Tuesday, 25 September 2012

The Constraints of Organisational Hierarchies

It’s an old chestnut, isn’t it? Whether we’re trying to retain existing people or hire new ones. In fact, almost any time we want to do anything with our staff we bump into the immovable object that is our organisational hierarchy. Of course this isn’t a unique problem for us in Information Technology, but we do face the complexity of a wide spread of functions – and some pretty deep technical skills that, at the top end, often imply seniority even when our org charts might suggest otherwise.

More often than not, we tackle our organisations in an essentially traditional way – and it’s this approach that creates problems. Here are six of the constraints we impose on ourselves by doing so:

·         How we draw organisations. We start with a pyramidal chart – one box at the top, many at the bottom – each box joined to one or more others with ‘solid’ lines. It is a rigid framework.

·         How we think about organisations. When we look at our org chart, we want to put a name in each box. We don’t think about what people actually do, we think about which box they best belong in.

·         We fail to reflect what is important within our business. Very often we don’t consider what IT means to the business we support. We ignore it. We put on our blinkers and draw up our structure based on IT skills, processes, functions alone.

·         Driven by command & control need. Knowing that everyone is ‘owned’ by someone else is comforting. It means that our people can be controlled, told what to do. To some extent it absolves us of ownership. Yet it constrains our people too.

·         Need to be clear on responsibilities / accountabilities. We kid ourselves with pretty job descriptions and ‘roles and responsibilities’. We pretend. We tell people they are responsible – or accountable – but never give them the freedom (within our organisations) to actually do the job we need them to.

·         HR processes demand ‘managers’. And at least once a year (for annual reviews), and increasingly more often than that, we need to comply with HR processes – and HR processes reinforce the solid line, command & control approach of traditional organisation design.

 I’m sure much of this is frustratingly familiar. Be great to sweep it away, wouldn’t it? But it’s actually not that simple, not only because it’s difficult to do so, but because we – including our staff too – help to perpetuate the model. Think about what the majority of people want within an organisation and how they measure themselves. Think about what people expect and what self-esteem looks like to them.

They want ‘seniority’. They want to get as close to the top of the pyramid as possible. Some people would sweep the car park or clean the toilets if it meant they could take another rung towards the top. Then many want more money, better benefits, and this almost always equates to the same thing – taking another step up the ladder. We take the Peter Principle and guild it! Not only do we promote people who aren’t managers and make them managers (it’s what they want, after all, and doing so saves a retention headache for us!), we often accept that we are going to lose their core skills in the process. The very thing that makes them valuable to us and our business suddenly becomes of secondary consideration. “Bill was a great Project Leader, but now he does a s*** job running a team – and we’re both really happy about it…”. Doesn’t sound quite right, does it?

At the heart of these problems is the fundamental flaw that our organisations fail to recognise value. They are not based on value. If Bill is a great Project Leader – and the role is an important one –  then let’s pay him for the value he brings by doing that job. If we get the benefits element of such recognition sorted, of course, this may mean Bill doesn’t get to run a team – and then we run into the fact that Bill hasn’t moved boxes on the chart. The money’s great, he says, but…

So something needs to change. And it’s not just for us, but for our people too. It’s a cultural shift.

Organisation structures are inevitable. Whether we like it or not, command and control is a fact of corporate life and will not go away. On that basis, we will continue to need to recognise a series of superior-subordinate relationships in our working world.

How we think about organisations; articulate, communicate, draw them. Given that inevitability as a starting point then, we need to change our approach to organisation charts; how we think about them, articulate, communicate, draw, promote and populate them. Hard to do? Certainly. But here are a couple of possibilities. Don’t have one person per box; break that link. And in terms of seniority, don’t have one Management Team (‘top layer’), but have multiple management teams depending/focused on the area/function/thing being managed; that way you can bring more relevant expertise into each MT and allow more people to experience ‘management’.

The roles / boxes within org charts. Stop thinking about the boxes as ‘jobs’ and try to start thinking about them as the things people do – things that are relevant to and add value to the overall business. Make your job descriptions focused on outcomes and values rather than filled with meaningless ‘weasel words’. It will make performance management – good and bad – much more relevant.

Reward mechanisms. Change the reward mechanisms!

Sweep the organisation away!

