(Balancing Tensions at the Top... page 2 of 3)

In Ring One
The Perpetual Goal of Seeding New Initiatives

In order to sustain growth, a CEO realized he needed to nurture a continuous pipeline of business-building initiatives. The company needed to have new growth engines ready when existing ones began to falter. To achieve continual growth, the pace of replenishment had to be faster than the pace of decline.

Unfortunately, his management team believed that their success depended on excellent governance of existing businesses. The CEO knew he had to get his group of top executives to focus their attention more on where they were headed and less on where they were.

In advisory sessions, the CEO realized he needed to do two things:
1) identify those who could manage that ambidextrous challenge, and
2) quickly identify those on his leadership team who couldn’t contribute creatively to the future while at the same time managing the day-to-day. He put those who were ready in roles managing multiple horizons immediately. He put those with potential in roles where they would support the management of multiple horizons and also individually develop ambidexterity as a core competence.

In Ring Two
The Downward Spiral of Foxhole Mentality

Recently we worked with an organization’s CEO, COO, and CFO who wanted help aligning around strategy. They knew that they had talented people who were working hard, but the organization was not making the headway that it should.

During our working sessions with them, they realized that they were in a downward spiral of foxhole mentality. They came to see that they had been spending their time in separate functional foxholes. They were all excellent operational managers, very busy, and very proud of their results. Unfortunately, no one identified early on that their goals were not aligned, and so they were pulling against each other.

This surprisingly common circumstance causes confusion at all levels of the organization. In turn, the confusion creates operational fires that burn up the leadership team’s time and leaves no time to figure out what is causing the confusion. Unfortunately, this is a never-ending spiral.

As a result of working this issue together, the leadership team agreed to slow down to spend time thinking, talking, and aligning around strategy. Ironically, once they slowed down, they were able to operate faster. Their efforts were more productive, more effective, and more efficient. As trust grew, they became less protective of departmental turf and more cooperative with each other.

In Ring Three
To Centralize or Decentralize

Two organizations were having difficulty with the issue of centralization versus decentralization.

One company struggled with its organizational design. The CEO would delegate fully to the business units (decentralize) so that she could concentrate on strategic issues. Then she’d fume when the units didn’t meet their goals. To fix the problem, she would start to micromanage the units (now centralizing) while neglecting strategic challenges that were going to have a substantial impact on the future of the business.

In the other case, the physical placement of offices created the confusion. The organization had a headquarters building with outlying facilities for each of the subdivisions. The CEO, believing that the unit leaders should be with their units, sent them to the separate facilities. But then he decided his top executives couldn’t function as a team spread so far apart, so he co-located them in the headquarters building. Now he is thinking about moving them back out to the units.

In a series of meetings and discussions, both CEO's learned how to stay in a more balanced place – they now lean toward decentralization or centralization as the situation demands, but they don’t go to the extremes that caused confusion and dysfunction. These two CEO's learned to be ambidextrous, to move on a gently waving line in the space between the extremes rather than the giant zigzag that moved from one extreme to the other.

Three Conclusions
As a result of our work on issues of balancing tensions, we reach three important conclusions:

• Executives need to be in the tension area. Either extreme is dangerous for the organization – falling off the tightrope, if you will. As the CEO in Ring One found, you can’t stay with operational management exclusively – that’s a buggy whip mentality. Yet there’s no reason to go all new just for newness’ sake. It’s all right to benefit from history and assume that some things are done the way they are for good reasons.
  
  
• The operating model can be designed and the business system aligned to accommodate ambidexterity. As the executives in Ring Two found, misalignment means disaster. When they were able to achieve alignment, the synergy propelled them ahead. Managing the alignment between strategy, infrastructure, and executive behavior must be an ongoing priority.
  
  
• If the tensions are not managed well, resources will be wasted. Flinging yourself back and forth between extremes is one way to cover both territories, but it is not an effective or efficient way to do it. As the executive in Ring Three found, zigzagging is wasting good corporate and executive energy.
  

And a Fourth Conclusion
After working with many executives on balance and tension issues, we can draw another conclusion: Few managers are innately comfortable with both sides of these tensions. In fact, most top executives have reached upper management by being particularly good at one side or the other. They’ve never walked the tightrope.

For example, top strategists are people who can generate a variety of creative solutions to a given problem.

Conversely, operations experts excel at processing information in a way that finds one right solution.

However, when they reach the C-level, they must be able to hold and manage these two tensions together. If all the C-level individuals don’t have this ambidextrous capability, then the composition and skill mix of the team has to provide it jointly, and the team’s approach to decision-making must be collaborative enough to accommodate both sides of the tension.

<< go to page 1   |   go to page 3  >>