1999
WHEN WISDOM Ignores the HIERARCHY A winning strategy for the 21st century Published in the May 2000 edition of HUMAN RESOURCES The Official Magazine of the Hong Kong Institute of Human Resource Management
C H R I S L O N S D A L E & A S S O C I AT E S LT D . Copyright 1999, Marc Mostacci and Chris Lonsdale
WHEN WISDOM Ignores the HIERARCHY Authors: Marc Mostacci AND Chris Lonsdale
“W isdom is knowing what to do next,” said President Roosevelt. We never really like tautologies, but in this case we want and talents together to reach higher operational effectiveness. A simple statement, at the start, that leads to more questions than it probably to take Roosevelt at face value. We want to answers. assume that wisdom really is knowing what to do next, in such a way that what is done Nurturing organizational wisdom next actually leads to consequences that are desirable both for the person doing the Sure enough, the reality is that almost every knowing and the greater context within which organization struggles to establish the he or she operates. History tells us that without mechanisms that will lead to a state where wisdom people are ultimately always going to employees have the true power to apply fail. With wisdom, however, success is just a wisdom. Reflecting on 20 years of matter of time. management experience, this article disputes the wisdom of the hierarchy and suggests The ‘know-body’ non-conventional ways to start nurturing the distribution of wisdom. When it comes to organizations, the conventional view is that if we put wise people Why should we? into positions of power, then, as a matter of course, the organization as a whole will behave Why should we disseminate the power of wisely. True, senior leadership is very skilled wisdom throughout the organization? For one in formulating a strategy in a relatively short thing, such an organization would be more period of time. But when it comes to profitable. And there are other things. Just implementation, there is often ‘no-body’, and imagine an organization where employees the action slows down to a snail’s pace. Surely proudly say to their friends: “At work, I can something must be missing. speak up and I am not seen as someone with a bad attitude. I can talk about things that are The missing link not going right, instead of having to shut up and live with them.” What’s missing is at once simple and elusive. It is organizational wisdom. It is about linking Wouldn’t it be nice to be part of an organization individual wisdom throughout the enterprise. that succeeded in breaking away from a culture It is about people using individual experiences of fragmentation, compromise, defensiveness
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and fear? A group where members live with Gone are the days when learning stopped integrity, commitment and collective the very moment we graduated. Learning is intelligence? If this is the sort of organization a transformation that takes place over time. that we all want to be a part of, how do we It is, as we all know, a lifelong project. But, create such an organization? The first step how many management books did we read, is to rethink wisdom – what it is, or is not, and rather studied, since we got our bachelor or how to attain it. master degree? I opened a management book four years after my promotion to Rethinking wisdom manager. I did it because my boss told me to do so. Worst, he asked me to report to Are we born with it or do we acquire it? And, him not only what I had learnt from the book, if we acquire it, how? Should we team up but also what it meant to me! He did not send with Oscar Wilde and claim: “experience is me to training. A wise man, indeed. the name we give to our failures”? When training is not wisdom When experience is not wisdom Seminars are usually a waste of time and How many of us can secure a job by repeating money. Cost center managers know this, for 20 years the experience we gained in the which is why the training budget is the number first few years after graduation? Unless there one candidate in any cost-cutting exercise. is a continuous process of reflection of the One does not learn tennis by reading a book, meaning of one’s experience, and a rethinking listening to Agassi or watching Sabatini. This of what one knows, years of experience do sort of observation builds awareness only. not equate to wisdom. When there is no opportunity to practise, training is just an expensive reward for We recall a classified ad in the South China privileged employees. However, when the Morning Post. A bank was looking for a opportunity is given to practise again and director of re-engineering. To qualify, applicants again, and mistakes are allowed, then training had to have at least ten years’ experience in is an investment in wisdom. retail banking. It puzzled us. Had there been any major service breakthrough in the Hong When making mistakes is wisdom Kong retail-banking sector during the last ten years? How many years of experience does If wisdom (good judgment) comes from one need to comprehend that double-data experience, and experience comes from bad entry by tellers creates long queues of judgment, then the truism that ‘the one who frustrated customers? When experience is never failed has never been tested’ is more the memory of the past, experience is of no relevant than ever. Some of us have been value to the organization. looking at measuring the effectiveness of training without much success. Wouldn’t it When education is not wisdom be smart to count how many times people fail instead? This would be a neat way to
