March 1 1989 by Allan Cox
The chief financial officer and director of a large and respected corporation recently told me, “I haven’t had a performance appraisal in over 20 years.”
He went on to clarify that he had been evaluated on his numbers routinely, but as far as his actions and attitudes-his actual behavior on the job-were concerned, he had been left on his own.
I can already hear a few chuckles from some readers: “My God, if this guy’s been moved through the chairs over a 20-year period, and reached the point where he’s been made CFO and elected to the board, how much feedback does he need?”
This CFO and his fellow executives-including the CEO-are embarking upon a rigorous feedback discipline that measures their actions and attitudes on the job. This discipline is one facet of a corporate-wide “re-birth.” It’s working: The numbers are up. The fact that top management is spending time and effort on developing themselves is sending the message throughout the company that what matters are actions and attitudes in support of carefully considered, clearly articulated values.
One of these key values is “team.” The CFO doesn’t know how to lead a team. He suspected this, but nobody ever told him-until his boss, peers and subordinates gave him feedback through questionnaires and other evaluation instruments.
The rigors through which this giant corporation is willing to put itself is an indication we are in the midst of an organizational wave in worldwide business. Moreover, the “team” has become the organizational atom. Pure and simple, corporations that won’t think “team” won’t make it.
We have been beaten by the Japanese because they have made management-byteamwork second nature. Yet team-building is rightfully viewed by many CEOs as ineffective, because it has often been applied as new patchwork to old clothing. True to the biblical parable, because it’s not woven throughout the entire fabric of an organization, it tears loose and doesn’t live up to expectations.
Team-building has been practiced in most cases as a special activity-and carried out by second- and third-level human resources professsionals or consultants. These functionaries are brought in to “do” team-building as a freestanding project. When I suggested it to the management committee of one company, its members said, “We have more in mind than that, we did that three years ago. We’re looking to do something else.”
What these executives didn’t understand is that team-building is unending. They saw it as an activity that is an end in and of itself, rather than a way of managing their entire business. But, by using the right kind of processes and guidelines, the development and implementation of their strategic plan could become a magnificent example of team-management in action.
So as not to lose the power of “team,” we should convert our language from team-building to team-management to adjust our perspective, and then make two demands on team-management. The first is that it does real work. The second is that it be corporate-wide.
THE ORGANIZATIONAL WAVE
My book, Inside Corporate America, is a study of 13 major corporations from the three segments of business: consumer, service, and industrial. The book is based on a 400-item questionnaire completed by 1,086 managers in the 115 headquarters, subsidiaries, and divisions of these corporations.
This group is comprised of 515 top and 571 middle-management executives.
One finding was disturbing. The respondents were asked to note the impact on their career success in their companies of “being a student of organizations.” Two percent of top executives rated the impact as “very positive.” Twenty-six percent rated it as “somewhat positive.” The remainder spread their responses between “neutral,” “somewhat negative,” and “very negative.” This is worthy of our attention.
The earliest emphasis in American business was on manufacturing and lasted for almost a century. Then the emphasis was on sales (for a shorter time); then marketing for yet a shorter time. Next came finance, which lasted about 15 years, ending around 1980.
Now we’ve entered a period that’s global, not merely American, and one in which no solitary discipline or swing of the pendulum will serve us well. Some say, “we’re going back to basics on manufacturing,” and that’s true. But sales and marketing also lay claim on our current rhetoric with the notion of “staying in touch with customers.” And with the emphasis on shareholder value in running our businesses, finance is as important as ever.
We can call this period the organizational wave, and picture it as a subterranean volcano over which business and corporate life teeter. We can’t see it, but we sway with its rumblings while signs of internal eruption are everywhere.
Some of these eruptions are structural. The merger, acquisition and LBO phenomenon is a case in point. This is likely to increase; the stock market may become the greatest futures game of all, since any corporation in the world that draws attention to itself-for reasons good or bad-can have its assets valued and put in play overnight. CEOs must balance the long- and short-term skillfully and acknowledge that the measure of their worth is shareholder value over time.
Some of the eruptions are behavioral. Loyalty is gone; free-agency in professional sports is a good example of talent-for-hire. But it didn’t start in sports: It started in business in the 1940s with the headhunter, and has extended to all organizational spheres, including university faculties and hospital staffs. Lifetime employment of the Japanese corporation is already eroding and likely to be increasingly influenced by our style. In this country, John Akers presides while IBM lays off employees. Nonetheless, the surveys of Daniel Yankelovich and others show that people from the top of the corporate hierarchy to the bottom still need and want to belong. They covet being productive and valued for their contributions. Authoritarianism no longer works. Participation is the rule.
We face countless variables, contradictions, and potential breakthroughs, while only a fourth of our top executives think being a student of organizational life is important. This is a crisis and not enough CEOs have grasped what Allen-Bradley president Tracy O’Rourke has: “The competitive environment, the technological environment, and the social issues inside a company are changing more rapidly than ever, and management is going to have to stay up with that rate of change. That’s causing us all to have to really dedicate ourselves to a productive business life of renewing, reeducating and constantly retraining ourselves. We’ve never had to do that before and it’s going to be hard. You have to apply yourself and take time to do that. All of us convince ourselves that we don’t have the time.”
THE ORGANIZATIONAL ATOM
We must mobilize an all-out effort to teach our executives management-by-teamwork. The team is the organizational atom-the focus of power andif the CEO is going to take the responsibility for sensitizing his organization to its own resourcefulness, then he must start there. What is called a team, most often isn’t. The “management team” of most companies is usually a case of mistaken identity. Meetings aren’t “team” either, though a team can’t exist without meetings. In its June 21, 1988 issue, the Wall Street Journal good-naturedly pointed out the banal quality of most meetings. The article, titled “A Survival Guide to the Office Meeting,” stated that executives spend an average of 17 hours a week in meetings, and another six in preparation for them.
