In Search of Excellence November 2005

In Search of Excellence

A bias for action

Peter Jansen
November 2005

In our search for excellent Romanian companies another important key success factor found by Peters and Waterman is a bias for action, for getting things done. In many of the excellent companies the standard operating procedure is “Do it, fix it, try it”. It is very difficult to be specific about something as intangible as an action bias, but it is very important to try, as this excellent company characteristic seems to underpin all others.

The issue addressed in this article is the all-too-reasonable and logical response to complexity in big companies: coordinate things, study them, form committees, ask for more data (or more IT systems). Indeed, when the world is complex, as it is in big companies, a complex system often does seem in order. But the process is usually greatly overdone. Complexity causes the lethargy and inertia that make too many companies unresponsive.

The important lesson from excellent companies is that it doesn’t have to be that way. Even though excellent companies may be analytical in their approach, they are not paralysed by the fact. What is striking is the host of practical devices excellent companies employ to counter the inertia that comes almost inevitably with size. Their mechanism comprises a wide range of action devices, especially in the area of management systems, organisational fluidity and experiments.

The name of the successful game is rich, informal communication. The nature and use of communication in the excellent company is remarkably different from those of non excellent peers. Excellent companies are a vast network of informal, open communications. It usually starts with an insistence on informality. Then come the open door policies. Getting management out of the office is another contributor to informal exchanges. You can’t wander around in excellent companies without seeing lots of people sitting together in rooms with flipovers, working casually on problems. And any of these ad hoc meetings is likely to include people from R&D, manufacturing, engineering, marketing, and sales. That’s in sharp contrast with most large companies, where the managers and analysts never meet or talk to customers or salesmen, and never look at or touch the product.

People here enjoy informal communication. Walking around your company you can see many informal gatherings of employees, usually accompanied by the inevitable cigarette and/or cup of coffee. Does this mean they automatically have a bias for action? There is an important underlying principle here and that is the refreshing willingness of excellent companies to shift resources and break things up to facilitate organisational fluidity and to encourage action. The action-oriented devices come under many names – champions, teams, task forces, project centres, quality circles – but they have one thing in common. They never show up in the formal organisational chart and seldom in the corporate phone directory. They are nevertheless the most visible part of the “adhocracy” that keeps companies fluid. The small group (task force or team) is the building block of this adhocracy and, quite simply, of effective organisational functioning. As I have argued before, autonomy and decentralisation do not fit into the Romanian management culture. Therefore, it is unlikely that organisational fluidity does.

In a recent international comparative study among middle managers, their Romanian counterparts scored under par as far as delegation, commitment to the company and professional ethics were concerned. On leadership and communication (including giving feedback) the score was medium lower end. The low score on these so called “soft skills”, vital to keeping companies fluid and dynamic, indicate that Romanian managers don’t believe in the usefulness and value of people management and organisational culture.

Coming back to the small group, the true power of it lies in its flexibility and, when used properly, can be a remarkably effective problem-solving tool. In effect, it can be the number one defence against formal matrix structures, if certain rules are applied. Rule number one is that there aren’t many members of these groups, usually less than ten. Another golden rule is that the reporting level of the group and the seniority of its members are proportional to the importance of the problem. Thirdly, the duration of the group is very limited in time and membership is voluntary. Fourthly, the group is pulled together rapidly, when needed, and usually not accompanied by a formal process. Finally, follow-up is swift, no staff is assigned and documentation is informal and open. If used in a different way the small group will become, like any other tool adopted within a bureaucratic context, an end in itself and will be just another part of the rigid structure it was meant to fix.

“Do it, fix it, try it” is the favourite axiom of excellent companies. Getting on with it, especially in the face of complexity, does simply come down to trying something. The process of managing this can best be thought of as experimenting. The most important and visible feature of action bias within excellent companies is their willingness to try things out, to experiment, to test and learn. But most big companies have forgotten to do this. Rather, they prefer analysis and debate instead of trying something out, and they are paralysed by the fear of failure, however small. The critical factor is an environment and a set of attitudes that encourage experimentation. In other words, an environment where making mistakes is allowed, where people are empowered to take decisions and move into action, within the parameters of their position. In the hierarchical, bureaucratic and control-driven organisational culture of most Romanian companies, this remains is an unlikely scenario.

Peter Jansen is the Managing Partner of The Bucharest Consulting Group
(www.bucharestconsultinggroup.ro), the exclusive partner in Romania of
The Boston Consulting Group.