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Andrew Tani, Sr.
Your business is profitable. Good. You could be making more. But you're not. That's inertia. Inertia is the inevitable impact of your decision to use command and control (the organisational chart) as the primary--and sometimes the only--reference to inform and guide the relationships of people at work. For the benefits that you derive from each of the four key features of command and control, there are corresponding trade-offs. Organisational development and change management remedies have been applied over decades to remedy the trade-offs. These remedies have addressed mainly the symptoms. Until now they give only incremental relief. Where can we find the remedy for organisational inertia?
**Paradigma Kepemimpinan Orbex 4.0
Karya Andrew Tani, Sr, Pendiri & CEO AndrewTani & Co.
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iCoachAndrew
The remedy came to us when we stepped back and asked ourselves, "Why are people in command and control organisations driven by hierarchical, power-based work relationships?"
The answer is simple. The only frame of reference for behaviour that they have is the organisational chart. Take a long look at one.
As a visual representation of hierarchical relationships, the organisational chart is a perfect communication device for command and control. But that visual can do little else than establish the ladder of decision-making power held by individuals, and the consequent reporting lines between them. Like a static image, it simply captures the rank and status of all positions relative to one another at a certain point in time.
On a daily basis, how relevant are hierarchical relationships? They are only relevant on two occasions. When a decision has to be made and when a report has to be submitted.
The rest of the time, only network relationships are relevant. What is a network relationship? A network relationship is a relationship of free will. Neither party has authority to command. Think of the relationship of cooperation between members of the same team. And the relationship of collaboration between members of different teams. People execute work in teams that exchange values in the interest of the organisation.
As for the visual representation of the second frame of reference, a network of teams is the perfect communication device. It is a dynamic image that captures the relationships between individuals working inside and across teams. Properly orchestrated, the network of teams will impact your organisation's ability to execute strategy with speed and flexibility.
If we want people in hierarchical relationships to work with speed and flexibility, then we must give them a second frame of reference to cultivate those desired behaviours.
Keep the organisational chart to establish decision-making authority and subordination of individuals. Supplement it with the agile team network to establish the value creation linkages between your organisation's teams.
We call this process of evolving and establishing those two frames of reference for behaviour, Dual Frame Organising.
To construct a model for the agile team network, we turned to the broadest financial measure for indicating quality of management and leadership--return on assets. Its famous acronym is ROA.
The widely used financial ratio indicates the quality of management decisions and leadership action that went into utilising the assets of a business unit to generate last year’s operating profits. Bloomberg calls it management effectiveness.
In order to achieve sustainable profitability, your organisation faces twin challenges: strategic excellence and operating excellence.
Strategic excellence means making the right decisions about the business. Producing the right products. Serving the right markets. Covering the right geographic areas. Using the right technologies and ways to convince customers to choose your offering over others. The right decisions place the business in a position of advantage relative to competing forces. It is called relative strength.
Operating excellence means executing strategic decisions in the right way. Attracting, training and grouping the right people around key assets. Building winning teams. Building the capability to execute processes with agility and flexibility. It is called absolute strength.
To properly address those twin challenges in the digital economy, we redefined assets to include human energy and data. And then classified assets into two broad categories, namely operational resources and strategic resources.
Operational resources are employed to generate yearend profits, using an inward-focused mindset aimed at building the right capabilities. Strategic resources are employed to generate future profits, using an outward-looking mindset aimed at ensuring external survival.
This way of classifying resources is in line with the standard accounting practice of differentiating expenditures on the basis of the timing of their incurred benefits. Thus operational expenses, or OPEX, are accounted for in the profit and loss statement. And capital expenditures, or CAPEX, are accounted for in the balance sheet, with only the appropriate depreciation and amortisation expenses charged to the profit and loss statement.
The resulting agile version of return on assets can be visualised like this.
To build relative strength, a strategy management team applies the management of strategy using available strategic resources. This team is charged with articulating the organisational vision, mission and values. The team is responsible for strategy planning, implementation and evaluation.
Strategic programs are executed by project teams. A project team applies the science of project management to execute strategic initiatives using available strategic resources in line with a strategic funds budget.
To build absolute strength, an operating management team applies the management of operations using available operating resources. This team is charged with setting operating goals and standards. The team is responsible for implementation plans, budgets and controls.
Operating processes are managed by process teams. A process team applies the science of enterprise process management to execute key management processes for conditions of operating excellence. This team is charged with orchestrating the execution of operating functions.
Operating functions are executed by function teams. A function team forms a link in one of the key management processes. The collaboration that they need to execute excellent cross-function work is performed through their membership in process teams.
Sustainable optimum profitability is achieved when the twin challenges are addressed by a network of agile teams who are orchestrated to work in seamless harmony and organisational rhythm.
The important first step in dual frame organising is to establish a team of highly competent key players. They must understand the context of inertia discussed earlier and believe in the wisdom of dual frame organising.
At Indonesia Power, the country's largest power generation enterprise, the team is called the Orbex Management & Technology Excellence Centre. At Heidelberg-Indocement, the country's largest private sector building materials enterprise, the team is called the Orbex Management Technology Team. (Orbex is short for Organizing for Business Excellence, a Paradigm for Shaping, Aligning & Attuning Organisations.)
In order to successfully supplement command and control with an agile team network, your key players must have the leadership, the commitment and the involvement of your top management team.
Let us examine the foundations of dual frame organising that should unite your top management team.