OK, sounds dandy, right? But in the real world…? Well, come on!! And if this is your objection, you’re right. The vast majority of us don’t have the freedom – or don’t think we have the freedom – to be ‘radical’. We may not have the money, the flexibility. Indeed, our people may not want it. And, let’s face it, we already have org structures, job descriptions, HR processes, the annual review process… We have our uncomfortable ‘comfort blanket’.

Clearly, if you were starting from scratch and setting up a new organisation with new rules and new people, then you have a chance. But, having said that, don’t dismiss the opportunity by just throwing it in the ‘too difficult’ category and going back to the Neolithic ways we run our people structures today. Take a look. Think about it. It might just be possible. What would you need to do..?

1 – Start with a blank sheet of paper; ignore your current org chart. This will be difficult for two reasons: firstly, because your structure might be imprinted on your brain, and secondly because you know your people, don’t you? And you know where they ‘fit’ and what they do… But you do need that blank sheet of paper.

2 – Plan to divorce org framework from benefit structure. Try to forget that traditionally the closer someone is to the top of the page, the more money they earn. Think about the contents of your reward structure – pay, car, bonus – as tools to be used, not things that are pre-ordained.

3 – Think about what the IT function actually needs to do. And don’t think in terms of technical roles if it all possible, but try and articulate what you need people to do/achieve in more relevant business terms. For example, you need to make your systems available across your branch organisation, rather than you need an Network Engineer Grade 2 (you’ll make that connection later). By undertaking this step, you may well uncover some roles you need that your current organisation does not have – and what will that tell you?! [And from here on, I distinguish between ‘jobs’ – the post a person holds – and the ‘roles’ that people perform i.e. what they ‘do’. A ‘job’ may be a combination of ‘roles’, so ‘roles’ are most likely not full-time; a ‘role’ may need to be carried out by multiple people.]

4 – Once you have a profile of the many roles you need performed – and you’ll have to be prepared for this list to be longer than your current headcount! – then you’ll have to moderate your list in terms of the numbers of people, on balance, you need to meet those needs. So, using your judgement and experience, think hard about how many people you really require – and what they need to do – to make your systems available across your branch organisation or to man your Service Desk. Maybe you’ve always had twelve people on the Service Desk in three teams of four, and you know that works – but that may not be the right answer. It could be more or less, depending on your review of what they actually need to be doing. Be careful you don’t over-estimate the size of a role: does a person really spend 50% of their time preparing service reports..?

5 – So, having been hard on yourself, now you have a list of roles and approximate numbers of people you need to perform those roles. You can begin to group roles into jobs. “If I got someone to do this role 50% of their time and these two roles 25% of their time… That actually looks like an interesting job!”

6 – With jobs defined, now you can think about how they logically go together in an org structure. But remember, this org structure is not the end goal; it is merely a mechanism to allow the minimum command and control you need, to maintain HR processes etc. It’s not how you will run your department. And if you have a job that you need many people to do, then don’t draw one box for each job – not at this stage – just one box maybe annotated to reflect multiple job holders.

7 – Now it gets tricky! You need to think about the jobs you have defined – and their component parts, the roles performed – in a variety of ways in order to come up with the rewards for executing those roles and doing those jobs. So you might consider the following requirements:

·         managerial skill needed and people responsibility (based on your new draft org)

·         decision-making responsibility

·         value to business (ideally in ££ or some business metric)

·         uniqueness / scarcity of skills

·         market rates

·         business / technical knowledge

Establish benefit ranges for each role, and therefore for each job. This exercise might also allow you to refine your jobs. For example, you have two roles that require company cars or significant travel in order to be executed successfully – but you find you have split them across two jobs. Can you combine them in a single job and therefore save the expense of that second car or that travel?

8 – At this stage – and we’re well into the process now – we have yet to talk about your people i.e. those who hold posts in your current structure. Well do so now. But not in the sense of the jobs they are doing or the roles they perform, but in their own right; what are they, as individuals, worth to you? There are some fundamental things you should consider, for example: potential, attitude, criticality, productivity, flexibility. Those attributes are worth something, and that something could be concrete. You will have people who are invaluable, but in lower paid roles – this is your chance to recognise that. Undoubtedly – and unfortunately – the reverse will be true too!

