Silo-bound managers blind to synergies

By Ben Venter business partner at The CONFIDANT Group

LEADERSHIP blind spots occur when a shortcoming becomes so common that it is accepted as the norm and is tolerated by normally astute executives.

Three years ago, a public company announced a bold expansion strategy that, initially applauded, became a costly failure. The reason? People. The strategy had been formulated without knowing whether the capacity to execute it was in place.

The cost of failure was high — shareholders lost 62% of their investment. The cost of lost opportunities while trying to extricate themselves from the venture is not known. The crisis continues to this day.

Another example of a blind spot was reported in a PwC leadership survey showing that the majority of respondents saw no correlation between the contribution of their managers and workforce productivity.

It is difficult to accept that those surveyed seemed content to have an expensive, but underperforming asset, the managers, on their books. Equally difficult to understand is the fact that executives, who themselves are managers, appear to accept that the manager is not expected to raise productivity levels.

These blind spots are not unrelated. Both must contribute hugely to the fact that between 70% and 90% of well-formulated strategies are not executed.

Fortunately, rectifying these organisational shortcomings does not mean another round of traumatic re-engineering type solutions of the past. There are “do-able” solutions using existing resources, solutions that focus rather than distract managers.

To tackle the problem of formulating strategy without knowing whether the capacity to deliver exists, we need to challenge conventional wisdom, which dictates that we separate the three core business processes: the strategic, the operations and the people processes.

Conventional wisdom has taught us to seal each process in a silo to avoid contamination and distraction. The “people” process is not able, nor expected, to advise the “operations” process that the capacity to drive and support a strategy is not available.

The inherent weakness then remains undetected for another business cycle or more. It does not make sense to treat strategy, operations and people as three unrelated processes.

Silo management drains an organisation of potential synergies.

The new mind-set must also discard the conventional wisdom that dictates that there are managers who formulate strategy for others to execute. It is bad practice to afford those who formulate strategy protection against failure to deliver.

The second blind spot is obviously a factor in the failure to deliver. The manager’s role has been downscaled for many years and the PwC findings should not come as a surprise.

The process began probably because the manager was ill-equipped for the role in the first instance. Hence the emergence of the staff specialist to take over recruitment, induction, morale management, performance appraisal and reward practices.

Whatever the benefits of this solution, the manager has become an underperforming asset. The consequences are a reduced ability to deliver the plan; a constant exodus of talent; and the loss of sustainable growth.

It is imperative for the leadership to clearly define the role of the manager. Peter Drucker’s definition of 50 years ago is as relevant today as it was then: the ability to convert the effort of others into performance.

This requires the manager to understand how specific roles contribute to the success of the enterprise, and the unique talents of individuals.

The manager must be capable of synthesising individual information, establish the capacity of the delivery unit and plan to better leverage the high performers, to develop those who have yet to realise their potential, and reduce the “performance drag” factor caused by poor past placement decisions.

Integrating the three core processes means that managers be assessed and rewarded for the retention and development of talent; achieving the level of operational effectiveness required by the plan; and building the unit’s capacity to drive ambitious strategy in subsequent years.

Skilled managers are well positioned to bring the strategic, operational and people processes together. A culture of performance management and talent development is a prerequisite.

This article was published in the Business Day on 26 August 2015:

http://www.bdlive.co.za/opinion/2015/08/26/silo-bound-managers-blind-to-synergies

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