Tag Archives: decision making

The Bloated Organization

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From the Ask Tom mailbag –

Question:
I grew up, as a manager in a small company. I just received an offer, which I accepted at a large company with over a thousand employees. As I look around, and I know this is a corporate structure, I feel a little lost. There are managers of this and that, directors, senior levels, junior levels. I got a copy of the org chart, looks like there are about eleven levels between the clerical team and the CEO. I have only been here for two weeks, but it looks like chaos. Even the meetings I attend seem misdirected. There is a formal agenda that gets blown through quickly, then there is a discussion (argument) that goes until the end of the meeting (always ends on time). Did I make a mistake? Should I have stayed at my old company? (Unfortunately, too late, they already filled my old position.)

Response:
At least they end their meetings on time.

I often get a call from a company like this, complaining of two things. They think they have a communication crisis or a personality conflict between two people. The company wants to know if I can arrive, do some personality profiling and conduct a communication seminar. Your description gives me better clues to what is really going on.

In most cases, I do not believe in communication breakdowns or personality conflicts. I believe there is a structural issue. Structure, organizational structure, is simply the way we define the working relationships between people. On paper, it looks like a chart, in real life, a messy chart.

The most important definition in working relationships is two related concepts, accountability and authority, one goes with the other. To be accountable for an output, I must have the authority to make a decision or solve a problem in the way I would have it solved. If I have the authority to make such a decision, I must also have the accountability that comes with it.

This basis for organizational structure, accountability and authority, also provides guidance for the number of management levels required. Without much more due diligence, my intuition tells me this organization needs no more than five levels, meaning it needs no more than five levels of accountability.

Organizations, like the one you described, get bloated because there is no framework for decision making or problem solving. Supervisors get promoted to manager because someone needed a raise and got a title instead. Or, someone got a raise and needed a title to go with it. Or, an underperforming team member needed more supervision, so they got a special manager to watch over them (instead of a demotion or termination). Organizations get bloated for all kinds of reasons. And, that bloating costs the company in decision friction and problem solving throughput.

But, you are in a situation you are stuck with, at least for now. And you are likely a junior manager with lots of accountability and little authority. Here is your first baby step. Get clear with your manager, in each key area of your role, what is the specific output and how often will that be reviewed. For each accountability, what is the authority you have to make a decision or solve a problem in the way you would have it solved. That will keep you from getting fired in the first 60 days.

Check back with me then and tell me what more you have learned.

Bring Value to Decision Making

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“So, you believe, when your manager left you to solve the problem, simply by asking you questions, that brought value to your thinking. Are you sure your manager wasn’t just being lazy, maybe indecisive herself?” I asked.

“Oh, no. Quite the contrary,” Kim replied.

“Are you sure?”

“Absolutely, my manager was clear about decision making. We even had three meetings together just to make a list of all the decisions that needed to be made in our department. Then we grouped the decisions according to who had the authority. Here is the list –

  • Decisions I could make, and didn’t even have to tell my manager.
  • Decisions I could make, but had to tell my manager, after the decision was made.
  • Decisions I could make, but had to tell my manager, before the decision was made.
  • Decisions I had to discuss with my manager, but the decision was still mine to make.
  • Decisions I had to discuss with my manager, but the decision was my manager’s.
  • Decisions my manager would make without discussion.

So, my manager was clear about decision making authority in our working relationship.”

Not in the Job Description

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Across the lobby, I spotted Kim. Out of seven supervisors, she had just been promoted to manager. She had a good team, positive vibes, but I could see Kim was a bit nervous in her new role.

“How’s it going?” I asked.

“Pretty good, so far,” Kim replied. “I think I can handle all the stuff I am supposed to do. It’s that other stuff, I am worried about.”

“What other stuff?”

“Team stuff, morale, the stuff not in my new job description. You talk about bringing value to my team. I want to do that, but I am not sure what it means.”

“It’s not that difficult,” I replied. “Just think back, when you were a supervisor. What did your manager do that really helped you, I mean, really helped you become the manager you are today? Was it barking orders at you? Bossing you around? Yelling at you when you screwed up? Solving problems for you?”

“No,” Kim replied. “It was none of those things.”

“So, think about it. What were the specific things your manager did that brought value to your problem solving and decision making?”

The Learning Never Stops

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We are in the process of learning and the learning never stops.
What are the impacts to your business model?

  • Pretty much everyone has discovered Zoom. It is not as good as being in person, but it works pretty well. We are learning its impact on travel budgets, travel time avoided, continuity stops and starts between travel trips that did not occur.
  • Individual initiative. We have learned who can work independently (making decisions and solving problems) and who struggles without constant oversight.
  • Necessity of being there. When it is not possible (or prudent) to be there, we learn more about the necessity of being there. Human inspection is replaced by remote sensors, providing not periodic data, but constant 24/7 data.
  • Distributed decision making. If it is convenient for managers to make decisions, decisions get made by managers. With a distributed workforce, where it is not convenient (incomplete data, delay) for managers to make decisions, decisions get made by the most appropriate person.

