A Case Study: Of Decisions and Decision-Making

Don Rifkin, CEO of Nutrorim is faced with a difficult decision and one which cuts across ethical boundaries. Nutrorim’s stalwart product, ChargeUp, has undergone an upgrade with the additive Lipitrene, The new ChargeUp has just been released on a limited basis to local area retailers. Already, sales are up 20 %, but soon an investigator from a state department of health calls Nutrorim. He advises them that he is investigating 11 individuals who took ChargeUp who now have gastrointestinal distress. What is to be done?

Nutrorim decides to recall ChargeUp only to discover that the individuals with gastrointestinal distress became ill from a bug they got from their gym’s smoothie bar. The chain of events prompts Rifkin to question Nutrorim’s decision-making process. He invites a consultant to review his company’s processes. The consultant informs Nutrorim that for decisions that are routine and predictable, the process works well. However, when the decision requires clear winners and losers, the process seems to stall. The consultant, though, has only just started. He asks for volunteers to help him develop a better decision-making process. No one volunteers.

The problem with Nutrorim is not just about decision-making processes; the problem with Nutrorim is that it also faces a lack of true leadership.

True leaders are those who are able to exercise the right leadership traits at the right time, and to realize the best results. True leaders recognize that there are times when risks should be taken, and that there are times when risks need to be avoided at all costs. Also, a true leader knows when she or he must be firm and lead with conviction, and understand that there are times when she or he needs to be part of the team. True leaders know how to balance these traits and based on circumstances.

Rifkin is not effective at this balancing act. On one hand, Rifkin is a likeable person who has worked hard to build an "inclusive" environment within Nutrorim. Yet, on the other hand, he is inconsistent. For example, in a meeting with his executives and when a conflict arises between the Product Marketing Manager and the head of Research and Development, Rifkin simply asks the individuals to take their disagreement "offline." Rifkin did not attempt to facilitate a constructive conversation reflecting divergent viewpoints. This tactic would reaffirm his inclusive environment. Instead, Rifkin simply dispenses with the conflict in order to quickly gain consensus. The problem with this tactic, much like sweeping dirt under a rug - the problem remains, it's only hidden from view. In this one incident, Rifkin should have led a constructive discussion with a firm hand. Doing so would have culturally reaffirmed the value of an inclusive environment, while at the same time dealing with the polarity. True leadership demands the appropriate balance.

As it regards decision-making, clearly, a firm process needs to be established and in particular when there is a crisis. The decision-making process I would recommend is as follows:

1. Define and clarify the issue at hand.

2. Define both internal and external noise, that is, internal and external messages that are being received. Are the messages necessary? Are they reflective of the problem? Are they a hindrance? Define and clarify.

3. Gather all the facts; understand their causes.

4. Create a road map of options. Map-out the various consequences of potential solutions.

5. Read your road map. Which road takes you to where you want to be?

6. Select your best route, but also develop an plan if that particular road leads you astray. Avoid a route that is a compromise.

7. Explain your decision, follow-through with it, and stick with it.

The bottom line is this: the question is not whether or not Nutrorim made the right decision - the question is did it go about it in the best possible way? A firmer hand from Rifkin during the process would've 1) led to an appropriate decision, 2) gave everyone an understanding of potential outcomes and impact on the company, and 3) provided management with confidence so as to avoid "Monday night quaterbacking."

A Case Study: Of Silos and Collaboration

I found the HBR case study entitled Intuit Inc.: Transforming an Entrepreneurial Company into a Collaborative Organization to be very interesting. Basically, the case study reviews the cultural change methodology employed by Intuit’s new CEO Steven Bennett. Bennett goes about instilling cultural change in a very systematic manner. He accomplishes what he believes to be a critical mission, but in a highly un-collaborative manner, and one which resonates a “take no prisoners” mindset.

Here is a synopsis of Bennett’s activities:

1. The new CEO (Bennett) wants to move Intuit from a “siloed” culture to a highly collaborative organization. Bennett believes Intuit underperforms relative to the market, and the move to a highly collaborative organization is therefore critical in order to improve results.

2. In terms of leadership, Bennett also believes a collaborative culture is critical. For Bennett, successful organizations are those that compel leaders at all levels make decisions that are best for the “whole” rather than for “one person or a business unit.”

3. Bennett moves Intuit to a highly collaborative organization in two ways. First, he establishes an organization-wide process by which individual goals are set and people are held accountable for attaining them. Secondly, he fosters cross-unit collaboration and integration by establishing an organizational structure where individual teams require contributions from other teams in order to succeed.