9 – So now you have your two critical components: a new organisation more closely based upon what you need to be doing, hopefully with a more value-based assessment of their worth to you; and a reflection of the importance of the individuals in your organisation, independent of their current post. Now all you need to do is to pull the two together! Here, of course, is the greatest problem of all. Whether you can appoint people into roles or need to advertise and go through a process will be driven by your company policy, the size of the change you would need to make, the numbers of redundancies or hires etc. And make no mistake, this is a big deal! So big a deal in fact, that it may just not be possible. But even if you just undertake steps 1 to 8 privately (which you probably should as much as you can), the organisation you come up with, the roles within it, and the rewards potentially attached to your people and the jobs they do, will be far better than the one you are faced with today.

Try it. I doubt it will be a waste of time. You can execute all the way through to step 8 – there is nothing truly stopping you. If you did so, you would learn a lot about your organisation and your people – and the service you deliver to your customers. Maybe undertaking that final implementation piece is one step too far. But it may be simply be that it is too big to tackle in one go – your organisational elephant. If so, it may yet provide you with an aspirational place to strive for, and that could allow you to put in place a plan that will – over time – get you there, and maybe free you from the chains of your current organisation structure.

8 – About the author / copyright

Ian Gouge is widely experienced in business-driven Information Technology, culminating in significant achievements majoring on organisational and process change, and with a proven track record in turning around / re-engineering IT functions. He possesses in-depth experience of change, transformation, IT delivery, customer and supplier engagement, and broad International exposure. Also the author of management books on the topics of IT strategy and project management, the impact on IT of e-business, and the IT organisation.

This material is copyright of Ian Gouge © 2012. All rights reserved. Any similarity to actual IT or business organisations is entirely coincidental and unintentional.

Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following:

·         you may print or download to a local hard disk extracts for your personal and non-commercial use only;

·         you may copy the content to individual third parties for their personal and non-commercial use, but only if you acknowledge the author and blog as the source of the material.

You may not, except with express written permission from the author, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system.


Sunday, 16 September 2012

The Leadership Prism

There can be little doubt that one of the most significant topics currently taxing the minds of businesses, organisations, consultants and academics alike is that of leadership. Although not a new subject – intellectual discussions and debates around the leading of people have, in various fields, taken place for very many years – the commercial world is now experiencing a major focus on “leadership”. For example, between 2003 and 2004 in excess of three thousand books will have been published on various facets of the subject, with this body of work supported by many more academic papers, treaties and theories.

But why is this so? Why leadership and why now? As with almost anything related to the topic, a simple unequivocal answer is unlikely to be found; however, we might point to a number of influencing factors. Perhaps the evolution of “commerce” generally into a dynamic, high-pressure environment where the gap (and time) between success and failure is narrowing has moved businesses away from cosy, family-led affairs where change took an age and security was everything. Computerisation, the Internet, new methods of communications, engagement and so forth have all accelerated the business life cycle. In the past, firms led by inadequate leaders might survive for years without issue; in the twenty-first century, this is clearly not the case. 

One might also point to something of a rise in the cult of – or preoccupation with – leading businessmen. How often is Jack Welch, former CEO of the General Electric (GE) empire held up as a beacon of leadership, then quoted and misquoted? Our increasing fascination with other people – exemplified perhaps in the inexorable rise of reality television – has seen a dramatic increase in the numbers of biographies appearing in our bookstores. Whilst many of these are of “celebrities” or sports stars only just out of nappies, the more mature business icon has managed to muscle in on just a little of the action.

Inevitably, leadership is a subject that will always be ripe for dissection and re-assembly, for new slants, propositions, manifestations and so forth. Clearly this is partly because it has its own fascination; partly because, as Bennis (1999) says, “leadership remains an elusive concept”; and partly because unlocking the secrets of leadership – finding that “silver bullet” – represents for many some kind of organisational Holy Grail.

One of the modern strands of theory in this area revolves around the notion that leadership is not an attribute or responsibility confined to the very apex of any resource structure, but that evidence of leadership can be seen – indeed, should be seen – throughout all echelons of the organisation. The ideal of “leading by example” has, for many, focussed largely on the purported “leading” and less on the tangible “example”. A more worrying trend, however, is the endemic lowering of the leadership high-bar; the systematic – and theoretical – attempt to move the threshold where leadership actually starts within an organisation.

