Consensus of Commitment
“What?”
Michael’s face turned red as a tomato when he gasped “What do you mean ‘recall the product’?”
“The FDA instructed us to stop selling the supplement because it has to get FDA approval” Marissa replied squeezing in her chair.
“How come?” Michael banged on the desk. “We decided to launch it in Asia first. Why did you launch it in US?”
“No Michael” Marissa replied unconvincingly. “You were in the meeting when we decided to take a risk and launch it in the US”.
“Are you kidding?” Michael voice increased. “I wouldn’t even think about making such a ridiculous mistake.”
Marissa, the Chief Marketing Officer, decided she was better off recruiting some help from her colleagues.
“Check it with the rest of the team before jumping to conclusions.” Marissa replied, thinking that finger pointing wouldn’t change the facts. They screwed up. She decided to focus on rectifying the mistake first and pacify her CEO later.
3 hours later the executives gathered in the boardroom. The product had been removed from the website but the boardroom was still as tense as ever.
“We had 3 serious failures this year” Michael started.
“Michael, we don’t have clarity about decisions that we make.” said Joan, the COO. “We leave meetings with different ideas of what decisions were made. There is no clarity of what we should focus on most. This product launch went under the radar of all of us because it was not coordinated well.”
Silence filled the room. Michael frowned while he thinking how to answer.
Have you also left meetings “thinking” that you know what had been decided only to find later that you were wrong?
It happens often to all of us, but there is a way to avoid this.
Define a Thematic Goal
We have long term strategic goals and we have short term objectives. A Thematic Goal bridges between the short-term objectives and the long-term goals.
I love Patrick Lencioni’s definition for a Thematic Goal as “A single, qualitative focus or rallying cry that is shared by the entire leadership team and ultimately, by the entire organization-and that applies for only a specified period of time.” The Thematic Goal is the top priority of the entire leadership team for a given period of time. It aligns employees throughout the organization and is a tool for resetting direction when things get out of sync.
Thematic Goals are powerful because of the process of setting them. The leadership team members provide their suggestions, argue on the priorities and decide on the single most important goal that will be shared collectively. It requires every member to commit to the same goal and assume collective accountability to achieve it.
Is it possible to reach consensus before making crucial decisions? What if one or two members do not agree?
Well, depends if they share their disagreements or keep quiet. Working in Asia for the last 12 years taught me to “mine” for disagreements. Too many times projects fail because leaders wrongly assume that their teams are on board. Every time we make a decision, we should ask each person one by one for agreement and commitment. If even one person disagrees, then their concerns must be heard thoroughly. The dissenters must feel that they have been heard well and their concerns have been considered.
Consensus of Commitment
When we listen and consider carefully every disagreement and, given enough time to discuss, argue and convince, we can achieve Consensus of Commitment even though we have not achieved Consensus of Agreement through a process which is known in Intel’s culture as “disagree and commit”.
Disagree and commit is very powerful. It is a validation of a different opinion, a commitment to moving forward, and most importantly, gets things done. Plans are implemented. Strategy is executed.
Communication of Decisions
Unfortunately leadership teams that successfully commit to Thematic Goals still fail to execute because of one common mistake. They fail to communicate the decisions across the organization – upward, downward and sideways.
We usually focus on cascading decisions to our team members but most times ignore other stake holders like board members.
Peer to Peer Accountability
Once we commit to a Thematic Goal, it is the responsibility of everyone to call upon any of their peers who don’t meet their commitments. Most people don’t confront their peers when they fail to meet their commitments. They think it’s their peer’s boss’ job to call upon their peer commitments.
It’s not.
Peer to peer accountability is very powerful when it becomes organizational culture. People start taking their commitments seriously when they are called upon by their friends. They try much harder when they feel that they risk relationships by disappointing their colleagues.
Reaching clarity in decision making is not difficult. Just follow the process. Define a Thematic Goal. Listen, consider and discuss objections openly. Reach consensus of commitment by asking dissenters to “disagree but commit”. Cascade the decision across all levels of the organization.
Influence – The No. 1 Success Factor
Convincing our top management, our colleagues and their teams to follow us requires one crucial skill – influence.
Martin Orlov, the new CIO of a Fortune 500 retail company, was in a very tough situation. The company spent 10% of the overall expenditures year after year on the company’s legacy IT system. The company’s new ambition to expand the business into online retail would even double the budget. The IT team believed in the legacy system they have developed for more than 15 years. They did not attempt to replace it with a new platform.
Martin was confident that the legacy system could not be transformed into an ecommerce platform with mobile capabilities, social integration and global localized versions. During his first month he formed a committee comprised of the company’s senior management and business unit managers to propose a plan for the required ecommerce expansion while decreasing the technology expenditures.
Martin knew that the only way to reduce costs while enabling a new ecommerce technology was to eliminate the legacy system and move all the various platforms to an integrated one. The problem was that this proposal would increase the short term capital investment, but pretty quickly the company would see additional revenue from online sales and long term the company would see a drop in operational expenses.
Martin knew that he would step on the toes of many executives that would be affected. Most of them treated the legacy platform like it was their baby. He neither had the power to force any of them to accept his plan nor did he have rapport with the business unit managers. He did not know them well enough and they did not know him either.