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assess employees’ wisdom, wouldn’t it? people I have ever had in one room: they were administrative specialists in their mid- In 1981, I hired a database designer. I knew to late 20s, who had a full knowledge of the nothing about databases then, and still don’t issues and 15 different viewpoints from which now. My selection criteria? Must have to look at them! At that time, I didn’t know designed four databases and screwed up that open controversy, when a clear purpose the first three! During the interviews, I focused exists, creates wisdom. on the screw-ups and what the applicants had learnt from them. Guess who I hired? The arrogance of being right The database application was ready for field- testing six months later. Our own IT What stops most people from becoming department was asking for two wiser is the belief that rank, age, years! Yes, I was given the experience and education power to bypass the are sine qua non for established procedures of wisdom. the organization. That was wisdom. “The concept is interesting and well When controversy formed, but in order is wisdom to earn better than a ‘C’, the idea must No man is an island. We be feasible,” wrote a build our knowledge from Ya l e U n i v e r s i t y others. We grow because professor in response we share knowledge, because to Fred Smith’s paper we know how to give and receive proposing reliable overnight feedback, and because we can build delivery service. Of course, Smith on one another’s perceptions and visions of took this “interesting and well-formed” the world. concept and went on to set up Federal Express. It is very unfortunate that too many To come back to my database application of the people who got ‘A’s reign high in the example, the IT department claimed that it MBA food chain – sorry, chain of command. would take at least six months to create the This chain of command is sometimes the data dictionary. We did it in three days, and chain of mediocrity. it remained valid for ten years! Did I have the wisdom to know what would be needed in We are all familiar with the question, are the future? No, I did not. But with the 15 managers born or made? Well, there is a other egos we did pretty well. follow-up question to it: If they are made, can we return them under warranty? If we could, Coming from ten different countries, they many MBA schools would go bust! Could were the most argumentative, undisciplined they, would they, be accountable for those
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companies, once very successful in the 20th subcontracted within the next two years. century, that failed to see the dawn of the Future core competencies and learning paths 21st century? were explained. Employees knew they had to adjust and develop new capabilities should Rethinking the hierarchy they wish to stay and grow. This is what we call loyalty – loyalty to employees. Today, people in business have the wisdom to recognize that we can no longer rely on It is unfortunate that, too often than not, the the experience of the hierarchy to respond hierarchy lacks the integrity to tell people swiftly to the ever-increasing variety of and what it will take to keep a job. Is it a lack of shifts in market requirements and customer integrity? Maybe not. Personally, we bet it needs. We look for employees who can be is a lack of wisdom and a lack of courage. team players, who can think about the customer, take the initiative, and be flexible The chain of control and creative. In other words, we hire brilliant people. In many ways, the barrier to wisdom growing in an organization is the organization itself. And then the chain of command treats them Typically, there are two functions that possess like turkeys. the inner belief that their mission is about controlling what the organization has become. All too often, the reality of a job calls for two They devise policies and spend their time things: learning the rules, and learning how enforcing them. Does anybody get the favor to do the job faster. The boss decides what of the boss by asking why this, why that? needs to be done and how it must be done. We usually don’t. So we keep doing work The problem is, of course, that eagles don’t that has lost its original purpose. like to be managed like turkeys. One day they will fly away, and they will fly away with For example, when the accounting their wisdom. Turkeys, on the other hand, department has proof of delivery matching cannot fly, so they work hard and try their a signed purchase order, who needs an best to stay on forever. invoice from the supplier? One day when you want some fun and are bold enough, The chain of loyalty just ask the question and challenge the answers. We never found an answer that As people, we are eager to change because made any real sense. If you ever do, we’d we need to respond to new conditions. We love to hear about it. are motivated either by a personal desire to succeed, or by understanding (and fearing) How about collecting all the policies and the consequences of not changing. procedures of the company, then piling up the paper and measuring the height? At the Not too long ago, we had a client who told very least, we estimate this pile would stand his employees that all trivial tasks would be around six-feet high. Double that number if
