The Structure of Leadership

For all of our beliefs in the charismatic or heroic individual, leadership is eventually articulated through a variety of forums and mechanisms. A well-led company would design those leadership systems in a way that makes successful problem solving a high probability event. If a leadership team were to adopt Naming and Framing as their essential responsibility, this page outlines some of the structural implications of that choice.

The strategic plan of an organization may exist as a formal document or only as a set of oft repeated verbal understandings, but a company either has a strategic plan, or it suffers. And even if it has one, it will still suffer from any flaws, gaps, or weak spots in the plan.

Viewed through the lens of effective problem solving, the strategic plan provides a powerful and economical way to exercise leadership and to queue up effective problem solving throughout the organization.

First and foremost, the strategic plan should act as a filter, identifying those problems that are worth attention and those that are not. Any candidate should be tested with the simple challenge: If we do not resolve this problem, what part of our strategic plan will be put at risk? A problem may warrant attention on other grounds, but this should be the first test.

Second, the plan should acknowledge the critical strategic dilemmas that will shape the company. While there are always numerous tactical dilemmas, most companies have a few dilemmas that define the essential tension that must be addressed or the company will wither. Those dilemmas deserve to be highlighted at a strategic level. Any program or project within the company should be accountable for how it contributes to managing that tension (rather than just emphasizing one side of it).

If there is one lever with more executive fingerprints on it than any other, it is the organizational chart. No document in a corporation seems to produce such angst and anticipation as the boxes and lines that define who talks to who, who has authority over who, and who is "in" vs. "out" of anyone's work world.

In the language of problem solving, we would point to the org chart as a solution and ask "For what problem was this the correct response?". Two problem types standout in response to that query: Problems that are Dilemmas and Problems with a Life of Their Own.

The boundaries between functions are one of the most common ways that key organizational dilemmas are mis-managed. The executives who get to draw the lines should be careful that the two sides of key strategic dilemmas are never parceled out to separate functions.

For example if the tension between "product innovation" and "time-to-market" is the fundamental strategic dilemma, then Engineering and Manufacturing should not be cleanly split. There has to be some forum (such as a Product Development Review Committee) where that tension can be focused.

The organizational chart is always juxtaposed to the informal, unconscious, often invisible network of influence, communication, and association. In fact, if you ask people to draw the "real org chart" branching out from their position, about 20-30% will not even include their formal supervisor among those who influence their work.

Many leaders fail to appreciate the tremendous power of the informal networks that tie the organization together. During a downsizing, the real damage is not the loss of individual talent, but the gaps created in the informal network on which people relied to get their work done.

Today we have the conceptual and technical capability to capture these networks and make them visible. Any attempt to make them managed will ultimately fail, but making them visible at last puts the formal structure in context and tempers any attempts to mistake the org chart for the guts of the company.

There are some dilemmas that are most pungent in the executive ranks. Much of the conflict that occurs at the senior level comes from not recognizing these dilemmas and not making their management a central focus of leadership:

Function representation /\ Team membership

The members of the senior team play two roles; one to speak on behalf of their function, and the other to participate in a decision-making group responsible for the health of the enterprise, not just its parts. Any senior group needs a way to signal when it is time to shift from "functional spokesperson" to "senior team member", as well as some way to enforce that distinction.

Long-term /\ Short-term

There is no place in the organization where the tension between strategic concerns and tactical ones is sharpest than at the top. Attention to the pressing problems of the moment always conflicts with the need to think ahead to the challenges of tomorrow. There is no easy way to manage this tension, but it is always better to manage it explicitly rather than surreptitiously.

Formal structures /\ Informal systems

Executives have a responsibility to structure the organization in a way that reflects its purpose and capability. If they only look at formal mechanisms, they are ignoring half of the tools available. A "roles clarification" exercise may improve relations between conflicted groups, but a "Wednesday Breakfast meeting" may allow for something more organic to emerge. The informal structures can be facilitated but never driven; the advantage is that they tend to be more resilient and refined than anything structured and defined.

The strategic objectives and the culture of the company are often re-written by the reward system. Employees are smart enough to know that the budget is the real strategic plan. Departmental objectives may be articulated and reinforced, but employees are more attentive to what is in their performance plan.

The lesson here is simple: if strategic objectives are not translated into every reward system, they will evaporate.

Executives are in a unique position to enrich the rewards by linking bonuses to shared objectives rather than just individual objectives. Sales people should have part of their compensation linked to full delivery. Engineering should have part of their compensation linked to ease of manufacture. The Loan Officer should have part of their compensation linked to the quality of the overall portfolio. Legal should have part of their compensation determined by speed of delivery of contracts.

The widespread obsession with rewarding people only for what they can completely control flies in the face of the obvious interdependence of any corporate endeavor. Until people are rewarded for the success of their co-workers, they will never learn to collaborate. Until departments have a shared fate, they will avoid shared planning and problem solving.

Some people have suggested that "senior team" is an oxymoron. At the uppermost levels of the organization, "teams" are often merely groups of highly competitive and individually motivated players. Whatever the nature of the senior team, its behavior limits the quality of problem solving beneath. And there are straightforward practices that can dramatically increase the quality of those efforts. One suggested format for senior team meetings is to build the agenda around the following questions:

1. Just so we don't forget, what are the major problems we commissioned in the past?
2. What evidence do we have of appropriate progress on those issues? Do any require additional attention or investigation on our part?
3. Do we have any reason to revise the charter for any of them? Are we still confident that we have identified the best problem type to frame the effort?
4. Are we (or the executive sponsor among us) behaving in our best role to leverage the time and talent of the staff?
5. Are there any new issues that we should consider? (These often surface as staff presentations asking for executive focus on some problem.) Why has this problem risen to this level? Why wasn't it solvable at a lower level?
6. Does it qualify as an important problem?
7. Are we looking at the complete problem? Or just the version people assumed we would be comfortable with?