Recently, a young lady left one of the Top 5 A&D companies for a new career at one of the large oil companies. This young lady had graduated a year before from the University of Southern California with a B.S. in Industrial Systems Engineering, and had been hired as a Manufacturing Engineer. Roughly a year later, she departed, frustrated with the company environment. In her words,
Business units did not work together so the teams I worked on were very dysfunctional. It was always a blame game between different units when problems arose, and every group was constantly trying to get out of doing work by saying it was another groups responsibility. I am a person who will jump to fix something when I see a problem, but in this environment I was discouraged from doing this because "it was not our job." Also, people did not show up on time to meetings even when they were with third party companies, which I thought was embarrassingly unprofessional. ... I talked to some people at [company] about it; several people were on my page but others were very anti-change. I [think] the majority of upper management understands the problem, but there is an inability to implement cultural change because the majority of employees have been there 20 plus years and are very stuck in their ways. Hopefully they [will start] to work together or I am afraid more individuals will leave the company out of frustration.
Does this sound familiar? Is this disillusioned young engineer describing your company? Is there anything that can be done?
Now, back to the memo, written by Brad Garlinghouse (a Senior Vice President at Yahoo!) in 2006. It describes how Yahoo! suffered from some of the problems described above, and what he proposed to do about it. With hindsight, we can note that his "peanut butter manifesto" was not fully implemented, nor was it entirely successful--but it nonetheless stands out as clarion call for management action that should be trumpeted by many (if not all) leaders in A&D management, if they are to address the issues facing the industry.
Mr. Garlinghouse wrote the following to his colleagues:
I believe that we must embrace our problems and challenges and that we must take decisive action. We have the opportunity -- in fact the invitation -- to send a strong, clear and powerful message ... that we recognize and understand our problems, and that we are charting a course for fundamental change. Our current course and speed simply will not get us there. Short-term band-aids will not get us there.
We lack a focused, cohesive vision for our company. We want to do everything and be everything -- to everyone. ... We are reactive instead of charting an unwavering course. We are separated into silos that far too frequently don't talk to each other. And when we do talk, it isn't to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics. Our inclination and proclivity to repeatedly hire leaders from outside the company results in disparate visions of what winning looks like -- rather than a leadership team rallying around a single cohesive strategy. I've heard our strategy described as spreading peanut butter across the myriad opportunities...The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular....
We lack clarity of ownership and accountability. The most painful manifestation of this is the massive redundancy that exists throughout the organization. We now operate in an organization structure -- admittedly created with the best of intentions -- that has become overly bureaucratic. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens our company with unnecessary costs. Equally problematic, at what point in the organization does someone really OWN the success of their product or service or feature? ... there are so many people in charge (or believe that they are in charge) that it's not clear if anyone is in charge. This forces decisions to be pushed up -- rather than down. It forces decisions by committee or consensus and discourages the innovators from breaking the mold ... thinking outside the box. ...
We lack decisiveness. Combine a lack of focus with unclear ownership, and the result is that decisions are either not made or are made when it is already too late. Without a clear and focused vision, and without complete clarity of ownership, we lack a macro perspective to guide our decisions and visibility into who should make those decisions. We are repeatedly stymied by challenging and hairy decisions. We are held hostage by our analysis paralysis. We end up with competing (or redundant) initiatives and synergistic opportunities living in different silos of our company. ...
We have lost our passion to win. Far too many employees are "phoning" it in, lacking the passion and commitment to be part of the solution. We sit idly by while -- at all levels -- employees are enabled to "hang around". Where is the accountability? ... As a result, employees that we really need to stay (leaders, risk-takers, innovators, passionate) become discouraged and leave. ...
If we get back up, embrace dramatic change, we will win. ...
1. Focus the vision. We need to boldly declare what we are and what we are not. ... We can't simply ask each BU to figure out what they should stop doing. ... The direction needs to come decisively from the top. We need to place our bets and not second guess. ... We need to make the tough decisions, articulate them and stick with them -- acknowledging that some people ... will not like it. Change is hard.
2. Restore accountability and clarity of ownership. Existing business owneres must be held accountable for where we find ourselves today -- heads must roll. ... We must redesign our performance and incentive systems. I believe there are too many BU leaders who have gotten away with unacceptable results and worse -- unacceptable leadership. ... We must signal to both the employees and to our shareholders that we will hold those leaders (ourselves) accountable and implement change. ... It must be very clear to everyone in the organization who is empowered to make a decision and ownership must be transparent. With that empowerment comes increased accountability -- leaders make decisions, the rest of the company supports thosse decisions, and the leaders ultimately live/die by the results of those decisions. My view is that far too often our compensation and rewards are just spreading more peanut butter. We need to be much more aggressive about performance based compensation. This will only help accelerate our ability to weed out our lowest performers and better reward our hungry, motivated and productive employees.
3. Execute a radical reorganization. The current business unit structure must go away. We must dramatically decentralize and eliminate as much of the matrix as possible. ... I emphatically believe we simply must eliminate the reduncancies we have created and the first step in doing this is by restructuring the organization. We can be more efficient with fewer people and we can get more done, more quickly. We need to return decision-making to a new set of business units and their leadership. But we can't achieve this with baby step changes. We need to fundamentally rethink how we organize to win. ... two key principles must be represented:
Blow up the matrix. Empower a new generation and ... leave no doubt about where accountability lies.
Kill the redundancies. Align a new set of BUs so that they are not competing against each other.
I don't pretend that I have the only available answers, but we need to get a discussion going; change is needed and it is needed soon. We can be a stronger and faster company -- a company with a clearer vision and clearer ownership and clearer accountability. ... I don't pretend this will be easy. It will take courage, conviction, insight and tremendous commitment. I very much look forward to the challenge. So let's get back up. Catch the balls. And stop eating peanut butter.
Is this executive describing your company? Does your company suffer from uncommunicative--or even competing--silos, excess bureaucracy, decision by committee, and a lack of passion to win? Are responsibility, authority, and accountability misaligned? Does incentive compensation reward those playing to win, or only those who are playing not to lose? If so, then perhaps some of the organizational fixes proposed (or declared) by Mr. Garlinghouse might be worth considering.
Suppose you were to "blow up" your management matrix? What might the next generation management structure look like? Would decision-making be pushed down to program managers, who would be the mini-CEOs of their program fiefdoms? Or would you create program portfolios, with support matrixed to the programs only for a relatively limited organizational subset? If you had a blank sheet of paper, what org chart would you create?
There may be no "correct" answer to the foregoing questions. But we know from experience that organizational silos are the bane of effective and efficient leadership. Moreover, where silos exist, the spaces between the silos are "no-man's lands" of ambiguity and non-accountability, where nobody takes responsibility because decision-making authority is unclear. Time after time, we have seen the distance between the silos--measured in terms of geography, job function/title, and hierarchy--defeat the best management intentions.
Consider Mr. Garlinghouse's call to action. Is he calling to you?
< Prev | Next > |
---|