Martin was not a person who would be discouraged by a challenge. He knew the problem before he joined the company but was determined to make a difference.
Martin started meeting all the systems programmers and analysts. He shared his ideas, found points of resentment and provided solutions to objections. When he reached agreement he asked for a sign-offs on the proposal. When he faced resentments he moved the people who objected to the bottom of the list and decided to address them later on when he would be ready with more supporters.
The process was exhausting and time consuming but Martin was persistent to receive full support through one-on-one meetings. He avoided “herd” meetings where some people follow other people because of politics or reporting lines. Martin scheduled second and third meetings with people that had objections and showed them the wide support he had received on the signed-off document using the power of social acceptance to support the plan.
Martin expected to complete this process in one month but it took him 2 months even before presenting it to the committee. The committee members were surprised when the presentation was done by the Vice President of Technology who was previously the most vocal supporter of the legacy platform.
The plan was approved on the first committee meeting because Martin addressed all objections and made sure that all resentments would be brought to the table, discussed and documented.
After this success most of us would probably take it immediately to the Executive Committee or even to the Board. Right?
Not Martin.
Martin repeated the same process with higher management. He met them one-on-one, explained the plan, showed the signed-off documents and add more supporters at the top management. He left objections to be addressed again in second and third rounds of personal meetings. This process was shorter because the top management did not deal with the technical details and focused on the business impact and the cost.
Martin customized every presentation to the specific needs of the people he met. He ended up with more than 10 presentation versions but those versions were varied to address the specific goals of stake holders from their point of view.
The Executive Committee who included all C-Level executives and some board members resolved to implement the plan and bring it for a Board approval.
After this success most of us would probably take it immediately to the Board. Right?
Not Martin.
Martin met every Board member one-by-one and eventually ended up meeting some of their advisors to ensure that they were not influenced by informal stake holders. Powerful advisors, even though are not part of the Board or the executive team, still have a strong circle of influence.
Martin even asked for the Chairman’s support before the Board meeting. The Chairman was very influential with the public directors. Martin has seen too many times supportive directors change their mind without shame on the spot and reverse their support just to follow their political cycle of influence. There was too much on stake to let it happen this time. Martin wanted to avoid surprises because failure meant the end of his short tenure with the company.
Two more weeks of personal meetings and calls with the Board of Directors resulted in full support. The Board resolved to eliminate the legacy system and invest $3 million in an integrated ecommerce platform which ultimately would have lower operational cost. Within 3 months since Martin had joined the company, he achieved what looked impossible.
Influential Competence is the single most important skill that will take us to the top. It is the ability to influence peers and top management to undertake crucial decisions.
Martin’s tough situation is a common one for new and experienced leaders. Most decisions are taken collaboratively by committees, boards and teams. The informal decision making process is more powerful than the formal decision making process.
How can we develop influential competence? To answer this question, let’s look again at the methods Martin used to convince his peers to take on tough and potentially divisive challenges and solve them through consensus.
Informal power
Identify all stake holders and make sure that they support the plans. It is surprising how many informal circles of influence exist within an organization. Some call it politics and decide to rise above the game. Ignoring the game guarantees failure. The informal stake holders are in most organizations more powerful than the formal decision makers.
One –On-One
Large meetings should be to seal decisions, not reach them. Meetings are proven to be the toughest platform to make decisions on controversial issues, innovative strategies, disruptive technologies or turning points. We are never sure of the various support groups that have been formed over years. The most time consuming but most effective way to dissolve objections or controversy is the one-on-one meeting. In this way we customize our presentation to the point of view of our audience. Rushing to bring a decision to the group is exciting but not an effective process.
Personal Agendas
Check-out our personal agenda at the door but check-in the personal agenda of the person we want to influence. Everyone has a personal agenda. Revealing personal agendas benefits the persuasion process. Personal agendas are not necessarily negative. They are directions that people and their teams have already engaged with or committed to. Personal agendas might also be out of the scope of the business as well. Whether personal agendas are legitimate or not, the more we reveal the better we can handle objections. This process requires trust and good relationships to remove barriers of sharing personal information. Understanding what drives people and show them “what there is for them” is still a powerful influential interaction.
Influential Competence is not something we were born with. It can be developed by following the process of identifying the informal and informal stake holders from all corporate hierarchies and outside the corporation, meet them one-on-one as many times as needed to handle objections and address stake holders’ personal agendas without pushing our personal agendas.
Engagement Achieves Commitment
It was already noon.
The meeting was going for more than 3 hours without meaningful progress or signals of what might be a course of action.
Joan felt that she had lost control of the meeting. Wei Ming, Hong Kong General Manager, bored all of them with long, too-detailed presentation of the Mainland Chinese market. He did not smile even a single time. He was sliding his hand frequently through his black thick hair staring at the screen where he projected his slides like nobody was in the Boardroom. Wei Ming seemed like they were wasting his precious time. His South-China plan was a done deal. At least, this is what he thought.
Ying Ping, Taiwan General Manager followed him trying harder to engage and entertain. Her much lighter presentation focused on the expected high growth in North-China also failed to attract attention from the participants. Neither speakers gave any new information that the rest didn’t already know. They also didn’t attempt to bridge the gap between the two plans. Even the usually charming Ying Ping skipped eye contact with Wei Ming.
