Design Culture

A design-focused organization's main cultural driver should be independence. Its designers should feel free to get their inspiration from anywhere they can. Flexibility, learning, and enjoyment support that. But independence rules.

Specialized Organization

A specialized organizational structure works especially well in design-focused organizations. Designers and inventors have special and often rare strengths. The rest of the organization has to nurture and protect them, minimizing unproductive distractions so they can spend their time creating, adapting, and arranging.

CEO as Chief Enabler

In an organization basing its success on its ability to nurture and protect its designers, the chief executive officer (CEO) has to be the chief enabler. Great leaders bring out others’ self-confidence. They do this in large part by emphasizing confidence-building in their approach to the direction, authority, resource, and accountability aspects of delegation. This is especially important when it comes to designers.

• Direction: Emphasize the problem you need solved or the opportunity you can take advantage of. Then give them as much freedom as you can about how they solve it. The more they can think with the mind of a child, the better.
• Authority: Give them the authority to experiment. By definition, the “new” won't match what you currently have and do. Note the authority to experiment is not the authority to implement.
• Resources: This one is counterintuitive, but adding constraints increases innovation. It's helpful to think in terms of scope, time, and resource constrained creative sprints instead of never-ending quests.
• Accountability: The key here is assuming success. Have confidence in your designers. Recognize and reward them for their achievements at the end of creative sprints along the way to bring out their self-confidence.

Operate with Freeing Support

Design behavior is fragile. All need to give it freeing support to keep it going. The ABCs of changing behavior apply: antecedent, behavior, consequences.

The antecedent is prompting designers to create, adapt, and arrange as part of your approach to delegation. Assuming you've got the right people with the right direction and support, they are likely to do what you ask them to do.

The trap here is consequences, and especially unintended negative consequences for positive behavior. Make sure you and everyone interacting with your designers are:

• Positively reinforcing desired behavior (creating, adapting, arranging)
• Discouraging undesirable behavior (outside acceptable norms)

Change the way you:

• Positively reinforce undesirable behavior
• Discourage desired behavior (by applying others' standards to their output)

You may have success by leading with principles (as opposed to more rigid policies or more directional guidelines). Principles help people come to their own decisions in a way that fits your vision and values.

George Lucas and team created Star Wars: Episode IV—A New Hope, and Steve Jobs and team created Apple's first iPhone, which were amazing first versions. Their subsequent companies have created numerous versions of those core products with even greater success leading with a design-focused organization.

Production Culture

A production-focused organization's main cultural driver should be stability. People should know what they are expected to do and get it done consistently and reliably. Although that suggests a degree of independence and there should be a clear focus on results and respect for authority, stability rules.

Hierarchical Organization

Hierarchical organizations work especially well in production-focused organizations. Production is all about bringing disparate elements together. Individual performers should follow the direction of first-line supervisors in working on their pieces. Those higher and higher in the hierarchy will have broader and broader views of how things fit to optimize how they are all pulled together.

CEO as Chief Enforcer

In an organization basing its success on its ability to produce reliably and consistently, the CEO should be the chief enforcer. If everyone is looking up in a hierarchy, they are ultimately looking up at the CEO. Any wobble there can destabilize everyone in the hierarchy below the CEO—which is everyone.

Lead with policies mandating definite courses or methods of action that all must follow.

• Policy: mandatory, definite course of method of action that all must follow
• Guidelines: preferred course or method of action that all should generally follow
• Principles: ways of thinking about action

Operate with Command and Control

For production-focused organizations, policies inspire and enable. Producers find clarity inspiring. Tight swim lanes enable them to do their job.

• Producers work best with swim lanes separated by solid walls topped with barbed wire.
• Deliverers working across a matrix want to know where various players' swim lanes intersect.
• Servers focused on customer experience need flexible swim lanes so they can go wherever required to satisfy their customers.
• Designers and inventors don't even want to be told they have to swim, let alone have swim lanes.

Producers love enforcers. Others in the organization won't be so sure. Those who value independence will see the organization as too controlling. Those who value flexibility will see the organization as too rigid.

If you're leading producers, be unapologetic about your policies and controls. Those who choose not to follow those policies and live with those controls should choose to work elsewhere. Or you should make that choice for them. The number-one regret experienced leaders have looking back on their careers is not moving fast enough on people. In a hierarchy, people will look to the leader for examples of leadership. In these cases, some early public hangings can send exactly the right signals to those looking for stability and clarity.