4. Specifically, Bennett’s transformational process is as follows:

• Bennett increased the CEO’s span of control from 8 direct reports to 20. He called this “delayering” the organization. In doing this, Bennett wrote job descriptions and performance standards for all of his direct reports, emphasizing being goal-driven.
• Bennett brought a top-down planning process to Intuit. He also instilled “nonnegotiable budgets.” Regarding the top-down planning approach, Bennett implemented a basic corporate planning model, namely corporate goals are set, then unit goals are set to support corporate goals, and finally individual employee goals are set to support unit goals.
• Bennett instituted measurable performance reviews. He tied bonuses to individual goals and helped to develop more objective measurements. All of this resulted in fewer higher rated employees and a trend more to the “bell curve” of managing overall performance.
• Bennett proceeded with monthly operational reviews. Here, he used metrics to measure each function and business unit’s contribution. Bennett used these meetings to re-focus his team on critical goals, reaffirm ownership of goals, and to generate ideas.
• Bennett’s changes resulted in high turnover within the senior management level ranks.

5. Bennett develops a “leadership success profile” which he uses to define success for Intuit leaders. The “profile” becomes Bennett’s method of communicating company-wide leadership expectations. This helped to develop a common language within Intuit’s leadership ranks. Also, the concept of a common language was used throughout Intuit, as senior management began to use phrases from Bennett in their meetings with their own groups.

6. Intuit leaders also adopted a spirit of shared vision from Bennett. Again, a common language practice was used at the end of meeting, and for example, “does everyone have shared vision o that?” This too was used as a means to build collaboration.

7. Collaboration was built into performance reviews as higher performance ratings were given to those who achieved goals through collaborative methods. Additionally, the use of 360 degree performance reviews provided managers with input to their development plan.

8. Bennett also developed cross-functional metrics as a means to emphasize the absolute need for collaboration.

9. Bennett also bulked-up corporate functions as these functions seemed weaker than the decentralized business units. Bennett increased corporate budgets and also the number of corporate functions.

What is interesting to note is how Bennett went about building a collaborative organization – in a very un-collaborative manner. He adds functions that directly report to him and in doing so refers to this as “delayering.” While this makes the organization more horizontal, it increases the number of functions which in turn creates more formal silos. Also, his top-down planning approach is anything but collaborative as compared to a bottom-up approach. And, Bennett uses financial incentives through a re-vamped performance review system as a means to reinforce collaboration, rather than developing collaboration as a value so that it occurs in an intrinsic manner. Finally, Bennett bulks-up a corporate structure rather than allowing the strength of a decentralized structure to emerge.

Simply put, Bennett creates systems that force accountability and collaboration instead of building it from within and nurturing it. He does so with both carrot and stick.

Yet, for all his hard work and effort there are conflicts and polarities within his new culture. First, there is tension between the need to attain individual goals and the need to attain/give cross-unit collaboration. Another conflict or polarity evolves as the organization attempts to enhance collaboration, namely centralization versus decentralization. And, in establishing his goal-centered organization, Bennett raises the bar by setting aggressive goals. This only serves to heighten the tensions and polarities, and in particular within IT.

In IT, difficulties arise when the CIO, facing an ever-increasing complex IT infrastructure and previous decentralized mindset, goes about attempting to decide on a specific IT architecture and standards. Senior management is looking for increased technological standardization, yet business units want a decentralized approach that allows them flexibility. The choice seems to be between a centralized or decentralized approach. Regardless, how will the decision align with Bennett’s new culture?

To better understand the CIO’s dilemma, let’s review the concepts of centralization and decentralization within the context of IT. I am fortunate enough to have IT as part of my function. In an IT context, centralization refers to organizing all IT-related services into a single functional unit that then provides services to the entire company. A non-IT example would be Human Resources and how many companies handle this particular function. For most organizations all HR activities are centralized through a main corporate office. Ancillary units would receive HR-related services as required through requests to the central office. This type of organization make things run more efficiently and standards are more easily maintained through one unit versus several hundred.

On the other hand, decentralization gives individual functions or units responsibility for control over their own IT resources. Here, there is little consideration of other units or the company as a whole. There is value to this approach in that functions or units have the ability to make their own decisions and do what they believe is in their best interests for them to succeed. A major drawback may be interconnectivity between systems and the company and support cost structures.

In a nutshell, you have to view this dilemma as a contrast of the control, efficiency, and economy of centralization versus the flexibility and also efficiency that decentralization brings in meeting a function or unit’s goals.