Command and control shows individuals in hierarchical reporting relationships. The agile team network shows teams at work connected by value creation linkages.
Command and control drives compliance behaviour. You need it to establish the position power that will enforce order, and reduce chaos otherwise. Command and control enforces coordination work relationships.
The agile team network drives commitment behaviour. The network arrangement demands the personal power needed to stoke morale, and promote speed and flexibility. The agile team network cultivates cooperation and collaboration work relationships.
Both command and control and the agile team network share the same ultimate goal, sustainable profitability for growth.
Sustainable profitability demands the command and control organisation to be lean. To deploy the optimum number of people who use the optimum level of resources to get work done. That’s lean.
Sustainable profitability demands the team network to be agile. Develop the agile team network to address the twin challenges of strategic excellence and operating excellence. You build the network by training, forming, linking and orchestrating teams to do the right things for the business, and do them in the right way.
Strategic resources are managed by a strategy management team. The team orchestrates project teams who strive to execute strategic programs well for your relative strength.
Operational resources are managed by an operating management team. The team orchestrates process teams who manage key management processes. Each process team facilitates the collaboration between a set of function teams who strive to execute routine functions well for your absolute strength.
To activate the model, you need to form and develop four types of teams. A planning team sets strategic or operating goals and standards, and orchestrates the agile team network. A process team facilitates collaboration across function teams to achieve a specific condition of excellence. A function team executes routine activities to help achieve one or more conditions of excellence. A project team is tasked to execute a breakthrough initiative, and disbands when the project is completed.
Before you activate the agile team network, you must train all your people on the Five Dictums of a Winning Team. Their shared understanding and practice of the five dictums will cultivate the right work relationships for your agile team network.
The bedrock of a successful agile team network is highly disciplined execution. In Orbex, there are five dimensions of discipline that will impact excellent execution.
Time | Be in time, not on time, if you can.
Process | Comply with PCDCA parallel work cycles.
Skill | Whatever you have to do, become the best at doing it.
Balance | Know the boundaries and be sustainable.
Focus | Stay on course at all times.
To become an excellent execution machine, your organisation must create system time by formulating a meeting taxonomy that enforces compulsory attendance. Train and build a cadre of PCDCA Facilitators for your execution machine.
A meeting taxonomy is indispensable to maximise the economic and social value of bringing a team together, regardless of whether they do it in person or online. It is used to classify, define, schedule and hold team meetings. Each of the five types of meetings have a prescribed purpose and duration.
Ideally a daily checkpoint meeting at the start or end of business would take only 15 to 20 min. The team shares what happened the day before, what lies ahead, and the issues at hand. It's a great practice for any function team.
The decision-making meeting mentioned here refers to frequent regular meetings that need to satisfy some legal formality. Board meetings. Committee meetings and the like. Ideally it should not last more than 1 to 2 hours, by design. Deliberations can be kept that short only if participants are properly debriefed offline before each meeting.
Varying only in their frequency, all four types of teams in the network hold review meetings, working meetings and celebration meetings.
A routine review meeting can be completed in an hour, or two at most, only if issues faced by the reviewee are discussed. But it can only happen if participants have access to performance data from an information system. Without it, the reviewee is compelled to become the source of progress information.
A working meeting entails deep dive discussions. They can be scheduled or ad hoc. Relevant data is collected and analysed. The usual output of a working meeting is a set of recommendations for disposition by a higher authority.
Agile teams celebrate their fulfilment of any of the five dictums of a winning team, not just results. Celebration meetings nurture esprit de corps and a sense of belonging that impacts productivity.
The meeting taxonomy is used to prepare a calendar of events. The calendar creates organisational rhythm and system time. The secret of successful activation is the excellent coordination work done by agile team leaders assisted by PCDCA Facilitators, or PCDCAF.
The value contributed by a PCDCAF should grow over time.
At the onset, a PCDCAF is trained to perform the role of arranger/liaison. PCDCAF ensure meeting success, follow through decisions, document the results of meetings, and maintain the calendar of events. The traditional role of a team secretary is carried out here.
Qualified PCDCAF grow to become information provider by supporting fact-finding activities. Qualified PCDCAF manage data decks, anticipate the team's data needs, and secure IT support, as needed.
Professional PCDCAF evolve into full membership in the team's think tank activities. They participate in discussions, help analyse issues, recommend solution options, and fill in temporary team vacancies, as needed.
The command and control framework used by religious and military organizations for many centuries is still the most reliable way to unite individuals based on hierarchy—meaning obedience—and skill. How relevant is command and control for business in this digital economy, when agile innovation can be vastly more urgent than optimization, or doing more better?
Examine the strengths and trade-offs of the four key features of command and control, their strengths and the respective trade-offs.
Those trade-offs cause inertia. You're still profitable, no doubt, but you're getting less than the optimum. And you're aware of it. To remedy the trade-offs, you turn to some of the more popular management approaches and techniques.
The sustained use of those management approaches and techniques implies that the time and resources invested in them are justified. However, our decades of management consulting work in large organizations continue to show that they deliver only incremental relief from treating symptoms, and do not provide permanent relief.
What is the remedy for inertia induced by hierarchical, power-based work relationships between individuals who report to different function bosses. From people who work to achieve and get rewarded on the basis of meeting often unsynchronized function goals and standards? From people who have to wait for top management meetings to confront issues that had accumulated during the prior month or week?
Where can we find that elusive remedy?