Note the hierarchy could be a double hierarchy in a helix. As De Smet, Kleinman, and Weerda describe it, the helix is a substitute for a matrix.¹ Each person has a capabilities manager and value-creation manager. As they describe:

• The capabilities manager oversees the employee's long-term career path, has the power to hire or fire, and drives performance evaluations with input from value-creation managers.
• The value-creation manager sets priorities, provides day-to-day oversight, and ensures that the employee meets business objectives.

When George was in China with Coca-Cola, the concentrate plant in Shanghai reported to him as its value-creation manager. But the plant was a production machine and really took its direction from the global head of production who made sure the global policies were followed completely. No one on the planet thought George had the authority to tinker with Coke's secret formula.

Delivery Culture

A delivery-focused organization's main cultural driver should be interdependence. Its people should think about the ecosystem first and ask how to make the system work better every chance they get. Stability, order, and safety matter on the way to creating scalable, repeatable processes. But interdependence and connections rule.

Matrix Organization

Matrix organizations work especially well in delivery-focused organizations. This forces the supplier and customer-focused groups within the organization to work with the functionally focused groups. Matrices work when everyone buys into shared objectives and goals and fail when people try to protect their own turf first.

CEO as Chief Enroller

In an organization basing its success on its ability to enroll suppliers, allies, customers, and clients who can benefit from each other's offerings, the CEO has to be the chief enroller. The CEO's job is to bring people into the ecosystem and get them to collaborate with each other.

Operate with Shared Responsibilities

Delivery-focused organizations succeed only when people accept shared responsibilities. They live in the world of handoffs. Things have to be ready to go when people are ready to pick them up. People have to be ready to pick things up when they are ready to go. That is the foundation of shared responsibilities.

The main trap for delivery organizations is diversification. Many get fooled into thinking they can create more value and make more money by dialing up their services. The U-shaped profit curve rules. Supermarkets deliver large quantities of acceptable flowers to their customers at relatively low prices. Flowerbx delivers smaller quantities of near-perfect flowers at relatively high prices. They both win. Hallmark tried to charge higher prices for barely acceptable flowers and lost.

Know what you do. Know where you play on the U-shaped profit curve. Focus to win. Or dilute your efforts and lose.

Team charters are especially useful in matrix organizations. Use them to get team members aligned around their purpose, objectives, context, approach, guidelines, and implementation accountabilities. (See Chapter 9 for more on team charters.)

Service Culture

A service-focused organization's main cultural driver should be flexibility. The frontline people interacting with customers must have the flexibility to meet their needs and exceed their expectations on the spot. Interdependence matters because the frontline people will need to leverage the rest of the organization to help customers. Purpose and caring matter a great deal in uniting all around customer service. But flexibility should rule.

Decentralized Organization

Decentralized organizations work especially well in service-focused organizations. This is inextricably linked to flexibility. Drive decision-making as close to the customer as possible.

The fundamental difference between a decentralized organization and a matrix organization is control of resource allocation decisions. In a matrix organization the geographic or customer-facing people share decisions with functional leaders. For example, the Florida state manager and national marketing manager must agree on the Florida advertising spend. In a decentralized organization, the geographic or customer-facing people make their own decisions, like the Florida advertising spend.

This makes for faster, more flexible, more customer-experience focused decisions.

CEO as Chief Experience Officer

In an organization basing its success on its ability to create superior experiences for its customers, the CEO has to be the chief experience officer. They own the vision and the values, and they must live customer experience in everything they say, do, and are. If they don't fundamentally believe, they will get caught.

Just as Ben Hunt-Davis and his teammates evaluated every choice with the question, “Will it make the boat go faster?” on their way to Olympic rowing gold in 2000, the chief experience officer should evaluate every choice with the question, “Will it improve customers' experience?”

Jim Donald has taught the value of the customer and experience first approach for service-focused organization throughout his stature career in hospitality, retail, and grocery. He successfully guided Starbucks as CEO and Albertsons as president and then cochair, among other great businesses with a similar methodology.

Operate with Guided Accountability

Great customer service organizations operate with guided accountability. Everyone holds themselves accountable for how they make each and every customer they come in contact with feel.

Clear guidelines are critical. Think Goldilocks. Policies—mandatory, definite courses of action that all must follow—are too strict. Principles—ways of thinking about action—are too loose. Guidelines—preferred courses or methods of action that all should generally follow—are just right, freeing people up to act in the best interest of the customer with the guidance they need to make decisions on the spot.

If you're leading a service organization, both parts of guided accountability are critical to effective decentralization. Decentralizing without guidance is abrogating your authority. Guidance without accountability turns the guidance into theoretical gibberish. Only by letting people take up true accountability for the customer experience within agreed guidelines will things go the way you want. Though, if you've read this far you know that it's not about what you want. It's about what the customer wants.