report injurious consequences. For example, one in five physicians said they have seen harm come to patients as a result of these concerns, and 23 percent of nurses said they are considering leaving their units because of these concerns. With 195,000 people dying each year in U.S. hospitals because of medical mistakes, this study suggests that creating a culture where healthcare workers speak up before problems occur is a vital part of the problems occur is a vital part of the solution.
On the positive side, this study shows that the 10 percent of healthcare workers who are confident in their ability to raise these crucial concerns observe better patient outcomes, work harder, are more satisfied, and are more committed to staying in their jobs. The finding suggests that improving people’s ability to candidly discuss these concerns could be a key variable in improving results and saving lives in healthcare. While additional confirming research is needed, the implication is that if more healthcare workers could learn to do what this influential 10 percent seem to be able to do systematically, the result would be significant reductions in errors, higher productivity, and lower turnover.
The authors conclude it is critical for hospitals to create cultures of safety, where healthcare workers are able to candidly approach each other about their concerns. However, it would be dangerous to conclude that the responsibility for breaking this pervasive culture of silence depends solely on making it safer to speak up. There are those in every hospital who to speak up. There are those in every hospital who are already speaking up, and they are not suffering or their outspokenness. In fact, they speaking up, and they are not suffering for their outspokenness. In fact, they are the most effective, satisfied, and committed in the organization.
The authors provide a series of recommendations for actions leaders can take to improve people’s ability to hold these crucial conversations.
Visit www.silencekills.com to download the full report along with other useful links making a difference for you, your team, and your organization.
viernes, 5 de octubre de 2007
Taking Feedback to Heart (and Action)
Taking Feedback to Heart (and Action)
by Jay M. Jackman and Myra H. Strober
Encouraging feedback is one thing—putting it to good use is quite another. Step number one is to free yourself from knee-jerk reaction to criticism.
Adapting to feedback—which inevitably asks people to change, sometimes significantly—is critical for managers who find themselves in jobs, companies, and industries undergoing frequent transitions. Of course, adaptation is easier said than done, for resistance to change is endemic in human beings. But while most people feel they can't control the negative emotions that are aroused by change, this is not the case. It is possible—and necessary—to think positively about change. Using the following adaptive techniques, you can alter how you respond to feedback and to the changes it demands.
Recognize your emotions and responses. Understanding that you are experiencing fear ("I'm afraid my boss will fire me") and that you are exhibiting a maladaptive response to that fear ("I'll just stay out of his way and keep my mouth shut") are the critical initial steps toward adaptive change.
They require ruthless self-honesty and a little detective work, both of which will go a long way toward helping you undo years of disguising your feelings. It's important to understand, too, that a particular maladaptive behavior does not necessarily tell you what emotion underlies it: You may be procrastinating out of anger, frustration, sadness, or other feelings. But persevering in the detective work is important, for the payoff is high. Having named the emotion and response, you can then act—just as someone who fears flying chooses to board a plane anyway. With practice, it gradually becomes easier to respond differently, even though the fear, anger, or sadness may remain.
It is possible—and necessary—to think positively about change.
Maria, a mid-level manager with whom we worked, is a good example of someone who learned to name her emotions and act despite them. Maria was several months overdue on performance reviews for the three people who reported to her. When we suggested that she was procrastinating, we asked her how she felt when she thought about doing the reviews. After some reflection, she said she was extremely resentful that her boss had not yet completed her own performance evaluation; she recognized that her procrastination was an expression of her anger toward him. We helped her realize that she could act despite her anger. Accordingly, Maria completed the performance evaluations for her subordinates and, in so doing, felt as if a huge weight had been lifted from her shoulders. Once she had completed the reviews, she noticed that her relationships with her three subordinates quickly improved, and her boss responded by finishing Maria's performance review.
We should note that Maria's procrastination was not an entrenched habit, so it was relatively easy to fix. Employees who start procrastinating in response to negative emotions early in their work lives won't change that habit quickly, but they can eventually get support. Identifying your emotions is sometimes difficult, and feedback that requires change can leave you feeling inhibited and ashamed. For these reasons, it's critical to ask for help from trusted friends who will listen, encourage, and offer suggestions. Asking for support is often hard, because most corporate cultures expect managers to be self-reliant. Nevertheless, it's nearly impossible to make significant change without such encouragement. Support can come in many forms, but it should begin with at least two people—including, say, a spouse, a minister or spiritual counselor, a former mentor, an old high school classmate—with whom you feel emotionally safe. Ideally, one of these people should have some business experience. It may also help to enlist the assistance of an outside consultant or executive coach.
Reframe the feedback.
Another adaptive technique, reframing, allows you to reconstruct the feedback process to your advantage. Specifically, this involves putting the prospect of asking for or reacting to feedback in a positive light so that negative emotions and responses lose their grip.