Wei Ming kept himself busy with an impressive collection of what seemed like the latest mobile gadgets. Air MacBook, iPad, Android tablet and 2 smartphones kept fully occupied with everything except the discussion.
Joan stared for a few long moments through the window of the 53rd Boardroom of the Grand Hyatt Pudong at the breathtaking view. She noticed that everybody was texting, browsing, or emailing rather that engaging in productive discussion. She announced lunch break and stayed behind to organize her thoughts.
She has to get commitment for one plan. It won’t happen without active discussion during which the pros and cons of each option will be considered carefully. No more monologues. Everyone is so wrapped up in their own “wired” world, there doesn’t seem to be engagement during meetings. She was astonished yesterday when during dinner everyone was so busy connecting with the rest of the world but not with the people sitting around the table. Mobile technology does not support building relationships.
It has to be stopped during meetings!
They came back from lunch and Joan was ready with new rules of engagement. “We have spent the whole morning without reaching any resolution or even clarity of the business direction” she opened. “Our business won’t fall apart if we will disconnect for the rest of the day. Please turn off all your communication devices – tablets, smartphones, and laptops – and let’s get down to business”.
“I cannot turn off my mobile devices” Wei Ming said impatiently. “I am expecting a notice from China Telecom regarding the software contract.”
“Wei Ming, would you lose the deal if you were flying 13 hours to US?” asked Joan.
Wei Ming didn’t reply. He had never seen Joan so decisive and determine.
“Is this meeting important?” asked Joan.
She noticed all nodding their heads in agreement.
“Then let’s treat it with respect and reach consensus on the business plan”.
“We cannot reach consensus” said Ying Ping. “Our business assumptions are wide apart.”
“So let’s narrow the gaps. Wei Ming, please present the Ying Ping’s plan. Ying Ping, Please present Wei Ming’s plan. Focus on the pros of the opposite plan”
“There aren’t any pros in Wei Ming’s plan” Ying Ping erupted.
“This is what you think. Please present the pros that he suggested. Only by showing that you listened carefully to the opposite opinion, understood it fully and asked clarifying questions, would you earn the right to object. You don’t earn the right to object before you show that you can present the positive side of your counter plan. Does it make sense?”
There was silence in the Boardroom. Everyone look at each other with what Joan felt as shame.
“I agree” announced Warren, the CFO, turning off his tablet with exaggerating movement and put it in his bag.
The rest followed within seconds, even Wei Ming reluctantly.
It was a turnaround in the meeting. Everyone engaged in passionate conversation. Not surprisingly Wei Ming and Yong Ping had difficulties reiterating the opposite plan’s pros. In the next two hours they tried to challenge each other plan’s strengths. By 4:00 pm it was clear to everyone that both plans are viable and each plan had advantages and disadvantages.
It was James Miller, the Vice President of Sales, that broke into the discussion asking “can we integrate the North-China plan with the South-China plan?”
“Right!” added Samantha Anderson, the Vice President Marketing. “We keep the strengths and eliminate the weaknesses of both plans”.
“Warren, wouldn’t that increase our overheads significantly?” asked Joan.
“Not really. The overheads won’t be high if we open two modest offices and engage shared services in finance and marketing. It is actually a brilliant idea” replied Warren.
Everyone got excited except Wei Ming and Ying Ping. “What do you think?” Joan turned to them.
“Who will be the leader of China? We need one General Manager. China is one country. I am supposed to relocate to Shanghai to lead the market. Where do I stand in a combined plan?”
“That’s a valid point Wei Ming but let’s leave the personal decisions for later on and agree first on the solution” said Joan.
“It’s not personal.” Wei Ming responded irritated. “We shouldn’t differentiate leadership from the solution. The real decision is who will be the leader”.
Joan observed Ying Ping turning red. Then she exploded without noticing she is speaking Chinese “it’s all about you and your ego. Isn’t it?”
“Hold on” Joan intervened. “Let’s stick to the solution…and to English” she smiled. “The decision regarding leadership is important and we will not avoid it. Do you have objections to two business centers in Guangzhou and Shanghai? “
Joan spent the next 30 minutes asking each participant for objections, clarifications and commitment for execution.
This is the step most executives skip and what hits them back when plans are executed. There are always key players that do not support the plan and do not reveal their objections. They passively don’t go the extra mile needed to implement agreed plans. Most business plans require the extra mile. If individuals don’t support eventually they will fail their teams ‘innocently’, ‘nonchalantly’ and ‘inattentively’. These are the most dangerous players in corporate teams. They are like snakes that raise their heads long after decision was taken without sharing their objections at the decision point.
Joan didn’t want this to happen. She looked into the eyes of each one of them when she asked for objections, concerns and commitments. The verbal commitment was more important than the signed resolution.
Wei Ming and Ying Ping were still hesitating. It was only after they were guaranteed inclusion in the leadership plan that they admitted that from business perspective it was a good plan and they would support its execution.
They had a coffee break and Joan took the opportunity to offer Wei Ming and Ying Ping co-leadership positions. They will both be relocated to China, incorporate a new company, become the directors and hire a new local Mainland Chinese General Manager. They agreed on the spot.
