One constraint on implementing radical management is that the customer is on a different path altogether. A frequent example is where your customer is a government bureaucracy. You are aspiring to delight your client, and your client is saying, “Don’t bother with me such questions. Just deliver what the specifications ask for.”
In a June posting, I discussed whether public sector organizations are capable of implementing radical management and delighting their own customers or stakeholders. My answer was: in principle, yes, with certain constraints.
However, realistically, most government organizations are not even trying to practice radical management. One way of understanding how they function is to recognize that organizations operate at three levels, using a schema proposed by Ranjay Gulati in Reorganize For Resilience: Putting Customers At The Center Of Your Business (Boston: Harvard Business Press, 2009)
Level 1: “You take what we make.” Organizations at this level typically say that customers are at the center of the universe, but in practice continue to view the marketplace entirely through the lens of their own goods and services. The customers are incidental to the enterprise. This was the kind of management described in Frederick Taylor’s 1911 classic, The Principles of Scientific Management. It is still the case in most public sector organizations.
Level 2: “We believe that our offerings will be useful to you.” Firms at this level pay attention to and study their customers, but again, they focus on their customers through the lens of the company’s goods and services, while ignoring the larger problems that the customers may be trying to solve. Most established firms today are still at Levels 1 or 2.
Level 3: “We seek to understand and solve your problems with our offerings”: Firms at this level have made the leap from looking at their world from the perspective of their own products and services to looking at the world from the customers’ perspective and solving the customers’ problems. Firms at this level empathize with their customers and are continually evolving their offerings to meet those issues.
While radical management is operating at level 3, most government organizations are still stranded at level 1. They are paying scant attention to their stakeholders. Often they have not even taken any decision as to who their primary stakeholders are. As a result, no one really knows what the purpose of the organization is. The managers in such organizations typically follow rules and procedures, rather than systematically consider: how could we deliver more value sooner? These organizations are the quintessential bureaucracy, and the management is quintessentially Dilbertian.
The practices of Dilbertian management were described in the famous HBR article: Abraham Zaleznik’s “Managers and Leaders Are They Different?” Harvard Business Review. 1977, pp. 74-81.
- The manager focuses attention on procedure and not on substance. The manager focuses attention on how the decisions are made, not what decisions to make. That’s because the manager is typically working in a bureaucratic setting where the goals of the organization are neither clear nor perceived as worthwhile. In the place of goals that provide meaning at work and in work, there is a hierarchical structure, precise role definitions, and elaborate rules and procedures, which often conflict: managers have no way of knowing what is the right answer. The only safe place is to focus on process.
- Second, the manager communicates to subordinates and stakeholders indirectly by “signals”, rather than clearly stating a position. The traditional rule-driven bureaucracy requires both managers and workers to leave their personal views and attitudes behind in the entry lobby, before they enter the workplace. In this world, the managers’ personal views are irrelevant. The only safe way to communicate is to make use of the rules and deploy indirect “signals”, which obscure who wins and who loses. The manager hides behind process, saying: “It is not what I or anyone else believe that matters: it is what the system requires.”
- Third, the manager plays for time. With conflicting rules and procedures, and conflicts about priorities between different senior managers, managers have no way of knowing what the right answer is. The idea of using their own judgment is at odds with the idea that they left their own views in the entrance lobby. Hence playing for time and waiting for the dust to settle are ways of always being on the winning side. These CYA routines are played out, up and down the hierarchy.
Such practices are of course the antithesis of radical management. These frustrate the hell out of the people for whom they are supposedly providing goods or services. And they create workplaces that are stultifying to everyone who works there. But they are pervasive in government. When your customer is the government, they create real problems.
Because no decision has been taken as to who are the organization’s primary stakeholders, middle managers will often be unable to say with any assurance what would constitute additional value for the organization. They have made no decision as to who are their primary stakeholders, and haven’t even begun to examine systematically what would delight them more. Because they have no basis for making priority decisions, they act as Dilbertian managers and are unwilling to make any decision on priorities. Hence they cannot act effectively as the client counterpart for radical management.
What is to be done?
There are three main groups of actors.
The top leadership of the organization: These people have the potential clout to make decisions as to who are the primary stakeholders of the organization and then focus the organization on delivering steadily more value to those people. This is not easy but it can done: at the World Bank in 1998, after fifty years of institutional drift, with multiple competing stakeholders—governments of rich countries, governments of poor countries, contractors, NGOs, single-issue lobbyists, people living in poverty and so on—Jim Wolfensohn orchestrated a decision as to the purpose of the organization: the relief of global poverty, putting the poor people of the world as the primary stakheholders of the organization. This then set the stage for focusing the organization on delivering that. In the twelve years since then, progress on achieving that focus has been mixed, but at least a start has been made. Many public sector organizations have yet to make such a start. It is the clear responsibility of the top leadership to make that start.
Mid-level managers: Mid-level managers find themselves in a Dilbertian world of rules, processes and structures, with no clear focus as to what the organization is meant to be achieving. The challenge for them is to create “oases” of radical management, so that in their unit or department, a decision is made as to who the primary stakeholders are, and steps are then taken to deliver steadily increasing value to them. Where possible, the stakeholders should be involved in setting decisions as to what would create additional value for those stakeholders. Doing business in a radical management fashion with such units or departments will be relatively easy. Managers who establish such oases will need to be careful in managing the boundaries with the rest of the organization, which will continue in its Dilbertian rules-based fashion: managers will need to be aware that their unit or department will be perceived as doing things “differently”. It will be more productive than the rest of the organization, and so will attract all of the attention that rule-breakers tend to attract in a bureaucracy. Such oases should be regarded as beachheads for an eventual transformation of the whole organization into radical management.
Firms delivering services to the organization: Similar dilemmas will affect firms providing services to Dilbertian bureaucracies. Because the bureaucracy has made no decision as to purposes, and operates according to rules and procedures, it is unable to say what would delight its stakeholders. Instead, it tends to say, “Just give me X. I’m not interested in discussing how it could be made better or more responsive to my needs. Just give me X.” All too often when ordering products or services, they will issue a long list of specifications that includes all the things that they “might” need, rather than focusing on the few things that would delight their clients. In the language of an earlier post about the difference between 20th Century and 21st Century management, they will issue specifications for something that looks like an DVD controller—many buttons but hard to use—rather than something looks like an iPod—few buttons and easy to use.
In these situations, the firm delivering services may have to adopt the second-best solution and practice radical management internally, using a proxy representative for the ultimate client. An unsatisfactory compromise, perhaps, that nevertheless may have payoffs in terms of lowering the cost of its operations. For example, through the continuous innovation of radical management, Toyota was able, over time, to lower its cost of operations so that it could undercut the price of competitors, as well as produce a more durable product. It didn’t have to explain to its customers how it was accomplishing this: it just went ahead and did it. In time, the results eventually became obvious.
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