Let us assume that a business has someone at its head – the CEO, perhaps – and they have a number of people who report to them as a management team. There may be a further cascading of managers beneath them through to the bedrock of the organisation at the “coal face”.

<figure 1.1 – The Traditional Organisational Pyramid>

Although much simplified, this basic model demonstrates clarity in structure and clear delineation between “Leadership”, “Management” and “Execution”. The business can, quite naturally, only have one “Leader” – but what do you do with a significant pool of presumably talented managers in terms of career development, and satisfying ambition and aspiration? For many organisations the fashionable answer seems to be: “Turn them into Leaders”. Thus we find hoards of senior and middle managers embarking on skeins of leadership training, immersing them in theories and techniques, and giving them tools which – in the harsh light of day – may be largely redundant or impossible for them to adopt in their day-to-day role.

There are immediate issues in this approach from the perspective of the business itself.


<figure 1.2 – The Revised Organisational Pyramid>

Our simple organisational pyramid has now been revised from a position where there was one recognised “Leader” to a situation where many different people are either adopting portions of this mantle or adding their own slant. Whilst for a very few individuals this may be practical (if they run a significant sub-unit within a larger whole), in doing so, it is absolutely inevitable that for the new collective leadership team their roles, visions, beliefs, responsibilities, accountabilities and individualities will result in an organisation where the leadership of the business – in terms of style, direction, ethos etc. – may be all over the place. Clarity is sacrificed and, if this needs to be re-established and the new leaders “reined in” and told to work within a prescriptive framework, then the collateral damage could be considerable.

Additionally, as the model suggests, there are further fundamental considerations. For example, promoting more people into leadership roles requires a true delegation of power and authority if they are to have any chance of succeeding. Additionally, if we now have Managers spending more time trying to be Leaders, it is likely that they will delegate some of their management tasks down the chain of command. The end result could be more “Managers” carrying out the same range of management tasks, greater bureaucracy supporting the longer management chain, and possibly the pool of “Execution” resource actually reducing with the business suffering accordingly.

There is another argument against the modish proliferation of leadership training and empowerment, and that is quite simply that being a good manager does not necessarily make someone a good leader (nor someone who excels at execution, a good Manager). In many respects this is an example of the well-established “Peter Principle” (Dr. L. J. Peter & R. Hull, 1969); the notion that people are, through being good at their job, eventually promoted into one for which they are neither qualified nor competent enough to execute successfully. The Manager-to-Leader transition is both more subtle and more significant, however: more subtle in the sense of the complexities around what makes a good Leader (with the individual themselves as the basic building block), and more significant in the potentially negative impact on the entire operation that having the wrong person “leading”.

My broad premise is the argument that leadership is not the next automatic career step for Managers, and that there is a fundamental difference between leadership and management. There is a clear need to understand and establish of what these differences consist, and to articulate them in such a way as to enable the “reverse engineering” of leadership concepts into any organisation in the most appropriate way and at the right level. By considering many essential leadership attributes, we can to demonstrate that the demands of leadership are radically different from those of management and require an entirely different approach and style – a challenge to which many Managers simply cannot rise.

There is almost a philosophical point to our argument here; the notion that a fundamental difference exists between leadership and management, and that this difference is so basic that it predicates a clear delineation between the two disciplines. Any such difference is difficult to articulate in a black-and-white way of course, and as with so much in leadership theory, there is an element of personal belief in terms of the stance one instinctively takes on the subject. For those managers in whom expense is invested to make them “Leaders” – and for the organisations that make those investments – one might expect a firm rebuttal of the distinction. Indeed, any school of thought that promotes the notion of leadership being everywhere within an organisation can surely take no other view.

The assertion made by the Southwest Educational Development Laboratory (SEDL, 2004) that “in educational organisations there is an assumption that leaders of educational change should be both leaders and managers” is a position that very many industries, organisations and individuals would certainly take. Indeed, it would be futile to argue against their associated argument that “no single characteristic can distinguish leaders from non-leaders” (SEDL, 2004). However, it is possible to build an argument in favour of differentiation based on what Leaders and Managers actually “do”, what their responsibilities are, and how they approach the problems they face.