Given the colossal waste of time and corporate resources, we would be smart to convert this waste to an investment in making meetings work. For example, the CEO of a well-known automotive manufacturer hosts a monthly dinner meeting of his direct reports. The meeting is meant to be informal, but he’s made it clear he also expects it to be an occasion when issues and matters of concern to the business are brought up by attendees. These meetings have degenerated into smalltalk socializing. The CEO complains that when he asks for substantive business issues to be raised, he’s met with perfunctory comments, shallow or just plain silence.
Frustrated, he threatened the group at a recent meeting by saying that whoever didn’t have something significant to offer at the meeting, wouldn’t be invited back to the next one. He’d keep shrinking the group, he said, until he ended up with someone he could talk to.
HOW TO HARNESS “TEAM”
If we want to see and feel the power of “team” throughout our organizations, we’re going to have to measure and reward team behavior. This is simple in concept but requires dedication from the CEO. The good news is that such an initiative is intensely gratifying and the best bet for increasing shareholder value over time.
Management-by-team is taking the design-oriented idea of quality in products and using it as a guiding light for ensuring the quality of our total management. Through a comprehensive, corporate-wide design of team-management-and its measurement -a company can build-in total quality performance. Effective team-management has to be designed to meet two demands: First, to do real work, and second, to be corporate-wide. As Larry Perlman, president of Control Data, tells his people: “We are the competition.” Gary Dillon, CEO of the highly successful $1 billion manufacturing business soon to be spun-off by Household International, educates his people with a similar message: “We have found the edge and it is us.”
As a CEO, you are best advised to undergo a team-effectiveness workshop. With the aid of a resource person skilled in team methods, you and your officers will be able to evaluate the merits of infusing team management throughout your company. With such a workshop behind you, you may well conclude you’re a believer and have the determination to see this through. There are eight action steps you can take.
Appoint a task force that will lay the groundwork for the team-management system. “Egad!” you protest. “Not another task force. That will consign the project to oblivion right from the start. Just like a blue ribbon panel in Washington.”
My reply is that it will fail only if you let it. Since “team” is to do real work, think of the meaning of task force. It’s a team with a real task. Complain all you like, but there’s no other way. If you don’t begin the effort with your own people (who know the organization best), then this already taxing challenge is doomed to fail for lack of the ideas you’ll need. From where else, for example, could team-management measurements come that satisfy most participants?
Make the task force interdisciplinary and have it number between five and nine people. “Team” is a small group in this range, and a team-management system will set about improving the performance of groups of this size throughout your company. Pick the executive who reports to you who has the best interpersonal skills and put him or her in charge of the task force. Inspire them with your conviction. Make them accountable for conceiving a distinctive team-management system. Then leave and let them get to work. But stay on the case.
Draft (or revise) a corporate values statement that reflects the spiritual side of your organization. (If these values emerge as contradictory to the mission of your strategic plan, you have even more work to do.) To do this, select a second interdisciplinary task force that you will head. Be sure that one member of the team-management task force also sits on this one. Your corporate values statement might include an item that reads something like this: “The manager’s first job is to nurture the competence and self-esteem of his or her subordinates.”
Develop and articulate behavior benchmarks that support team-management. It’s one thing to have goals as an expression of your corporation’s mission and strategy, but quite another to have “getting there” actions and attitudes that are specified and can be measured. Your company will want to develop its own benchmarks, but you probably can use some guidance on this as well as from a number of organizations such as the Center for Creative Leadership in Greensboro, NC, Development Dimensions in Pittsburgh, PA, Forum Corporation in Boston, MA, University Associates in San Diego, CA, or our firm.
Realize this is a large-scale indoctrination/teaching project, and your entire corporation is the classroom. What is being taught are small-group leadership techniques. The message sent to each manager by his boss is: “You are a team member in this group, but on the next level down you are a team leader. What you are learning here you must teach and apply there.”
Keep the two demands of effective team-management before you at all times. First focus teaching techniques on real issues. Second, make team-management corporate-wide.
Reward your achievers The achiever’s profile is comprised of commitment to team, risk, balance and results. No values statement or team-management exhortations will be subscribed to or implemented with any verve, unless your people are measured against specific behavior bench marks and rewarded both financially and emotionally for making them part of their job objectives and delivering results.
The required actions and attitudes in support of the achiever’s profile need to be made a central feature of your incentive pay and performance-appraisal procedures.
Make sure your chief human resources officer is enthusiastic about what he’s supposed to accomplish. Lack of vitality in organizational thinking is underscored by the fact that many corporations have placed weak people in charge of human resources. Fortunately, this is changing. Your human resources officer will nonetheless be an essential player in its outcome.
When embarking upon the establishment of corporate-wide team management, you’re likely to have mixed emotions. Bound up with your anticipation of raising corporate performance a few notches, you may also encounter fears of misdirected effort, poor execution, and outright failure.
But the difference between winners and losers on the corporate playing field is the difference between managing through “team” vs. doing it poorly or not at all. This demands perseverance, because while the initial stages of team management-well executed-yield immediate benefits, the real payoff is over a decade away. Remember the Chinese proverb: “A journey of a thousand miles begins with one step.” Practice balancing the long- and short-term in the service of shareholder value, and you’ll be a visionary who keeps his eye on today.
Allan Cox heads the Chicago-based consulting firm that bears his name. Founded in 1969, this firm specializes in top-management team effectiveness and executive development. Cox is author of five books, including the recently published, The Achiever’s Profile. He serves as board chairman of The Center for Ethics and Corporate Policy in Chicago.