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WHEN WISDOM Ignores the HIERARCHY you are ISO 9000-certified. To reduce the thus turning people into servants of height, we suggest enforcing one new policy (benevolent?) masters. And these roots grew only: for every new policy introduced, three for centuries. A Confucius-minded person old ones must be removed. People will soon does not expect people to take the initiative feel the winds of freedom – freedom to think without prior permission from the father. and freedom to talk. Initiative means change, and change rocks the boat. For too many people, it is better to The chain of empowerment stay put and enjoy a smooth sailing for another millennium. A sure way for future generations But we do empower people! At least we act to be left to admire the Pyramids or the Great as if we do. But is it really empowerment? Wall. We expect people to understand what was done before and after their own work, and Change, hierarchy and wisdom to find ways to do it not only faster but better. When problems arise, employees are Some 20 years ago, the conventional wisdom empowered to gather facts, define the ‘real’ was ‘if it works, don’t change it’. In those problem, and submit solutions to functional days, change was approved when it was a managers, who, in turn, decide which one is well-articulated answer to a well-defined acceptable by all parties involved in the problem. About ten years ago, thanks to the system. It is pretty much the same as in Japanese, the rest of the world woke up, and schools: well-behaved students are expected the wisdom became ‘we don’t have to be to acquire and store facts and present them sick to become better’. Change was, and still in well-accepted rational frames aligned to is, a way for continuous improvement of the the wisdom of the day. current state, as approved by management.
The chain of servants Today, however, markets are far more complex and existing models hardly explain the world When job postings ask for people to be of business. Finding the right answer is no masters of their own work and be accountable longer the challenge; finding the next question for results, why do we need managers? We is. It is a prerequisite to ‘knowing what to do need them to add value! To add value by next’. being ‘servants’ to subordinates, not to their own bosses. When it comes to building the future, we are In 1986, I got a new boss. At the very as good as any expert. Experts are not wiser beginning of our first meeting he asked me than us. And so it is for the hierarchy and all a simple question: “What do you want from who dwell within. None is without shame or me?” It took me some years to digest how blindness. In 1977, Ken Olson, president of smart this question was. Digital Equipment Corporation, foretold the future of PCs: “There is no reason why anyone Confucius never did, though. He planted the would want a computer in their home.” It is roots of discipline, obedience and conformity, to be remembered that he was the one behind
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WHEN WISDOM Ignores the HIERARCHY the invention of interactive computing (screen egos, younger and wiser than the boss in and keyboard) in the late 1950s. At that time, producing results. the world was happy with card punching and batch processing. He was wise not to be, In the mid-1980s, we had a serious quality wasn’t he? issue with our frontline technical support staff. At an operations meeting, I committed to fix If it works, it must be out of date the problem if countries would lend me ten of their best specialists for two weeks. They We would like to see an organization where asked me how did I plan to do this. I confessed people are wise enough to recognize that by that I had not made up my mind yet. That the time they finally make it work, the reasons was shocking, not letting decision-makers that originally triggered the change are gone. assess the solution beforehand! And honestly In our view, a mindset of systemic change is I didn’t have one. the only strategy for survival in a world where the pace of change is rocketing. In a systemic change environment, the hierarchy frees people to invent new intuitive And because the time to make decisions has models on the spot and decide in real-time, become a scarce resource, responsibility to without the need to ask for permission. The make operational decisions should bypass trial-and-error process is seeded everywhere, the traditional chain of command and shift to so that there is no fear of being wrong or the most competent individuals. They must making mistakes. And it is safe to ask for the be allowed to link up when they wish, rationale behind a decision. ‘Why’ is not a assemble as a ‘virtual team’, and disband dirty word. once the situation has been responded to. For senior leadership, the difficulty is no longer After the success of the ten-specialists-two- finding the solution but finding the ‘solvers’, weeks experiment, I received the funding to i.e., the change masters. establish an organization dedicated