The Institute of Management Excellence (IME, 2003) published a table which attempted – at a relatively crude level – to differentiate between Leaders and Managers:

Concentrate on strategy
Nurture culture
Determine scope of problems
Search for alternative solutions
Correct strategic weaknesses
Build on strategic strengths
Wield authority
Apply influence
Seek uniformity
Pursue unity
Manage by goals/objectives
Manage by interaction
Employ consistency
Elicit creativity
Plan around

<table 1.3 – Leaders vs. Managers>

Clearly an analysis such as this aims to polarise the notions of “Manager” and “Leader”, and to pigeonhole each into diametrical opposition: Controlled vs. Flexible, Logical vs. Intuitive. Debates could rage indefinitely around such a framework, with Leaders demanding recognition for their consistency, and Managers’ asserting that they are indeed flexible. What is certainly less likely to be up for debate is that the roles and responsibilities associated with “leadership” and “management” are not the same, and that the effective execution of these responsibilities will de facto demand skill-sets which may well be different or, at the very least, divergent.

A man might be regarded as a great footballer – but that is likely to be within the context of the position he occupies within the Team (or organisation). Perhaps he is the main striker, responsible for scoring more goals than anyone else during the season. Put that player in the team as the goalkeeper; would he still be regarded as a great footballer? Same man, same organisation; different responsibilities and role – and different skill-set needed to execute effectively. And just because an individual is a great footballer, whatever position he occupies, does it logically follow that he will make a good team captain?

To a certain extent, definition is key. Bennis’ view (1999) that “leadership is the key to realizing the full potential of intellectual capital” is all very well, but where does this kick-in organisationally? Are we talking about just the guy at the top of the pyramid? In very large multinationals or conglomerates, this would clearly not make sense; effective leadership will be needed at the level of individual territory, or business line. And what about within a single-nation, single-product business or organisation? Is one Leader enough? Should there be “leadership” at the head of each function – even if that function employs just five people?

Once again, those seeking clear-cut definitions are going to be thwarted. Even useful contributions to the debate such as Ready’s view (2004) that leaders “see the enterprise as a whole and act for its greater good” is open to the challenge that everyone within the organisation presumably works for the greater good of the whole. Are they all then, by default, Leaders?

As far as a dictionary definition is concerned, a Leader is someone who “rules, guides, or inspires others” (Collins, 1979). On the other hand, a Manager is “a person who directs or manages an organisation, industry, shop etc.” (Collins, 1979), where “to manage” is “to be in charge (of); administer”. There is a difference in emphasis here which supports the premise upon which my argument is based. The guidance and inspiration of leadership undoubtedly occupies a different plain of activity from a manager’s focus on “administration”; the suggestion of “rule” offers a higher degree of authority over simply “being in charge of”. These differences are surely also borne out in the responsibilities and accountabilities for each – the Manager’s objectives most often being task- or project-focussed and originating at some point from a direction set by the organisation’s Leader. It is interesting that the Southwest Educational Development Laboratory (SEDL, 2004) also make reference to the well-worn maxim that “Managers do things right; Leaders do the right things”.

If we return to the suggestion made earlier that to simply promote Managers into the role of a Leader can generate examples of the Peter Principle, then we need to consider how and why such failures might manifest themselves. Assuming that the assertion that the roles – and therefore the skill-sets needed – are significantly different, given the body of work carried out on leadership in the recent past, finding supporting arguments should not be too difficult.

Research undertaken by Kaplan and Kaiser (2003) suggested that, when Managers needed to adopt leadership roles they showed a bias towards particular leadership styles, for example preferring a forceful approach to a more enabling one. (There are, of course, echoes here of the Institute of Management Excellence’s table shown in the previous section.) Additionally, they concluded that “inadequate performance is usually defined as displaying a lack of [seemingly contradictory] qualities and skills”. There are two threads we might choose to take from this statement: firstly, that effective leadership requires a complex range of multidimensional skills, aptitudes and abilities on the part of the Leader; and secondly, that many Managers fail to display or adopt that multidimensional profile. There should be nothing surprising here, given the nature of the generic leadership and management roles.