An hour later, they summarized the plan and the action items and left to their rooms. Tomorrow they will prepare the execution plan.
Joan was exhausted but satisfied. She called Michael Johnson, the CEO, and briefed him on the results of the meeting.
“Good work Joan. It’s a good plan and as long as everybody is on board, I believe it will turn around our business. Good night” Michael did not wait for response. He couldn’t see Joan’s big smile.
Winner or Loser
Joan’s heart beat was fluttering while “flying” from Pudong Airport at a speed of 430 km/h hanging a few meters above the buildings. She was thrilled and disoriented, refusing to believe that she is on a train. The Shanghai Magnetic Levitation Train is the world’s fastest ground transportation, faster than a Formula 1 car. She arrived at her stop in less than 8 minutes and was transferred to the Grand- Hyatt. Time to refresh before meeting the rest of the team for dinner.
Joan stood for a few minutes staring at the magnificent view from her room on the 72nd floor. The Huangpu River cuts Shanghai into two parts each side a different world: the west side, Puxi, with its historical buildings and on the east side, Pudong, with its impressive modern skyline. Joan was fascinated by the view to the point she did not feel her jetlag. She headed to the river to take a walk and organize her thoughts.
The Bund river promenade at sunset was packed with tourists, vendors and just strollers who were not bothered by the chilly breeze. Joan reflected as she walked. She decided to avoid business discussions at dinner. They have two intensive days to finalize their China plan. Then Susan, the new Board member, will coordinate 2 days of meetings with government officials and potential business partners.
Joan, the COO of Star West, has been asked to introduce a new business plan for China in order to turn around the extended drop in sales. Her team’s efforts ended with a plan to develop the market in southern China to be managed by Hong Kong General Manager Wei Ming. An alternative plan was designed by the ambitious Taiwan General Manger Ying Ping who believed that northern China would be a better market. Both Wei Ming and Ying Ping are ready with tons of slides, charts and research to support their opinions.
The problem is that everyone knows Joan supports the southern China plan. It puts her in the position of being biased toward one side. “Is this the reason Susan, the new Board member, got involved?” Joan wondered aloud.
Joan feels that the biggest mistakes she has made in her transformation from functional to general management has been to take a stand before knowing all the needed information. She also has had difficulty dealing with new information that might affect decision making. She makes a mental note to herself “Review new information without holding onto love for previous ones.”
Change is tough!
She believes in the original plan for southern China. It was backed by most of Star West’s clients in southern China. However, some people think differently and she will have to deal with it.
Again she says out loud to no one, “How can I avoid the personal agenda of Wei Ming who wants to move to Guangzhou or that of Ying Ping who wants to move to Shanghai”?
Wei Ming is a reserved and articulate executive who had a great career in sales before joining Star West two years ago. Ying Ping is exactly the opposite. She is emotional, outspoken and a great communicator but less organized than Wei Ming. She joined Star West also two years ago after 20 years in software marketing to the electronic industry.
Joan’s thought race forward. If two managers promote two different plans, then when we decide to implement one plan the promoter of this plan wins and the promoter of the other plan loses. Can we afford to have one feels like a “loser”? Will the “loser” contribute with the same passion, and dedication he/she would contribute to their own plan? Joan has debated this issue since she became COO. In the new job, she needs a cross-functional viewpoint instead of a single business dimension that finance, operations or marketing managers normally have.
This is a typical transition that functional managers need to make to be successful in general management roles. They have to grow to see the various aspects of the business and support decisions that can be contrary to their functional role. If, for example, CFOs look only at cost saving in every business decision in the way they did as Financial Controllers, they miss the opportunity to drive business as part of the general management team.
Joan reached the end of the Bund promenade and turned back. She decided to erase her original plans, decisions and beliefs. She will facilitate the decision process without prejudgments.
But…
How can she direct two people who hold conflicting opinions? People are reluctant to surrender old beliefs. They tend to use new ideas to validate existing beliefs.
Joan was concentrating so much on her dilemma that she didn’t notice that people were looking at her talking to herself out loud while walking in the crowd.
Joan wondered if there is a third plan which could combine both the northern and southern plans. Joan startled the strollers next to her by speaking excitedly “I got it! If we derive a new plan from the 2 existing ones using the advantages and removing the disadvantages, we will have a plan where everyone wins. We can expand the north and south at the same time and take advantage of the experience of both Wei Ming and Ying Ping”. With a loud “YES” she made a high-5 in the air to no one, receiving knowing smiles from the crowd around her who seemed to enjoy her excitement.
At that point Joan started to believe that she will succeed to coalesce two directions into one plan. Now, Joan was excited to meet her colleagues. Tonight she will enjoy herself…no business talk!
Only tomorrow will she discover how difficult it is to change people’s minds…
Where Is Your Team?
Joan passed the security checkpoint and proceeded to the United First Class Lounge in the San Francisco International Airport. She had just found out that she would fly to Shanghai with Susan Taylor, the new member of the Board of Directors.
“Susan is not all bad news” Joan thought joyfully. “I wouldn’t fly First Class otherwise”. The ‘bad news’ was waiting for her at the lounge wearing a dark business suit and looked like she was ready for a CNBC interview. Joan felt uncomfortable in her very comfortable denim jeans.