What are the impacts to your business model?

Am I Capable?

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From the Ask Tom mailbag –

Question:
I have been an avid reader of Jaques’ books for quite some time, and I have a question: most of what you say is to help managers and HR workers to find and hire the correct people.

But what about someone who is creating a company (my case)? How can I accurately measure my own capability, and, therefore, structure my company correctly so that its complexity doesn’t surpass my own level of thinking, while also hiring subordinates exactly one stratum below, in the case of the first hire(s)?

I would be very much interested since I’m having a hard time to be objective trying to evaluate myself.

Response:
How does the song go? “Lookin’ for love in all the wrong places.”

First, your interest in assessing your own cognitive capacity will almost always lead you astray. Don’t attempt to assess yourself, assess the work.

Second, a start-up organization has a different focus than other, more mature organizations. There are so many missing pieces and fewer resources to work with. The start-up has a quick timeline to death.

So, my first question is always, what’s the work? As you describe the work, what is the decision making and problem solving necessary? More specifically, what is the level of decision making and level of problem solving required to make a go as a start-up?

Here are some other necessary questions for your start-up.

  • What is the (market) problem you are trying to solve?
  • Does your product or service solve that market problem?
  • Can you price your product or service high enough to allow for a profit?
  • Is your market big enough to provide enough volume for your product or service? Is your market big enough for a business or just big enough for a hobby?

The first focus for every start-up is sales. Can you get your product or service into the market place and please find a customer to buy it?

In the beginning, the level of problem solving is very tactical. Can you make it and will someone buy it? That’s about it. That is why there are so many budding entrepreneurs out there. That is also why so many fail. They cannot get their company to the next level of problem solving.

Once you have a sustained momentum of sales, the next level is all about process. You see, if you can create a sustained momentum of revenue, you will also create competitors. The next level is about process. Can you produce your product or service faster, better, cheaper than your competitor? This is a different level of decision making, a different level of problem solving. It is precisely this level that washes out most start-ups.

So, focus on the work. Do you have the (cognitive) capability to effectively make the decisions and solve the problems that are necessary at the level of work in your organization? Stay out of your own head and focus on the work.

BTW, we have only described the first two levels, there are more.

Structure and Creativity – Part II

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From the Ask Tom mailbag-

This continues my response to the following question –

Question:
In your model, whose job is it to balance structure and innovation? (or structure that permits innovation?) How is this implemented? Is it a time span issue vs. a creativity/mindset issue? I worry about calcification and lean against structure which prevents innovation.

Response:
It is easy to fear organizational calcification. Much of management literature rails against terminology about command and control, even the subtle reporting relationship reeks iron fists and thumbs of oppression. This is why our understanding of functional organizational structure is so important. And important to you because of your interest, mandate that an organization be creative.

I define work narrowly looking at two things, decision making and problem solving. This discussion is to firmly attach creativity to decision making and problem solving, within the confines of a structure that eschews rigidity.

First, an exercise, in creativity. I ask a group of student within a 60-second period to name (write down) things that are round, as many as possible in 60-seconds. That’s the goal. You would assume those that name 30 are more creative than those that name six. I immediately get a question, “do you mean round and flat like a coin or round like a sphere?” I say, “there are no rules, no restrictions, it’s up to your own definition.” There is no structure to the exercise save the limit of time.

Inevitably, the clock winds down and most participants have a list of six to eight and most have a look of frustration on their face that they performed so dismally. I ask for sample responses –

  • ball
  • coin
  • planet
  • wheel
  • manhole cover
  • marble
  • watchface

Stop, time’s up!

Remember, the goal is to be as creative as possible and name as many as possible. I say, “ball. What about a tennis ball? A baseball? A basketball?”

“Wait, that’s cheating,” the group responds. I smile.

Here is the point. Instead of instructions where there is no structure, let me create a structure that guides you to be more creative.

Name as many coins that are round –

  • penny
  • nickel
  • dime
  • quarter
  • 50-cent piece
  • silver dollar
  • gold dubloon

Name as many planets that are round –

  • Mercury
  • Venus
  • Mars
  • Neptune
  • Uranus
  • Jupiter
  • Earth
  • Saturn

Name as many balls that are round –

  • tennis ball
  • baseball
  • basketball
  • bowling ball
  • golf ball
  • volleyball
  • cricket ball
  • soccer ball

The more structure in the assignment, the more creative, the more possibilities. This is a concept called idea fluency.

I need you to shift your understanding (not change, just shift) about organizational structure where we create working relationships between people where they engage in work using the fullest extent of their capability to make decisions and solve problems.

Elliott’s model helps us understand that there are different levels of decision making and different levels of problem solving. It is incumbent on every manager to understand those levels and engage the fullest capability of their team members in the work at hand.