Further work, by Conger and Nadier (2004) also suggested that “a … reason for failure by new CEOs is their often narrow expertise and inability to set a proper context as a leader”. This observation offers harmonic backing to the general notion of a skills or abilities mismatch. The Chief Executive Officers to whom Conger and Nadier refer would almost inevitably have been Managers for a large portion of their careers, and have stepped up into leadership roles that have left them exposed. This kind of promotion chain (the top rung of the ladder) is relevant to all but the fewest commercial Leaders, the prime exceptions being those who – like Richard Branson of the Virgin group – have built business themselves from nothing, and have largely been “Leaders” for their entire careers.

It is important that we do not denigrate the abilities, attributes and contribution of Managers. After all, there are many more Managers than Leaders by some significant factor, and the success of businesses world-wide will be achieved through the efforts and application of many millions of “Managers”. If we are not say – and we are not – that Leaders possess more skills than Managers, are more sophisticated, more intelligent and so forth, then how might we simply articulate the fundamental difference between the two disciplines?

One approach is to consider breadth, both in terms of the challenges faced and results required. Let us consider Managers first. We have already suggested that by and large Managers will operate within a framework that is laid down for them, and be requested to apply their many and various skills to problems or tasks that have been specifically defined. For example, if you wish to build a bridge or install a new computer system a Project Manager would be employed to effect the delivery. They would apply their knowledge, skills and experience to the task within some kind of project management framework, produce plans and schedules, monitor activities, and focus on the final objective. In this sense, the focus is the key thing.

In figure 1.4, this is demonstrated in terms of a “Management Lens”. The various skills of the Manager go into a lens in such a way as to direct all of these energies towards the end goal. Achievement of this goal – the “point of focus” – almost inevitably demands a level of detail; a second observation about the management profile. Of course, many senior managers will be tackling multiple points of focus as they go about their daily business. This does not make them Leaders however, particularly if they are replicating the same lens-like approach to more than one objective.


<figure 1.4 – The Management Lens>

From the point of view of leadership, the picture is very different.


<figure 1.5 – The Leadership Prism>

Here we would argue that in order to address a particular challenge, a Leader needs to tackle it in a completely different way. The Leader’s approach to resolution must be a prismatic or multidimensional one, bringing a whole raft of non-detail centric and divergent skills to bear upon the issue. These might include any combination of tools such as vision setting, communication, employee relationship management and so on. If the Leader’s instinct is to focus on the specific task and low-levels of detail, then they will continue to operate at the management level – the kinds of failings notes by Kaplan and Kaiser, Conger and Nadier.

What do these simple models suggest in terms of the underlying difference between leadership and management? I would venture that the critical divergence might be considered in the following areas:

Executing within
An overhead
A necessity

<table 1.6 – The Scope of Leadership and Management

However we choose to articulate these roles – and however finely we attempt to make concrete the delineation between them – there can be little doubt that “Leaders and leadership are crucial but complex components of organisations” (SEDL, 2004).

‘The Leadership Advantage’, W. Bennis. ‘Leader to Leader #12’, Spring 1999
‘The Peter Principle: Why Things Always Go Wrong’, L.J.Peter & R.Hull. Souvenir Press, August 1994
‘Leadership at the Enterprise Level’, D.A.Ready. MIT, Spring 2004
‘Developing Versatile Leadership’, R.E.Kaplan & R.B.Kaiser. MIT, Summer 2003
‘Collins English Dictionary’. Collins, 1979
‘When CEOs Step Up to Fail’, J.A.Conger & D.A.Nadler. MIT, Spring 2004


 Ian Gouge is widely experienced in business-driven Information Technology, culminating in significant achievements majoring on organisational and process change, and with a proven track record in turning around / re-engineering IT functions. He possesses in-depth experience of change, transformation, IT delivery, customer and supplier engagement, and broad International exposure. Also the author of management books on the topics of IT strategy and project management, the impact on IT of e-business, and the IT organisation.

This material is copyright of Ian Gouge © 2012. All rights reserved. Any similarity to actual IT or business organisations is entirely coincidental and unintentional.

Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following:

·         you may print or download to a local hard disk extracts for your personal and non-commercial use only;

·         you may copy the content to individual third parties for their personal and non-commercial use, but only if you acknowledge the author and blog as the source of the material.

You may not, except with express written permission from the author, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system.