Take the example of Gary, a junior sales manager for a large manufacturing company. Gary's boss told him that he wasn't sociable enough with customers and prospects. The criticism stung, and Gary could have responded with denial or brooding. Indeed, his first response was to interpret the feedback as shallow. Eventually, though, Gary was able to reframe what he'd heard, first by grudgingly acknowledging it. ("He's right, I'm not very sociable. I tested as an introvert on the Myers-Briggs, and I've always been uncomfortable with small talk"). Then Gary reframed the feedback. Instead of seeing it as painful, he recognized that he could use it to help his career. Avoiding possible maladaptive responses, he was able to ask himself several important questions: "How critical is sociability to my position? How much do I want to keep this job? How much am I willing to change to become more sociable?" In responding, Gary realized two things: that sociability was indeed critical to success in sales and that he wasn't willing to learn to be more sociable. He requested a transfer and moved to a new position where he became much more successful.
Break up the task.
Yet another adaptive technique is to divide up the large task of dealing with feedback into manageable, measurable chunks, and set realistic time frames for each one. Although more than two areas of behavior may need to be modified, it's our experience that most people can't change more than one or two at a time. Taking small steps and meeting discrete goals reduces your chances of being overwhelmed and makes change much more likely.
Jane, for example, received feedback indicating that the quality of her work was excellent but that her public presentations were boring. A quiet and reserved person, Jane could have felt overwhelmed by what she perceived as the subtext of this criticism: that she was a lousy public speaker and that she'd better transform herself from a wallflower into a writer and actress. Instead, she adapted by breaking down the challenge of "interesting presentations" into its constituent parts (solid and well constructed content; a commanding delivery; an understanding of the audience; and so on). Then she undertook to teach herself to present more effectively by observing several effective speakers and taking an introductory course in public speaking.
It was important for Jane to start with the easiest task—in this case, observing good speakers. She noted their gestures, the organization of their speeches, their intonation, timing, use of humor, and so forth. Once she felt she understood what good speaking entailed, she was ready to take the introductory speaking course. These endeavors allowed her to improve her presentations. Though she didn't transform herself into a mesmerizing orator, she did learn to command the attention and respect of an audience.
Use incentives.
Pat yourself on the back as you make adaptive changes. That may seem like unusual advice, given that feedback situations can rouse us to self-punishment and few of us are in the habit of congratulating ourselves. Nevertheless, nowhere is it written that the feedback process must be a wholly negative experience. Just as a salary raise or a bonus provides incentive to improve performance, rewarding yourself whenever you take an important step in the process will help you to persevere in your efforts. The incentive should be commensurate with the achievement. For example, an appropriate reward for completing a self-assessment might be an uninterrupted afternoon watching ESPN or, for a meeting with the boss, a fine dinner out.
Excerpted with permission from "Fear of Feedback," Harvard Business Review, Vol. 81, No. 4, April 2003.
Jay M. Jackman is a psychiatrist and human resources consultant in Stanford, California. He can be reached at jayj@stanfordalumni.org.
Myra H. Strober is a labor economist and professor at Stanford University’s School of Education.
by Jay M. Jackman and Myra H. Strober
Encouraging feedback is one thing—putting it to good use is quite another. Step number one is to free yourself from knee-jerk reaction to criticism.
Adapting to feedback—which inevitably asks people to change, sometimes significantly—is critical for managers who find themselves in jobs, companies, and industries undergoing frequent transitions. Of course, adaptation is easier said than done, for resistance to change is endemic in human beings. But while most people feel they can't control the negative emotions that are aroused by change, this is not the case. It is possible—and necessary—to think positively about change. Using the following adaptive techniques, you can alter how you respond to feedback and to the changes it demands.
Recognize your emotions and responses. Understanding that you are experiencing fear ("I'm afraid my boss will fire me") and that you are exhibiting a maladaptive response to that fear ("I'll just stay out of his way and keep my mouth shut") are the critical initial steps toward adaptive change.
They require ruthless self-honesty and a little detective work, both of which will go a long way toward helping you undo years of disguising your feelings. It's important to understand, too, that a particular maladaptive behavior does not necessarily tell you what emotion underlies it: You may be procrastinating out of anger, frustration, sadness, or other feelings. But persevering in the detective work is important, for the payoff is high. Having named the emotion and response, you can then act—just as someone who fears flying chooses to board a plane anyway. With practice, it gradually becomes easier to respond differently, even though the fear, anger, or sadness may remain.
It is possible—and necessary—to think positively about change.
Maria, a mid-level manager with whom we worked, is a good example of someone who learned to name her emotions and act despite them. Maria was several months overdue on performance reviews for the three people who reported to her. When we suggested that she was procrastinating, we asked her how she felt when she thought about doing the reviews. After some reflection, she said she was extremely resentful that her boss had not yet completed her own performance evaluation; she recognized that her procrastination was an expression of her anger toward him. We helped her realize that she could act despite her anger. Accordingly, Maria completed the performance evaluations for her subordinates and, in so doing, felt as if a huge weight had been lifted from her shoulders. Once she had completed the reviews, she noticed that her relationships with her three subordinates quickly improved, and her boss responded by finishing Maria's performance review.
