Thursday, June 9, 2011
Wednesday, June 8, 2011
This post is by Greg Kesler and Amy Kates, managing partners at Kates Kesler Organization Consulting, the authors of “Leading Organization Design: How to Make Organization Design Decisions to Drive the Results You Need.” The authors consult with global companies trying to maximize value-delivery through organization design. E-mail them at firstname.lastname@example.org and email@example.com.
Get ready to rumble
For years, leaders have tried to create smooth-running organizations where complexity, tension, conflict and overlapping lines of authority are at a minimum. Organizational simplicity is great when the business is simple. But in a complex, multi-divisional company, managing brands across several products and geographies things get more complicated and fights break out.
Learn to love it. Harmony is often the wrong goal. When there is no tension among your businesses and functions and geographies, there’s a good chance you’re leaving value on the table.
Come out fighting
Senior leadership must learn to cultivate conflict. There has to be tension in the matrix — but it has to be the kind of tension that works for customers, shareholders and the assorted teams inside the business.
Nike’s money-making matrix
Nike gets it right. The company has to market a core brand across a number of consumer categories with hundreds of products all over the world. That’s a recipe for creative conflict. The global soccer consumer program may have produced record-shattering results. But the seasonal storyline has to deliver for basketball, running and fitness. South Africa wants to go one way on footwear design while the Netherlands, Brazil and Korea may argue for something else.
To ignore any of these competing voices diminishes Nike’s potential of Nike’s powerful blend of brand, design and market reach. Executives risk bad compromises if they try to keep things simple or conflict-free.
Adding conflict and complexity
How to add conflict and complexity the right way? Look to two places: smart “organization design” and the right leader behaviors and skills.
Forget straight lines and dotted lines
Smart organization design isn’t about straight and dotted lines. It creates conscious power sharing and brings conflict out onto the table. It dictates that one voice gets a stronger vote on brand decisions, while another gets the golden vote on channel management and yet another on product design. Even in giant functional organizations like Cisco, the decision rules are spelled out. At Nike, once all voices are heard, leaders don’t dither. It’s not always a pretty process, but decisions get made and things happen fast.
Aligning structure, processes, measures and how you pay people are all critical. And you have to get the right talent in the right jobs.
Leaders who can make conflict productive
Companies from GE to Green Mountain Coffee Roasters are teaching leaders how to lead in complex organizations. There are four things leaders in the matrix need to learn:
- Build the right networks and relationships
- Manage up and sideways — with aligned targets and initiatives
- Influence with more compelling ideas and personal sources of power
- Make conflict work — lead through polarities for greater creativity
The cost of management time is higher in complex organizations. That’s unavoidable. But poor decisions, delayed decisions and confused roles are ultimately more costly. By designing organizations and developing leaders to make the conflict work, you can recoup the cost by getting all possible value out of your assets.
Managing in complex environments. Yes.