Placing accountability for team output at the feet of the manager dramatically shifts managerial behavior to create more productive and creative working environments.

Humpty Dumpty Sat on a Wall

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All the king’s horses and all the king’s men couldn’t put Humpty together again.

Yesterday, someone asked me, as we move from shelter-in-place to a re-open of the economy, what should a CEO think about? Of course, there is work to be done, and we will bring people back to do that work, but what should the CEO think about?

  • What does my market environment look like in three months time, one year’s time, two years time? This includes market demand, regulations, capital requirements, availability of labor and technology.
  • What should my company look like in three months time, one year’s time, two years time?
  • What are the internal functions necessary to support my product or service in that market demand?
  • Inside each function, what is the level of decision making and problem solving?
  • What roles do I need to make those decisions and solve those problems?
  • Do I have people on my team who can effectively play those roles?

There are two concepts embedded in these questions.
Necessity
Levels of work (levels of decision making, levels of problem solving)

Necessity
If your company considered the purchase of a $100,000 machine, and it was NOT necessary, would you buy it? That same decision has to be made about the roles inside the company. Now, is an opportunity to examine your organizational design and ask, is this necessary?

Levels of Work
Most CEOs do not think about the work necessary to make the product or provide the service. Understanding the level of decision making and the level of problem solving are specific clues to the talent you need. Now, is an opportunity to examine the levels of work and ask, do I have the people on my team who can effectively make those decisions and solve those problems.

It’s Probably Not Important

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“How do you know what-you-need to know?” I asked. “You lost the contract, because you understood the problem, had a great solution, but did not know how the decision was to be made. How do you know what-you-need-to-know?”

Jordan thought for a minute. “I guess, the first step is assuming we already know everything we need-to-know. It’s easy to get suckered into thinking that what-we-know matches the reality of the situation. We have to get really clear on what-we-know and what-we-don’t-know.”

“And, what do we assume about what-we-don’t-know?” I pressed.

“We assume what-we-don’t-know is probably not important, that if it was important, we would already know about it, and included it as part of our understanding. That was our first mistake.”

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Hiring Talent – 2020 was released on Mon, Jan 13, 2020. Limited to 20, participants must be part of the hiring process, as either hiring manager, part of the hiring team, human resources or manager-once-removed. Program details are here – Hiring Talent – 2020. If you would like to register please complete the form on the Hiring Talent link. The first 20 respondents will receive a discount code for a $99 credit toward the program.

What You Need to Know

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“Unbelievable,” Jordan shook his head. “We thought we had it nailed. We knew what the problem was, had a great solution. We were so confident this project was ours for the taking.”

“And?” I asked.

“What we didn’t know was our competitor had a relationship with their corporate attorney, who whispered in the ear of the CFO, who controlled the budget for the project.”

“So, what did you learn?”

“Sometimes, what we know about the problem and the solution to the problem isn’t what we need to know about how the decision will be made.”

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Hiring Talent – 2020 was released on Mon, Jan 13, 2020. Limited to 20, participants must be part of the hiring process, as either hiring manager, part of the hiring team, human resources or manager-once-removed. Program details are here – Hiring Talent – 2020. If you would like to register please complete the form on the Hiring Talent link. The first 20 respondents will receive a discount code for a $99 credit toward the program.

How to Define Decision Making in a Role

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In a role, until we identify the specific decisions to be made and specific problems to be solved, the hiring manager will never hire the right person. This is not magic.

For a technician –
In this key area, what are the decisions that have to be made?
What is the time frame for those decisions?

  • Am I working fast enough to accomplish the output assigned to me today?
  • Does my output meet the quality spec assigned to the work today?
  • Does my attention to quality slow down my output?
  • If I work faster, does quality suffer?

In this key area, what problems have to be solved?
What is the time frame for those solutions?

  • Is this machine noise normal or abnormal?
  • If the machine noise is abnormal, do I need to shut the machine down, now?
  • Can I wait to shut down the machine when it finishes its current cycle?
  • Can I wait to shut down the machine at the end of my shift? And then, call maintenance?

For a project manager –
In this key area, what are the decisions that have to be made?
What is the time frame of those decisions?

  • Is the average output of production this week, sufficient to meet the output target for the month?
  • If output will fall short, what things can I shift in production to speed things up overall? More hands on deck? Overtime?
  • If output will overshoot, are we cutting corners in quality? Did I overestimate resources required? Can I temporarily reassign team members to another area?
  • If output will overshoot, are we using up raw materials in one process that may be needed in another process? What are the lead times on the raw materials? Re-order thresholds?

In this key area, what problems have to be solved?
What is the time frame for those solutions?

  • How often will we sample output for quality problems?
  • In what step of each process do we sample output for quality problems?
  • Should we discover a quality problem, what is our first step to prevent more output that does not meet spec?
  • When we solve a quality problem, how does that change our sample frequency?

It’s all about the work. Every role contains appropriate problem solving and decision making.