In this case study the CIO must examine the alignment between IT centralization and the need for information sharing in the organization. In my view, the best solution is a shared internal services model, or hybrid between centralization and decentralization. The hybrid model captures the efficiencies of a centralized organization while keeping the support functions focused on the functions or units. Here, the central IT function would establish rudimentary standards to ensure data portability and effective communications between the functions or units, while allowing application and support flexibility within each function or unit. Each function or unit would have it’s own IT presences, reporting directly to the function or unit’s head. There would be no dotted-line to corporate IT, but rather periodic communication on technological issues where collaboration was needed to resolve issues of data portability and communication.

Lifelong Learning – A Commitment to Teachable Points

Lifelong learning is an ongoing commitment to learning. This requires developing a system that provides a person with opportunities to explore new ideas and experiment with new methodologies. It is a learning system that integrates a person’s own personal experiences, to include reading, observing, and listening.

Of critical importance to lifelong learning is a person’s ability to keep their mind open to those teachable points that may occur at the most unexpected times and places. Perhaps it is a magazine article that is particularly insightful, or perhaps it is a recently attended seminar, or even an idea from a colleague. The key here is to be aware of such teachable points and not only learn from them but act on them.

Lifelong learning is a classroom without walls or desks, without report cards, and without grades. You are the student and teacher. Here, you have the benefit of being able to spend your time learning those teachable points important to you, and you do so whenever you want to learn and at whatever pace you choose.

But in order for lifelong learning to be successful you must dedicate time to learning, and put a system in place that nurtures your learning. Also, you must commit to curiosity by exploring strange and new ideas, by asking questions of others, by reading articles, by simply listening to others and asking for their opinions.

Seek out teachable points and expand your world.

I’ve Learned to Clip My Wings, and Soften My Ways

The manager sat there unmoved and without emotion. This was this manager’s way, for she was, in her mind, perfect in every respect. After all, this manager had a solution for every problem. She knew exactly what strategies the company should implement, how to resolve process issues, how employees should be deployed, and those employees the company should terminate. Unlike others, this manager had an uncanny power to understand each and every employee, and was the ultimate judge of character and abilities, and best of all; she had a pigeon-hole for everyone. Yes, there was a spot for everyone and once you were placed in your special spot you were there forever. Oh, this manager was relentless in her pursuit of perfection; everything was mapped-out and in its proper place.

And there the perfect manager sat, as another manager sat across from her. The perfect manager sat motionless, indifferent to or unaffected by joy, grief, pleasure, or pain. She sat totally impassive, unwilling to accept constructive criticism from the other manager, unwilling to listen to the other manager, and unwilling to accept any effort of reconciliation. There was no need for the other manager to reach-out or attempt to reconcile their differences - none whatsoever; for the perfect manager knew all about the manager who sat across from her. She knew exactly what was in that manager’s heart and mind and she didn't care for it. She had already placed this manager in his little pigeon-hole. The die had already been cast; the game was forever played-out.

Of course, the perfect manager didn’t have to be human because she was warm and secure in her small little world. No harm could come to her. She was comforted by the knowledge she was right, always right, and the other manager was wrong. Of course, she had a plan, and this was it: She would let the other manager reach-out, apologize, and take responsibility for things. The perfect manager would allow this to happen and this would make her feel victorious. She would outlast the other manager, allow him to show his weakness, and this would reaffirm her superiority. She would do this with few words and no sign of emotion. Her coldness of expression and coldness of heart would be her guide. "In time . . . in time . . . it will happen," she thought.

. . . and it did.

The other manager reached-out and took partial responsibility for the situation. The other manager had taken the high-road, but the perfect manager refused to meet the other manager half-way. "There," she thought, "it's over." There was no smile on the perfect manager's face, no indication of emotion at all. Yet, deep inside the perfect manager was overjoyed in her perfection. In her mind, she overlooked all of her pigeon-holes, located the other manager in his special spot, and looked down upon him with a smile. She saw herself extending her hand and gently stroking the little manager’s head. "It’s okay," she said softly. "It’s okay. I understand."

As I sat watching the scene unfold before me, I was not angered by the perfect manager’s reaction. Instead, I became profoundly saddened by her behavior. For someone who was so perfect she was blind to her own faults and frailties. Here was person so warm and secure in a world she created, a world that protected her from reality and from herself. Indeed, the perfect manager had constructed the perfect world.

Then, it came to me. I remembered someone like the perfect manager. He was a young man and it was many years ago. And, he too had built a similar world. But in time, he matured and learned how to deal with people. He discovered that the perfect world he had built was not all that perfect, and that in time reality would consume him. I remember this young man because I am that person.

