The organization mansion has many rooms.

Business schools tend to divide their curriculum between hard quantitative-oriented courses (such as operations management and finance) and soft behavioral courses (such as change management, ethics and leadership). The former relies on a run-by-the-numbers management approach. The latter recognizes that people and human behavior matter most. This separation of the curriculum is like chambers in a mansion.

In one set of chambers are managers who apply the quantitative approach of Newtonian mechanical thinking. They see the world and everything in it as a big machine. This approach speaks in terms of production, power, efficiency and control, where employees are hired to be used and periodically replaced, somewhat as if they were disposable robots.

In contrast, in another set of chambers are managers who apply the behavioral approach. They view an organization as a living organism that is ever-changing and responding to its environment. This Darwinian way of thinking speaks in terms of evolution, continuous learning, natural responding and adapting to changing conditions.1 

Different Rooms for Different Functions

Regardless of the use of the Newtonian or Darwinian managerial style, specific rooms in the mansion are dedicated to functions such as developing new products, marketing to acquire new customers or fulfilling customer orders by delivering products and services. We often refer to these functional rooms as silos. Suboptimization typically exists among the rooms. Managers operate their rooms to their own liking. In the old days, each room had its own fireplace, so the room's comfort level was individually controlled. When the mansion was refitted with central heating and air conditioning, the managers were increasingly forced to compromise and agree. Most managers were not happy with the new arrangement.

In today's organization mansion, there is an increasing need to understand how one's room affects another. For example, managers in the production room have grown to like a minimalist décor with low inventory clutter so that they can quickly assemble parts in reaction to widely varying tastes of customers. In a neighboring room, sales managers like tall stacks of products so that they never miss a sales opportunity due to a shortage. A growing problem in the mansion is that these managers' methods increasingly affect each other.

Teamwork and collaboration is the ideal way to live in the organization mansion. However, despite all the encouragement from scholars and media, good teamwork is tricky to attain. Success comes only to those teams of people who place their own self-serving interests below the more important needs of their organization. The mansion is more important than its rooms.

As Patrick Lencioni describes in his book The Five Dysfunctions of a Team, one problem in team behavior cascades into another that collectively escalates to degrade any organization's performance.2 For example, when different managers secretly tamper with the mansion's central thermostat, they are exhibiting an absence of trust in each other. Rather than confront one another, managers typically avoid conflict. Instead of debating what will work best for all, they resort to secret discussions with a few other "room" managers. Once someone inserts authority and resets the thermostat, the adverse consequence is a lack of commitment to it by others because they feel no one listened to their opinions.

The breakdown in teamwork then gets worse. Because of the lack of commitment and buy-in to choices made by others, room managers avoid accepting accountability for the conditions (i.e., performance) of their own rooms. They begin locally adjusting things to offset what they don't like, and they pay less attention to the mansion as a whole. They revert to putting their individual needs above the collective goals of the team. Total performance does not improve and may possibly decline.

The Performance Management Chambers

My belief is there are some rooms, perhaps just closets, where managers see usefulness in blending the characteristics of the Newtonian and Darwinian styles. They also believe in teamwork and collaboration. The trick to general management is integrating and balancing the quantitative and behavioral approaches - and behaving as a team. These managers of the closet rooms are the ones who understand the full vision of enterprise-wide performance management to be the seamless integration of multiple managerial methodologies - such as customer relationship management (CRM) and Six Sigma quality techniques.

Command-and-control style managers who prefer to leverage their workers' muscles but not their brains run into trouble. Ultimately, things get done through people, not via the computers or machines that are simply conduits for arriving at results. Most employees are not thrilled by being micromanaged. The good performers are people and teams who manage themselves and positively collaborate with others, as long as they are given some direction and timely feedback. Management creates value by communicating strategic direction and produces results by leveraging people who focus on how to get there. The capability of people may arguably be the most wasted asset of an organization.

In a performance management mansion, each chamber is furnished with strategy maps that set the direction from the executive team. Each room is further provided information and analysis tools, heavy with predictive analysis, so its people can determine ways to achieve the strategy. Balanced scorecard dashboards are in each room for feedback so that everyone knows how they are doing on what is important. The mansion has a single enterprise-wide information platform rather than many disparate out-of-sync data sources. People are empowered to quickly make decisions because they increasingly lack time to seek answers from higher-level executives. By behaving as a good team and collectively collaborating, managers in this mansion don't just manage performance - they improve performance.

The performance management mansion has many rooms, but its managers are all on the same team.

References:

  1. Stephan H. Haeckel, Adaptive Enterprise: Creating and Leading Sense and Respond Organizations. Boston: Harvard Business School Press, 1999.
  2. Patrick Lencioni, The Five Dysfunctions of a Team. San Francisco: Jossey-Bass, 2002.