We should note that Maria's procrastination was not an entrenched habit, so it was relatively easy to fix. Employees who start procrastinating in response to negative emotions early in their work lives won't change that habit quickly, but they can eventually get support. Identifying your emotions is sometimes difficult, and feedback that requires change can leave you feeling inhibited and ashamed. For these reasons, it's critical to ask for help from trusted friends who will listen, encourage, and offer suggestions. Asking for support is often hard, because most corporate cultures expect managers to be self-reliant. Nevertheless, it's nearly impossible to make significant change without such encouragement. Support can come in many forms, but it should begin with at least two people—including, say, a spouse, a minister or spiritual counselor, a former mentor, an old high school classmate—with whom you feel emotionally safe. Ideally, one of these people should have some business experience. It may also help to enlist the assistance of an outside consultant or executive coach.
Reframe the feedback.
Another adaptive technique, reframing, allows you to reconstruct the feedback process to your advantage. Specifically, this involves putting the prospect of asking for or reacting to feedback in a positive light so that negative emotions and responses lose their grip.
Take the example of Gary, a junior sales manager for a large manufacturing company. Gary's boss told him that he wasn't sociable enough with customers and prospects. The criticism stung, and Gary could have responded with denial or brooding. Indeed, his first response was to interpret the feedback as shallow. Eventually, though, Gary was able to reframe what he'd heard, first by grudgingly acknowledging it. ("He's right, I'm not very sociable. I tested as an introvert on the Myers-Briggs, and I've always been uncomfortable with small talk"). Then Gary reframed the feedback. Instead of seeing it as painful, he recognized that he could use it to help his career. Avoiding possible maladaptive responses, he was able to ask himself several important questions: "How critical is sociability to my position? How much do I want to keep this job? How much am I willing to change to become more sociable?" In responding, Gary realized two things: that sociability was indeed critical to success in sales and that he wasn't willing to learn to be more sociable. He requested a transfer and moved to a new position where he became much more successful.
Break up the task.
Yet another adaptive technique is to divide up the large task of dealing with feedback into manageable, measurable chunks, and set realistic time frames for each one. Although more than two areas of behavior may need to be modified, it's our experience that most people can't change more than one or two at a time. Taking small steps and meeting discrete goals reduces your chances of being overwhelmed and makes change much more likely.
Jane, for example, received feedback indicating that the quality of her work was excellent but that her public presentations were boring. A quiet and reserved person, Jane could have felt overwhelmed by what she perceived as the subtext of this criticism: that she was a lousy public speaker and that she'd better transform herself from a wallflower into a writer and actress. Instead, she adapted by breaking down the challenge of "interesting presentations" into its constituent parts (solid and well constructed content; a commanding delivery; an understanding of the audience; and so on). Then she undertook to teach herself to present more effectively by observing several effective speakers and taking an introductory course in public speaking.
It was important for Jane to start with the easiest task—in this case, observing good speakers. She noted their gestures, the organization of their speeches, their intonation, timing, use of humor, and so forth. Once she felt she understood what good speaking entailed, she was ready to take the introductory speaking course. These endeavors allowed her to improve her presentations. Though she didn't transform herself into a mesmerizing orator, she did learn to command the attention and respect of an audience.
Use incentives.
Pat yourself on the back as you make adaptive changes. That may seem like unusual advice, given that feedback situations can rouse us to self-punishment and few of us are in the habit of congratulating ourselves. Nevertheless, nowhere is it written that the feedback process must be a wholly negative experience. Just as a salary raise or a bonus provides incentive to improve performance, rewarding yourself whenever you take an important step in the process will help you to persevere in your efforts. The incentive should be commensurate with the achievement. For example, an appropriate reward for completing a self-assessment might be an uninterrupted afternoon watching ESPN or, for a meeting with the boss, a fine dinner out.
Excerpted with permission from "Fear of Feedback," Harvard Business Review, Vol. 81, No. 4, April 2003.
Jay M. Jackman is a psychiatrist and human resources consultant in Stanford, California. He can be reached at jayj@stanfordalumni.org.
Myra H. Strober is a labor economist and professor at Stanford University’s School of Education.
SILENCE FAILS
LOS CINCO CASOS CRUCIALESEl estudio en EEUU sugirió que los impactos del silencio son más prevalentes y costosos cuando hay que enfrentar uno de las siguientes situaciones:
Planificación Arbitraria: El proyecto está destinado a fallar cuando los plazos y/o recursos establecidos no se ajustan a la realidad y/o las opiniones de todos los involucrados no se escuchan o se toman en cuenta.
Patrocinador Ausente: El patrocinador del proyecto no ejerce el liderazgo necesario ni provee el apoyo, tiempo y energía requeridos para que el proyecto logre sus resultados.
Negociaciones Paralelas: Las personas encuentran formas de by-pasear acuerdos y procesos establecidos para lograr sus propios objetivos sin medir las consecuencias para el proyecto.
Temor al Fracaso: Las personas no admiten sus incumplimientos y simplemente esperan a que sea otra la persona que admita sus fallos. Anteponen su prestigio personal al éxito del proyecto.
Fallas del equipo: Falta de compromiso o capacidad de uno o todos los miembros del equipo del proyecto. Hablan de trabajo en equipo pero practican la independencia.
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