The dollar auction, or out of the frying pan into the fire

When a decision maker lacks in intellect, judgement or character, these weaknesses are likely (though not certain) to be reflected once his or her decision is put into effect, so it comes as no surprise that organizations with poor leadership are often unsuccessful in their endeavors. Sometimes, however, bad results are achieved even when the decisions that led to them were made by smart leaders in a rational manner and were based on an in-depth analysis of factual data. Either way, once the milk is spilled and it becomes clear that things have gone wrong, the right course of action is to acknowledge the reality, stop the venture, and carry on.

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Playing the blame game

Refusing to take responsibility for consequences of one’s own mistakes is a bad thing. If anything can be worse, it’s putting the blame on others. Those who do so, whether in private or professional life, demonstrate their immaturity and lack of courage, to say the least. Sadly, it is often those at the top of organizational charts who are guilty of this bad practice which is the opposite of what leadership is about.

The original scapegoat was an actual goat.

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Battling the red monster – another success story

Once upon a time, there was a university in one of the largest Polish towns. Among its many organizational units was Institute of Applied Physics (details altered and sanitized for confidentiality), headed by an internationally accomplished Polish professor who believed that scientists should spend most of their time and effort on science, and not on reporting. He made no secret of his views when he was appointed Director of the Institute, which must have come as a shock to many a seasoned bureaucrat in the university Head Office. These people were firm supporters and eager practitioners of the Parkinson’s observation that Officials make work for each other. Being good officials, they felt it was their duty to ensure that the professor and his fellow physicists received their fair share of useless and time-consuming paperwork to be done. Once filled, the lengthy report forms would be sent back to Head Office, like some kind of symbolic tribute paid by a vassal to his lord.

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Battling the red monster

There is some amount of bureaucracy in every large organization. This is not always a bad thing: bureaucratic regulations, if they are clearly stated, reasonable, limited, and consistently followed by all concerned, can be useful. They act as an enabler for a number of standard corporate processes, helping them run in a smooth and predictable way. More often than not, however, the scale of red tape in organizations tends to get out of control – the number of regulations (and mandatory tasks they generate) is continuously increasing, while benefits of complying with these rules are becoming more and more questionable. In a nutshell, what results is the tail wagging the dog.

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“Culture eats strategy for breakfast”. Practical implications for corporate leaders (part 2)

In contrast to the bad practices described in the previous post, today I will discuss a spectacular real-life example (the do’s) of a cultural transformation which helped a troubled company implement its new strategy and become successful again. The leader’s role in this transformation has been hard to overrate. I have found this story on a fantastic blog, which I strongly recommend to anyone interested in management.

After several years of mediocre performance that culminated in losing an important tender, the top management of a Japanese company realized that they needed to take radical steps to keep the company afloat. The executives showed good judgement when they turned for feedback to the company which has just turned their offer down. By doing this, they demonstrated that they were willing to treat failure as a learning opportunity, and that approach does not seem common in the corporate world. After all, it’s easy to find a scapegoat and punish him, or at least put the blame on unfavorable objective circumstances. It’s difficult and sometimes risky to acknowledge accountability for a setback, conduct a fact-based analysis, and follow the findings even if it means leaving your comfort zone. On the other hand, it takes humility and courage to rewrite your strategy based almost exclusively on actual client feedback, even when this client is a large and successful company. Incidentally, almost all companies these days maintain that customer (client) satisfaction is a key goal for them, but only few follow these declarations with actions that are actually driven by the Voice of the Customer. Instead, managerial decisions often appear to be based on preconceived notions or a political consensus. Which would be just fine if only these factors were good reflections of reality, which, as we know, is not always the case. Continue reading

“Culture eats strategy for breakfast”. Practical implications for corporate leaders (part 1)

Cultural issues are known to have thwarted seemingly excellent strategies in all kinds of industries around the world. Therefore, more and more executives tend to understand that a successful implementation of a company’s strategy requires that it is aligned with the firm’s corporate culture, in addition to a number of otherwise crucial tangible prerequisites. In other words, if the prevailing culture is a stumbling block for the implementation of the strategy, then at least one of them needs to change for the incompatibility to be eliminated.

Assuming that the strategy must remain intact, the question is: what can a leader do to cause a lasting change in a company’s culture? (To avoid semantic confusion, lets’ use Kotter’s definition whereby “Culture consists of group norms of behavior and the underlying shared values that help keep those norms in place”). This task can be tackled in a variety of ways. Easier said than done, that’s for sure, as illustrated by countless failure stories. For this reason, and because it is best to learn from the mistakes of others, it is worth starting by going over some of the worst and most rampant errors (the dont’s), such as those the following scenario abounds in. Continue reading