When the meeting was over I decided to listen to some music. I do not recall the name of the song that was playing or artist, but the first line of lyrics was this . . . I’ve learned to clip my wings, and soften my ways.

Diversity of Thought - Advocacy and Inquiry

In my organization our Employee Handbook addressed the issue of the importance of nurturing diversity of thought. Specifically it states the following:

“As a learning organization continuously seeking to attain and maintain the competitive edge through innovation, your Company places an extremely high value on diversity of thought. Diversity of thought is critical to reaching the most innovative, customer-focused solutions to the many issues, problems and challenges confronting our business. As such, it is the responsibility of every manager to value and secure diversity of thought in his/her work unit by employing and developing the highest caliber individuals differing from one another culturally, intellectually, experientially, as well as by race and gender. Attaining and leveraging diversity of perspective and thought is consistent with our values as a company. The processes of securing diversity of thought and outreach are inextricably linked -- both entailing expansion of our internal and external applicant pools to attract the most qualified individuals from the broadest possible range of sources.”

This well-defined position clearly states not only the importance my company places on nurturing the diversity of thought, but also that “every manager” is responsible to ensure the sanctity of it. Further, it spells-out specifically how this is to occur, namely by “employing and developing the highest caliber individuals differing from one another culturally, intellectually, experientially, as well as by race and gender.” Specifically, the manager must demonstrate a willingness to share ideas and perspective and encourage others in the group to do the same. Sharing shows that it is acceptable; encouraging others to share embeds it as part of our culture.

For me balancing advocacy and inquiry is absolutely critical to nurturing diversity of thought. An imbalance can easily restrict an expression of ideas, and this would be unacceptable.

Advocacy, Inquiry, and Emotional Intelligence

I’ve always been a big fan of Daniel Goleman’s Emotional Intelligence (EI) model. I believe the concepts espoused by Goleman are critical to understanding how a leader will apply the advocacy and inquiry approach to decision-making.

To understand this correlation, let’s start with effective decision-making. Effective decision-making requires data analysis, effective listening and reflection, and use of a systematic process that weighs the pros and cons of alternatives. For a person to be effective in listening and reflection she or he must understand and control their own emotions. Without this control, a person may overly advocate one position over another, or become so entrenched in a specific viewpoint that the necessary questions go unasked.

Advocacy and inquiry provides a rather simple decision-making model, but one that may be problematic. This model includes two approaches: advocacy and inquiry. The advocacy approach can be viewed as a person taking an intransigent viewpoint, that is, entrenched in a willingness to defend their viewpoint and persuade others. Conversely, inquiry can be viewed as the person’s willingness to gain more insight into an issue, an opportunity to gain a better understanding of the issue.

When taken together, advocacy and inquiry defines a continuum or state in which the decision-maker exists as she or he tries to navigate toward a decision. The decision-maker can slide along this continuum employing varying levels of advocacy and inquiry.

However, here comes my warning: If the decision-maker focuses excessively on advocacy she or he will alienate those participants who are needed to ensure an effective decision. On the other hand, and at the other extreme, the decision-maker who excessively focuses on inquiry may become muddled in data gathering and analysis thereby becoming indecisive.

The decision-maker will need to determine the level of advocacy and inquiry required and based on the interpersonal relationships involved. For example, in a conversation where the decision-maker needs to gain a better understanding of a participant’s viewpoint, inquiry will be high. In turn, there could be a conversation where the decision-maker needs to share her or his viewpoint on this issue. Here, advocacy will be high.

A leader will naturally apply advocacy and inquiry based on the situation. Where it becomes difficult for the leader is when his or her emotions become entangled in the process. Left unchecked, a leader’s emotions can prompt the leader to an excessive state of advocacy.

But what will make a leader be intransigent and thereby overly focus on advocating a specific viewpoint? Most likely, it will be their inability to understand and control their own emotions.

Goleman’s model states that a leader needs to be able to understand his or her emotions and understand the impact such emotions have on the environment, control his or her emotions and as necessary change emotions based on the situation, to understand the emotion’s of others and react to them accordingly. For Goleman, a leader who is able to attain a high level of emotional intelligence will excel at motivating others, managing conflict, and making decisions.

It is therefore simple enough: To properly employ the advocacy and inquiry decision-making approach, a leader must have a certain high level of emotional intelligence. Without it, the leader is doomed to excessively advocate a position and thereby alienate those participants who are needed to ensure an effective decision.

