96. The Southern Ball: Can You Organize to Help Not Hinder?

Concept

A big part of the responsibility of executive leaders is organizational architecture. Existing companies have developed structures and systems, hundreds of systems, over the years that may or may not be helping current employees to do their jobs. Whether executives like it or not, they are organizational architects, yet many of them inadvertently create organizations that hinder rather than help.

Bureaucracy has its place. It puts decision making in systems rather than individuals. It protects large organizations from impulsive leaders. It gives employees and customers a sense of stability. But bureaucracies can also stifle creativity, timely responsiveness to market changes, and innovation.

Stephen R. Covey, author of Seven Habits of Highly Effective People, was my first instructor in business school. He told a story in class one day that I have never forgotten—a good example by the way of the effectiveness of a Level Three technique. He said a man went in to buy a suit. The salesman put him in front of a three-way mirror, put a suit on him and said, “What do you think?” The man said, “Hmm. I like it, but the right shoulder looks a little low.”

“Hmm,” said the salesman. “We could send it off to the alterer. He’d rip the sleeve off, stuff some padding in there, and re-sew it. That would take a couple of days or a week and cost more money. It would be a lot better if you would just raise your right shoulder a little.”

“Oh,” said the customer, “that looks better.” “Well then,” mused the salesman, “anything else?” The customer looked at the mirror and said, “Um, yes. There is too much fabric in the body of the suit. It looks floppy.” “Ah,” said the salesman. “I see. Well, we could send it off to the alterer. He would cut cut cut, snip snip snip, and stitch stitch stitch. That would be more time, more money, more bother. Why don’t you just tuck your left elbow in and take that fullness out?” The man complied and liked the look.

“What about the trousers?” asked the salesman. “Hmm. I like the length, like the hem. But there is too much fabric in the seat!” said the man. “Well,” said the salesman, “Again, we can send them off, cut cut cut, snip snip snip, stitch stitch stitch! Why don’t you just reach behind with your left hand and pull on the seat? That takes that fullness out!”

So the man liked the look of the suit and he bought it. And wore it out the store, shuffling along with one shoulder up, the other elbow tucked in, and his hand behind pulling on the seat of his trousers. Across the street two women were watching this. “Oh my,” one said. “I wonder what happened to that poor man!” “I know,” the other said. “But look how good his suit fits him!”

The point of Covey’s story was that too often management puts employees into jobs that constrain them in so many ways that they can hardly do their jobs. Further, after a year’s work, they conduct a performance review. The usual results of those reviews are “Good job! Now, next year do 10 percent better!” So, now the employees have to shuffle faster and faster while wearing the constraints that become more and more debilitating.

Worse, after a few years, one could take the suit (the job) off the man, and he would still walk with one shoulder up, one elbow in, and one hand behind. The job would have trained him to work in that way.

Wise executives will study and understand the pros and cons of the various structural alternatives and be very careful about implementing systems without understanding their implications and unintended consequences. We will have more on this topic below.

Examples

City government of Mexico City had a problem some years back, heavy unhealthy smog. Mexico City lies in a bowl surrounded by mountains at 7,382 feet altitude. So the city planners got together and decided to strike a blow at the smog that collected in this natural bowl. They made a law that every car with an even numbered license plate could drive on Monday, Wednesday, and Friday and that every car with an odd numbered license plates could drive on Tuesday, Thursday, and Saturday. This they thought will force people to car pool, cut smog in half and solve our problem. What do you think happened?

The result was that the smog in Mexico City doubled ! Why? Because people went out and bought a second car and because the average income level in Mexico City was—what do you think? High, medium or low? Low, so the second car they bought was cheap, old and a clunker that emitted more exhaust fumes.

Other cities like Beijing and Athens have also tried this system. With the same result.

Gator Financial (a disguised name) had a similar experience. Eighty percent of Gator’s revenue came in through telephone switchboards. A few customers complained that they couldn’t get through fast enough, so management got together and decided to make a new rule/system. They put an electronic device on every sales representative’s phone and told them we want you to answer every phone call within 20 seconds. This device will track how long it takes you to answer your phone. Our goal overall is 80 percent of calls answered within 20 seconds.

What do you think happened? Customer satisfaction went up, flat, or down? Why?

Down. Sales reps started putting the people they were helping on hold so they could answer the new incoming phone calls within the 20 second benchmark.

Both of these examples demonstrate that the problem with poor organizational performance is not always poor employee performance but often the poor design imposed on them by inept management.

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Challenge