Susan waived to Joan like an old friend. “Good to see you again Joan. Isn’t it exciting? We are going to have great time in Shanghai.” Joan was not so sure, but replied “Sure, Susan.” It was only after a few more pleasantries and champagne that Susan told Joan about her childhood in China, the challenging immigration to the U.S., speaking only Mandarin and the obstacles she overcame to get on top of the investment banking game. Joan was more reserved but reciprocated with her career and family story.
By the time the flight took off, Susan and Joan were deep in conversation. Joan’s plan to get a long sleep on board was forgotten.
The food was excellent. The service was efficient without being interruptive. Two hours into the flight, Susan asked gently “Joan, can I share with you my impressions from my first Star West board meeting?”
“Sure Susan. I would love to hear your feedback” replied Joan, surprised by her excitement about what Susan had to say. She admitted that Susan is brilliant and charming. She has an ability to connect quickly and spice conversation with wit and wisdom. Joan felt very comfortable and glad to have her as a companion on this trip. This feeling didn’t last long.
“I have never worked in a traditional corporate structure” Susan started. “In my investment banking career I spent a lot of time with CEOs and their teams. I watched them in the most stressful moments of their business lives: Entrepreneurs trying to transform their dream start-ups into multi-billion dollar conglomerates through IPOs; CEOs who raise funds from capital markets for businesses that stop growing; executive teams that struggle to convert debt to equity. Some were successful. Some were not. It was only after a decade that I started to see patterns of success and failure in the teams that I worked with. I shared this insight with my team. As a game, we used it to predict the success or failure of an IPO or fund raising. We ended up with a simple, yet reliable, team assessment tool.”
“What was the tool?” Joan asked eagerly.
“Hold on. The good is yet to come” smiled Susan. “We played that game for selfish reasons. Every IPO was followed by commissions and perks. We usually managed 2 to 3 IPOs at the same time. Allocation of our time to the IPOs with the biggest chance of success was crucial for our success”.
“Surprisingly, while we played ‘the guess who game’, we became the most successful IPO team in Goldman Sachs within a year.”
“How did that happen?” asked Susan curiously.
“Well, as we discussed the weaknesses of our clients’ teams, we started to avoid the same mistakes and improved our own team work. Imagine that we were a team of 5, each having graduated top of the class from the best law, finance and business schools”.
“I can imagine a collision of egos” Susan interrupted laughing.
“Exactly” Susan laughed. “There were many collisions until we witnessed brilliant teams losing their dreams because of big egos. They had much more to lose than mere commissions. They lost the once in a lifetime opportunity to have a successful IPO.”
“That is painful” nodded Susan, thinking about Star West’s delayed IPO that attracted her to the company in the first place.
“When I assessed your team in yesterday’s Board meeting as I did many times previously using the same prediction tool, the result is…… a failing team.” Susan said with sadness in her voice.
Surprisingly Joan was not defensive as Susan expected. “What did you see?” Joan asked.
“I saw 8 individuals that work in isolation rather than as a team” Susan replied without hesitation. “When Sam, your Vice President of Marketing was not ready with the market share information, she didn’t feel accountable for it and nobody else did either.”
“It is her responsibility as a Vice President of Marketing, isn’t it?” wondered Joan.
“No. It’s the responsibility of each of you, given that market share is your key performance indicator (KPI) as it should be.” Susan fired back.
Joan was fully switched on. “With all due respect to all the work you have done in the past, I disagree with your observation” Joan voice was becoming loud enough that most passengers turned to look at her.
“We have clear cut responsibilities and accountabilities” Joan quieted her voice. “We define ‘owner and driver’ for every project even if it falls within an individual’s job description. Sam definitely has sole responsibility for market share.”
“So who’s problem is it that your team doesn’t track market share? Does it help that you have ‘drivers’ but they don’t get things done?”
Joan was silent. Susan was right. Owner-Driver accountability at Star West usually is post mortem finger pointing rather than successful execution of growth initiatives.
“Only when the team has ownership for the results and only when the team is accountable, will the members work together to accomplish them, no matter who is the driver. The team members will support each other, back each other up, and compensate for each other’s weaknesses.” Susan was aiming straight at the problem.
“Star West’s current style of ‘owner-driver’ accountability is doomed to fail because it supports individualism rather than team work. This was exactly what our team discovered working with various entrepreneurs and CEOs. As long as members are accountable for their own area of responsibility rather than that of the whole team, success is doubtful.” Susan spoke thoughtfully.
Joan thought for a few seconds and pondered: “Isn’t the CFO responsible for finance, the CIO for Information Technology and so on? Why should Vice President of Customer Service be responsible for market share if it falls under the VP of Marketing?”
“If you guys agree that market share is your company’s goal, then it becomes your key performance indicator. If it’s your team key performance indicator, then each one of you is accountable for market share even though it falls under the responsibility of the Marketing VP.” said Susan. “So, that makes Sam the ‘driver’ and the team members all ‘owners’.”
Joan challenged Susan, “Each one of us has our own responsibilities. It is impossible to run a business when we are all accountable for everything”.
“You are not all accountable for everything. You are accountable for what you agreed as the corporation’s most important goals and your team’s deliverables. Your accountability as a team member is to follow up with your peers on their assignments and they are accountable to follow up on yours. More than that; you should call them on it when they don’t meet deadlines. You should push them with one hand and offer help with the other. There is nothing stronger than peer pressure”.
