MBA, Richard DeVos Graduate School of Management, Northwood University
MANAGEMENT BY DRIVING A STAKE IN THE GROUND
Dramatically planting a stake to mark your high expectations serves not only as a “stick” to prod people toward superior performance but also as a “carrot” to inspire them to achieve great things.
When I joined Old Mutual last year, after many years in the automotive and information technology industries, I found out that the financial services industry is quite set in its ways. But when I started looking at what the challenges were, they were very similar in principle to what we were trying to sort out at General Motors years ago.
Good management practices are the same in all industries. One that has worked for me on many occasions is what I call “management by driving a stake in the ground”. The stake can be an audacious goal, an inspiring vision or an overarching principle – getting everybody to work together in a very focused and determined way.
Setting an Audacious Goal
One way to drive a stake in the ground is to declare a highly ambitious completion date for a project. By doing that you shift people’s mind-set, requiring them to tell you what it will take to deliver their work on time rather than why they cannot do it.
When I took over as CIO at one of the companies I worked for previously, I found out that they were five years late and a hundred million pounds over budget with their European-wide SAP implementation. I arrived in May and had until the following March to complete the project. My team and I turned the project around and delivered it the following January, sticking to our budget commitment.
People in that business were used to worrying about risk, looking at all the things that could go wrong and then coming up with reasons for why the date for completion should be moved. We needed to turn around the culture. To make that happen, I created a significant emotional event by announcing, in a very visible way, a go-live date.
I realized that there was only one opportunity to go live – between Christmas and New Year’s. That was the only way we were going to have enough time to do all the data migration and everything else we needed to do. So I announced a 100-day challenge and told the business that we were going to go-live on the second day of January.
I had an awful lot of people come to me and say, “Hey Richard, this is a really good idea and I can see why you want to do it, but unfortunately, I won’t be able to have my area ready in time.” My response was, “Great. At the moment, I’m going to the board meeting every month and I’ve got an hour on the agenda. Would you like to have the last 10 minutes to explain to the board why IT is going to be ready but you won’t be?” I insisted that if we actually focus on what it will take to go live on that day, we will find innovative ways to get there.
And we did. We found bits of functionality that helped us stagger the implementation. We found new ways of bringing people up to speed. We changed the order in which we went live in each country, making it easier for us to enter data into the system. Teams innovate and improvise when everybody is focused on how we can deliver on a specific date, instead of thinking about all the reasons why we cannot.
The other thing I did was to change the communication process. We ended up having a telephone conference with people on the business side twice a week. Now, the project team could bring issues to the business that required a decision to be made. It also allowed the business to clarify what was going on and what the pressing issues and concerns were.
Before we began this twice-weekly call, there would be a meeting in which it was decided which group of people would get together in three weeks’ time to decide how we were going to make a decision around some piece of functionality that may or may not be required in the system. This meant that the program was sitting on its hands, waiting for business decisions and the business was sitting on its hands waiting to work out which way the system was going to go.
With the new communications process, if somebody had an issue, question or concern, within 48 hours at most, it would go to the senior executive team from both the business and IT and we would make a decision. This massively sped up the decision-making and approval process and took the brakes off the whole program, enabling us to deliver it on time – early, actually – and on budget.
Motivating with an Inspiring Vision
A stake in the ground can also be an inspiring and uplifting vision. In my current job, a board decision was made, just before I arrived, to merge four different IT organizations which had always been federated. As a result, from my first day on the job, the four IT organizations of the Long-Term Savings division have reported to me in a role that did not exist before.
The idea behind the initiative was to take a significant amount of cost out of the IT organization. About four weeks in my new job, I went to the board and said, “I understand that you want me to take cost out, but a cost reduction program is not going to help the organization in the long-term.” My view was that it is a bit like going on a diet. I can certainly cut lots of cost, but as soon as I stop, we are going to put weight back on. In addition, just cutting cost for the sake of cutting cost was going to hurt our capability to drive change and add value to the business, ending up with an infrastructure that was not fit for the future.
I told the board that I wanted to create a world-class IT organization. Being world-class, it will be by definition an efficient organization. At the same time, it also means that I can drive a stake in the ground with an inspiring vision and get my team motivated to help me build something new, rather than come to work and worry about whether they are going to lose their job or help somebody else lose their job. It was an important switch in focus and the board bought into that very quickly and has been extremely supportive in the process.
The vision calls for a world-class IT infrastructure that provides the business with maximum flexibility regarding its go-to-market strategy. This vision guided me and my leadership team in developing a common set of values and a set of operating principles which in turn guide everything we do. Once we knew where we wanted to go, we decided on the few key things that we needed to do quickly. For example, we have invested in networking all parts of the business together to replace the five separate wide-area networks that were not designed to talk to each other.
Mutually-beneficial Relationships with Partners
Our vision for a world-class IT organization extends to and includes our key partners. Here too, driving a stake in the ground is a great way to manage the team. The over-arching principle regarding our partners is that we will create mutually-beneficial relationships by working together to develop an IT infrastructure that will enable efficiency and innovation, local and global competitive advantage, through a world-class IT partnership. I intentionally included polar opposites in this statement because I wanted people to step back and think about how we can solve some of our challenges in a new and different way. Today, we are a long way down the road toward designing a hybrid IT infrastructure that will allow us to harness these opposing forces – have innovation at the front-end and be super-efficient at the back-end, be able to focus on what the local needs are and at the same time take advantage of what we can deliver globally.
My approach is to see partners as an extension of the IT organization. I have asked my three key partners to work together and agree to joint commitments. I share my business plans and IT strategy with them. Together we work on finding solutions to our business challenges. I have the option of creating an RFP or RFQ and wait to get back a proposal that represents what they think I want in a way that fits the way they want to do business. But I would rather have them sit around the table and develop a solution together. I know roughly what the business problem is that I am trying to resolve. What I need is my partners’ expertise and their IP on the table, telling me what is the best way to deliver a solution.
By driving a stake in the ground you raise the stakes – and the rewards – for everybody involved.
“You can get a team to work together in a focused and determined way, by setting an audacious goal that stretches them beyond their expectations, by motivating them with an inspiring vision that pulls them toward great performance or by establishing an overarching principle that guides them in all their actions.”
How to ensure that a stake stays in the ground: “People would come to me and say, ‘Hey Richard, this is a really good idea and I can see why you want to do it, but unfortunately, I won’t be able to have my area ready in time.’ My response was, ‘Great. I have an hour on the board’s agenda every month. Would you like to have the last 10 minutes to explain to the board why IT is going to be ready but you won’t be?’
“I can certainly cut lots of cost, but as soon as I stop, we are going to put weight back on. In addition, just cutting cost for the sake of cutting cost was going to hurt our capability to drive change and add value to the business, ending up with an infrastructure that was not fit for the future.”
“There would be a meeting in which it was decided which group of people would get together in three weeks’ time to decide how we were going to make a decision around some piece of functionality that may or may not be required in the system. This meant that the program was sitting on its hands, waiting.”
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