to the engineering of service. I selected people for From Master of Administration their expertise and their attitude against the status quo. (Incidentally, always look for people to Master of Change with an attitude – their bosses will be more than happy to hand them over to you!) I kept We have one wish: that MBA program them ‘disorganized’ (i.e., no control) for about directors will soon add project management a year. But they knew their marching orders: and consulting skills to the MBA curriculum. deliver the promise, no excuse for failure, do Consulting skills, the art of influencing others what it takes. with integrity when you don’t have control over their decisions, will prepare future From their experiences and mistakes we managers for how to handle cross-functional formalized the process of service engineering. project groups and groups staffed with For three years the group delivered all of its knowledge workers – these being talented projects on time, on budget, and to the
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WHEN WISDOM Ignores the HIERARCHY satisfaction of customers. My contribution to we do appreciate their ability to cascade clear the group’s success was to secure the and simple messages down to the trenches. resources they needed and to protect them When one is confused, one doesn’t take the from internal politics. (‘Protection management’ initiative, as it is safer to wait for the boss to – a new topic for MBA students perhaps?) decide. Long working hours, boring and Eventually, after three years, the team turned lengthy meetings, and frustration are the my vision of service quality into a “worldwide consequences. Think about the benefits if reality” (Pier-Carlo Falotti, then CEO of Digital you invest time with your subordinates to Equipment Corporation, Europe). develop something crystal clear that everyone can understand and carry in their heads. You may say, “Nice story, but you were lucky The critical start is the mission statement (or – you had the right people and the right boss.” purpose, or goal, or strategic intent). It is the Certainly. But there was more to it. Wisely, or reason for existing, the reason for action. It by chance, one can start on the right foot. In is the big ‘Why?’ Consciously or unconsciously, retrospect, we do believe there are three it influences people in the definition of their fundamental moves prior to distributing objectives, and in their decisions of what is wisdom within your organization. right or wrong for the organization as well as for them. The three moves 2. Make sure your mission and objectives 1. Establish clarity of purpose and unity are bought in of action Imagine for a moment that you are in charge Start by asking yourself a few questions. Can of an army-training center. As the commanding I articulate the mission, objectives and strategy officer, you define the mission as “Combat of my group, without having to turn around Readiness”. Sounds good to you and your and pick up a binder from the shelf? Can I, subordinates. So, all of you work really hard in less than two minutes, explain the purpose and do the best you can. But one day, much of my group and its contributions to the to your surprise, army headquarters tells you company’s success, as judged by senior that getting soldiers ready to fight is not what leadership? If you cannot, neither can your they ever wanted, and so they remove you staff, so you ‘know what to do next’. from your command and downsize your company. Nobody wants this to happen at It is not a trivial task, for achieving clarity and work! simplicity is hard work. In our opinion, it should be the sole responsibility of managers. It is The second move, therefore, is to ensure that their tangible contribution to organizational the mission of your group is periodically wisdom. Clarity and simplicity remove reviewed, and that your operating objectives confusion. (the results of action) are aligned to the corporate strategy (the directions for action) We are not fanatics of the armed forces, but and sold to the hierarchy. (The mission and
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WHEN WISDOM Ignores the HIERARCHY the objective of an army-training center are to ensure that when soldiers fight, they win. Being ready is surely not enough for a general. We bet that soldiers – the ultimate customers – would feel the same!)
3. Do not interfere with the ‘how’
Once your subordinates’ objectives are aligned to your approved mission and objectives and there are enough eagles around, unity of action comes naturally. They know what to do next. Of course they know how to plan, organize, execute and measure what they are responsible for, because you were wise enough to select them in the first place. So, logically, your third move is to give them full authority for the ‘how’, as long as they deliver their promises.
In 1986, my answer to my boss’ question “What do you want from me?” was: “Once we agree on what has to be achieved and we both understand why, the ‘how’ is mine!” We both abided by this principle when working together.
Once these three moves have been completed, you will sleep better at night, for you will not have to make all the right decisions anymore!
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Originally published 2004-11-05 · Legacy CMS article #6815