Polarities - The Heart of Conflict

One of my favorite HBR articles comes from the October 2006 issue. The article is entitled The Tools of Cooperation and Change by Christensen, Marx, and Stevenson, and at its crux is this: “The primary task of management is to get people to work together in a systematic way.” The authors discuss the importance of collaboration in minimizing conflict. For me, in the leadership game of rock-paper-scissors, collaboration is rock while conflict is scissors!

No matter how effective you are as a leader, or how good you are as a coach, conflict will occur because you cannot control the behavior of others. Great leaders and coaches know how to manage conflict, and they do so through a collaborative style.

A key to managing conflict is understanding the behaviors which contribute to conflict. Researchers Blake and Mouton identified five distinct types of conflict behaviors. Their classification is based on two independent components of conflict behavior: (1) assertiveness, defined as behaviors intended to satisfy one’s own concerns; and (2) cooperativeness, defined as behaviors intended to satisfy the other individual’s concerns. These components combine to specify five styles. My focus is on the collaborating style. This style is high in both assertiveness and cooperation: the person works to attain a solution that will meet the needs of both people. This orientation seeks full satisfaction for all and has also been called problem-solving and integrative style.

In managing conflict, the ultimate goal is to find a win-win solution. The collaborating style is the only one which provides a win-win solution. Compromising, which we are generally encouraged to do, is actually a lose-lose solution.

Breaking down the barriers to collaboration is an important factor of conflict management. Creating a supportive climate helps to encourage accurate communication and supportive behaviors. Defensive climates, on the other hand, are perceived as threatening or ominous. Assertive communication, use of “I” statements, and descriptive language foster a supportive climate. Statements that evaluate or place blame on the other party are viewed as defensive.

Conflicts can easily spiral out of control when emotions and defensive climates exist. If you feel a conflict is spiraling, it is best to bring in a neutral third party. Human Resources can serve as the neutral third party or mediator. Human Resources also serves as a resource and sounding board for both supervisors and employees. Conflict will not just go away -- do not avoid it. Get help if you need it. Get COLLABORATION and remember collaboration beats conflict!

Leadership and Teams

I hate the dentist; I hate spending thirty minutes in that chair staring into the eyes of someone I really don’t know as they inflict pain. It reminds me too much like a prisoner-of-war being questioned by the enemy.

But there I was at my six-month cleaning, staring into those eyes once again, wondering when it would all end and trying to think of something else to ease my worried mind. As I sat there hoping that the hygienist would miss all those sensitive spots I took time to reflect on leadership and teams.

Just before being strapped into the chair (okay, I wasn’t strapped-in, but the imagery works), and as I sat pretending to read a magazine in the waiting area, I observed a well-functioning team at work. Two individuals sat behind the desks in the office. One was a receptionist who handled all outgoing patients and insurance billing. I would speak with her after my interrogation. Another greeted me, found my file, and placed it in a bin on a door, a door leading to my assigned interrogation room. I would only interact with this person once, upon entering the office, and she would check to ensure that all my paperwork was readied for the hygienist. When my hygienist completed the current interrogation, she would take a minute or two to take my file from the door bin and review it. She would then call me into her room for questioning. During the interrogation, my hygienist would make notes to the file, and when I was finished she would give it to the receptionist. I would spend but a few moments with the receptionist to complete payment for my interrogation and schedule my next interrogation. I thought to myself, what a well-functioning team. Why? There wasn’t a dentist to be seen; no leader in sight for miles as far as I could see! The it hit me . . .

A good team makes decisions for itself. Self-management is key to effective teams. Decisions on how to complete tasks and projects should be left to the members of the team, not handed down to them from management. This practice allows a sense of empowerment and allows workers to feel they are respected for their competency. Both of these concepts allow greater job satisfaction and more willingness to work. Work teams are much like social groups. They are capable of handling their own minor conflicts and workloads without outside assistance. Teams must be allowed to self govern or they will never be more than side-by-side workers.

Also, this team had specific roles and processes in place. There were clear lines of authority and responsibilities, lines that were not crossed. For the leader (dentist), all that was necessary was to provide the appropriate structure and let the team go to work. The only problem is this: team members must have the ability to self-manage. If a team member is unable to work within the given structure, or perhaps feels it necessary to cross the lines of authority and responsibility, overall team performance will suffer and the leader will find it necessary to make a correction.

My leadership style is similar, that is, I try to provide structure for my team mates to operate within. I will coach those who do not operate well within the structure, or who have difficulties working within the constraints of their given authority. Eventually, if coaching efforts fail a correction is required.

Okay, next time I visit my interrogator I will need to think of something different. Perhaps, I will focus on decision-making within teams, and how certain magazines are selected for the waiting room.