“I think I got it” Joan said. “I had a confrontation with Warren, the CFO, regarding the investment in a Chinese product that hadn’t done well. I called him on his accountability but felt that I was just as accountable as was the rest of the team. Yet, we had never defined it as a team goal.”
“Ambiguity in KPIs is the biggest enemy of any team. Then the team is just a group of individuals executing their own KPIs.” Susan was amazed how fast Joan grasped the essence of the problem and reflected upon herself to make corrections.
For a few minutes Joan and Susan sat quietly. The flight attendants dimmed the lights. Each looked at her watch. It was 3 hours since departure. Ten hours left before arrival in Shanghai. They decided to sleep and continue the conversation later.
Joan couldn’t fall asleep. The more she thought about team ownership instead of individual ownership for tasks, goals and projects, the more it made sense to her. It means that even performance reviews and bonuses should not be allocated solely on individual achievements but be based on the team’s achievements.
United flight 857 from San Francisco to Pudong is the best business course she has ever taken.
Transparency and Corporate Politics
Joan entered the boardroom followed by Warren galloping behind her. She had had bad meetings in her professional career. She did not know this would be the worst one.
Upon entry, Robert Smith was the most dominant person in the boardroom. The tall handsome man in his forties was the founder of West Star and Chairman of the company. He was a college basketball star who made it to the news when he declined an offer to play professionally for the Los Angeles Lakers. He decided to focus on a business which he’d started during college.
“Good morning Joan and Warren” smiled Robert. “Good morning” greeted Michael Johnson, the CEO of Star West and co-founder of the company. Robert and Michael had been friends since college. They played basketball and started the business together. They expected an IPO last year but the growth of the company stalled. Then they hired Joan and started focusing on a new start up in Los Angeles.
Joan noticed a new face in the room. “Joan, Warren, allow me to introduce you to Susan. Susan Taylor is our new Board member effective today.” Hello Joan. Hello Warren. Nice to meet you.” The three shook hands firmly.
“Let’s get straight to business. I will do a formal introduction” said Robert. “Good morning Ladies and Gentlemen. I would like to open the first Board meeting of the year by introducing Susan Taylor. Susan comes to us from Goldman Sachs after deciding to move home after 10 years in Hong Kong and China…and…ah… take a break of investment banking” Robert stopped, chuckled and continued “We are lucky to have her on board. Susan, please tell us about you.”
“Good morning everyone. Thanks for the warm introduction Robbie. I am grateful for the opportunity to help you guys grow the business and support your IPO aspirations. I was born in China and immigrated to US when I was 5 year old. I graduated in Physics from Princeton and a MBA from Wharton. I start working for Goldman Sachs after that. They relocated me to Hong Kong and then to Shanghai. I covered your industry as analyst and later managed IPOs for Chinese and Hong Kong companies now listed on the NYSE and NASDAQ. Please don’t hesitate to contact me directly. I promise to be in your face every quarter” Susan smiled.
Joan was the only person in the room that didn’t laugh. Susan Taylor looked like trouble. “At least it’s only once a quarter” thought Joan, not knowing that in just 24 hours she will see Susan all day every day. She also didn’t know that it would not be in the office. Not even in the US.
“Thanks Susan,” said Robert. “You already met my partner and CEO Michael Johnson over breakfast. Michael, please introduce the executive team of Star West.”.
“Thanks Robert” said Michael. “On my left is Joan Wilson, the Chief Operating Officer. Joan joined us almost a year ago from our competitor. She runs the operations of Star West. She’s responsible for Star West’s growth domestically and internationally, developing infrastructure, supply chain and strategic planning.”
“Warren Jones is the Chief Financial Officer. Warren is the first employee of the company. He has played a critical role in our success. Warren is a details fanatic. He knows the industry inside-out and he is a wizard at funding and cash flow management.”
“Emma Moore is the Chief Information Officer. She turned around our management systems and led the integration of our front and back office operations”.
“Alexander Miller, the CTO is responsible for the product development. He successfully patented our core technology in USA and Europe”.
Michael continued to introduce the rest of the executive team. “James Miller is the Vice President Sales. Samantha Anderson is the Vice President Marketing. Ashley Jackson is the Vice President Customer Service.” Each nodded their heads as Michael introduced them.
Michael is proud of the executive team of Star West. All of them are experienced professionals and well known in the industry. But as much as all of them as individuals were stars they have not yet performed well together as a team. The impact on the bottom line is pretty obvious. The star team of Star West was so far a losing team.
Michael opened the agenda with some remarks on the significant drop in sales and asked Warren to take it from there. Warren artfully navigated the business results without attracting attention to the heavy losses of the project. Joan continued by presenting the growth plans in USA and Europe.
The meeting went smoothly with minimal enquiries from the others. James’ presentation was weak as usual. It was obvious he was nervous. His list of accounts did not show growth and his plan to get new accounts was dull. It was Sam who saved face with a brilliant presentation of the industry seasoned with charts and facts supporting the sharp decline of the sales in the whole industry.
It was almost lunch time. They plan to break early because Robert invited all of them to a basketball match between The Golden State Warriors and Houston Rockets in Oakland. With the expected crowds at the stadium they will need to leave early.
During the presentations Susan was writing notes but didn’t ask even a single question. Joan looked at her from time to time. Susan frowned at her notes like she was trying to solve a riddle. Eventually she spoke just before Robert intended to wrap-up the board meeting.
“I have yet a lot to learn about your business but may I ask a question and excuse me if I jump the gun early”. “Go ahead Susan. Feel free” Robert encouraged her subconsciously glimpsing at his watch.
“Have I missed something? I cannot find any market share information in the Directors package” said Susan quietly.
There was silence in the room. Michael looked at Samantha. “Sam, do you want to take this?”
“Sure. I tried to consolidate some market information but it was unreliable. It is too pre-mature to present invalidated data.” Sam voice didn’t sound persuasive, even to her own self.
Susan looked like a cheetah running toward its prey. “The market information is a public domain. You are right that the market volume went down last year but how do you know you haven’t lost market share to the competition?” Sam flashed red but Susan continued.
“Not only may you lose market share without even knowing it, you may build your business in low growth regions as Europe and USA while your competitors flourish in China”. Sam opened her mouth to reply but Susan wasn’t finished yet.
“You are running the wrong plan at the wrong time and in the wrong place. As great as your product is, it won’t save you”.
You could have cut the tension in the room with a knife. There were seconds of silence that seemed like hours.
Joan was the first to break the hush. “We have a plan for China but we deferred the presentation to the next Executive Committee because there are some technical details that have to be resolved. We definitely are clear that China is our market”.
Warren joined in, “Thanks Susan. That’s a valid point but we already have a plan although Joan did not present it today”.
“Can you outline the plan informally? Susan asked Joan. “We will ask to take it out of the notes and without resolutions.”
Joan felt like she was about to cross a minefield. She was not emotionally ready for it.
“Is it a trap” she thought. But she could not ignore the challenge. In the following minutes she explained Star West’s plan to relocate the China head office form Hong Kong to Guangzhou with the management and account managers, to get closer to the customers, and recruit new account managers and service engineers in Guangzhou.
“Why Guangzhou?” interrupted Susan. Market reviews claim that the future growth will be in north China. Your plan doesn’t cater to this growth and your operations are primarily Cantonese speakers” Susan pushed.
Joan looked at Michael and Robert, but no help came. James and Sam also looked paralyzed refusing to make eye contact with her.
As much as Susan was a trouble-maker, her questions were sharp and to the point. She knew the business very well. But, Joan was a skilled fighter.
“Between the choice of putting resources on forecasts that might or might not happen, we decided to put our resources where the business is right now. When the growth in the North materializes, we will assess and take action” Joan explained with an inpatient tone.
The turning point came from an unexpected direction.
“Joan, I asked Steven Chen, Taiwan country manager, to send me a plan for China and he also support to establish our China head office in the North. More specifically – Shanghai”, said Robert.
“What? You asked Steven to submit a plan without informing me? This is inappropriate!” Joan felt uncomfortable confronting the chairman in front of the Board but she felt strongly about it. “We would have asked Steven’s opinion about China if we had thought it is needed. You were not transparent with us Robert” Joan spoke sharply at her Chairman.
“You are getting too emotional about this issue Joan. Steven has known me for many years. He just offered his help”.
“What a mess” Joan thought. “Now we have two plans. I bet Steven wants China and he plans to push Wei Ming Li, the China and Hong Kong country manager. This is unbelievable. Two country managers want China. Wei Ming plans to manage China from the South and Steven plans to take over from the North. This is not only two plans. It is also two personal agendas”.
Robert cut into her thoughts. “Susan suggested that you will fly tomorrow to Shanghai to meet with Wei Ming and Steven. She will also introduce you to some of her contacts in Shanghai.” Robert said quietly.
“Well it looks like all this was already set-up before the meeting, right?” asked Joan.
“We had a long breakfast” Robert chuckled.
Joan was still stunned at the unexpected China trip. She just acquired some confrontation skills early morning and now she has to find out how to facilitate confrontation between two ambitious country managers and handle a new director that is closer to the Chairman than all of the executive members. She couldn’t believe that only 6 hours had passed since her morning dream.
Joan was very upset about the new plan that seemed somehow to get support from Robert and Susan. Although it was a painful experience, she successfully detached from her emotions. She was determined to make lemonade out of a lemon. She will fly to China to fine-tune the plan.
She didn’t guess that tomorrow she will sit 13 hours and 6 minutes next to Susan on their flight to Shanghai.
Discussion is Not Decision Making
Joan was driving home from the office when her cell phone rang. She usually doesn’t take calls while driving. She let it ring for a long time but the determined caller was not giving up. So, in the end, Joan ignored her own rules and took the call.
The unusual tone of Warren’s voice alarmed her.
“Joan, have you seen Ken’s email?”
“I’m driving Warren. Couldn’t it wait till tomorrow?”
“No! Ken just sent email to a wide distribution that we had agreed to proceed with the China project. He instructed them to proceed with the implementation.”
“Are you kidding, Warren? We actually decided to hold the project until Ken would provide a white paper summarizing the various alternatives and execution plan. The project is just not ready for implementation” Joan reflected anxiously.
“That was also my understanding” replied Warren thoughtfully.
They both kept quiet for a moment. “How did this happen?” thought Joan.
Joan has been the COO of Star West for almost a year. It isn’t the first time she has chaired Star West’s Executive Committee. And, it wasn’t the first time her team left meetings with completely different, sometimes opposite, understandings. It wore her out!
“Are you still there?” Warren asked. Warren is Star West’s constantly worried, CFO. He has big concerns that things will get out of control when a large project moves forward without official sign-off.
“Warren, I don’t really get it. Wasn’t it crystal clear that we support the project but we want to assess the 3 alternatives? Ken didn’t give a presentation, a white paper summary or any kind of proposals. How could he conclude the project had been approved?”
Warren shrugged but Joan couldn’t see it. “Let’s talk about it tomorrow, I will read his email tonight. Thanks for calling”.
“What went wrong?” thought Joan. “How could an agreement by the committee to continue the assessment of the project be interpreted so differently by Ken? This is a complete mess. I must clarify any misunderstandings and announce that the project is still under evaluation.”
“Again, the ExCo will be perceived as a dysfunctional team. I wonder if this is a hidden agenda by Ken? Is it my leadership?” Her thoughts continued to wander while her car crawled slowly in heavy traffic over the Oakland Bay Bridge.
“Warren either has a personal agenda to manipulate the management team or his passion for the project filters out negative messages. If it is the latter, he missed the message that the project was not ready yet” Joan pondered.
Joan was still analyzing the communication glitch when she arrived home 30 minutes later. “Most likely, the dialog was perceived by Ken as a decision because I haven’t made clear that the committee’s dialogue had not moved to a firm decision”.
The following morning began with a miserable email exchange between Joan and Ken escalating the confusion to new levels. Ken claimed that Joan was blocking his initiatives and that they are losing precious time on non-decisive meetings. The gap between the two grew bigger and bigger.
So what’s the problem, really?
Joan’s team definitely doesn’t realize how the decision process works. They also believe that no decision gets made during long meetings. Decisions drag forever.
These two problems require that Joan and her team decide…how to decide.
We should not allow people to assume that a dialog is a decision making. Good dialog encourages people to speak openly about ideas, opinions, plans and agendas. They feel safe they are doing so. It does not guarantee a resolution will be reached.
Things go wrong when people’s expectations are violated. They don’t heartily commit to any decision if they do not understand how it was made. Managing expectations is a crucial step in the decision process. To avoid violation of expectations we should clearly separate dialog from decision. We must clearly define how decisions will be made, who will participate in the decision process and why.
Decide How to Decide
There are four common methods of decision-making:
Command
Command decision-making doesn’t involve others in the decision. We just give an order to somebody or receive an order from somebody. When we receive a command decision we can clarify what elements are flexible and what elements are not flexible. When we give a top-down order we can explain the reason for the command. The accountability lies with the command decision maker. “Buy-in” does not exist. Commitment may or may not be there. The higher in the corporate hierarchy a command decision is taken, the lower the chances of good execution are.
Consult
We make consult decisions when we get advice or ask for feedback but eventually make the decision by ourselves. The worst are decision makers who make up their mind and then consult just for the perception that the decision was made collaboratively. Our people are smart. They will figure out that we command but pretend to consult. If we have already made up our mind, let’s announce the decision and take accountability for the results.
Vote
Voting decision-making is when an agreed percentage is the threshold for a decision to be accepted. Decision making by voting does not guarantee a good decision. It reflects popularity rather than thorough critique, comprehensive assessment and methodical evaluation. Every percentage between 50-75% still leaves us with a significant group that lost the vote and is not necessarily committed to the decision. Voting is a good indicator for how far we’re from reaching across the board to commitment and how much more dialog is needed.
Consensus
Consensus decision-making is when everyone comes to agreement and fully supports the final decision. It is the most time consuming, exhausting, lengthy decision-making process. Through this process original proposals are amended and compromised to address the concerns of the participants in the decision process. It is the process that promises the highest commitments of the team members. But it can be easily manipulated if the Dialog rules are not followed carefully: Keep it safe and ask for every member’s opinion if they don’t speak out. Consensus is not achieved in silence. It is achieved in vocal conversations. It is achieved in fierce confrontations.
These four decision-making options represent increasing degrees of involvement, which result in increasing degrees of commitment. Of course we pay with decreasing degrees of efficiency.
What should be our preferred decision making process?
It depends on the situation. The more critical the speed of the execution is, the more we will tend to reduce involvement of other people to achieve prompt execution. Commitment is not there yet. Results may be poor. Sometimes instant actions are required. Sometimes we have to get things done promptly, without hesitation, usually during a crisis. If we explain carefully the reasons for the rush, we may even get commitment.
The complexity, width and depth of the subject also matters. The more complicated the execution is and the more resources it requires, a consensus decision-making process will provide a better accountability platform for the execution.
When we have more time, we should prioritize effectiveness over efficiency. Although the decision process will be lengthy and more people will be involved – the chances of successful implementation is very high. The extra time and effort by all involved to dialog thoroughly up front will save time, money and the stress of fixing mistakes later. Everyone contributes – everyone benefits.
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