CHAPTER 7
STRUCTURE AND CHAOS
The Duck and the Wolf were having dinner.
‘So,’ said the Wolf, ‘how’s your business?’
‘Well,’ said the Duck, ‘I’m busy chasing crusts of bread here and there. How are you doing?’
‘Not too bad,’ replied the slick, grey Wolf. ‘I have now organized a new pack that is ready to move in on those sheep in the valley, but as usual we have to watch out for the farmer, who wants to kill us.’
The donkey, who was sitting at a table next to them, could not resist listening to their conversation.
‘You could form a great team,’ he said.
‘Why?’ they replied in unison.
‘Isn’t it obvious?’ said the Donkey. ‘Duck, you and your mates could probably find more bread crusts if you organized properly and applied some method instead of just going where your beaks point. And you, Wolf, with your pack would probably find more sheep by improvising instead of hitting the same farm every time. If it works out you could start your own restaurant!’
That is why there is now a pub called The Duck & The Wolf, and I recommend that you try it – it’s quite good – and also that you run your own business in a similar fashion, constructively balancing chaos and structure.
Chaos is the creativity, innovation and constant trial and error that develop a company, but chaos can also kill the business. Structure is the framework, order and platform for running a business, but only structure will not lead you anywhere. The point is the right combination and balance. Put the two together and you have a winning formula.
This chapter is about organizing for leadership.
#070 Structure For Leadership (SFL)
The organization in which leadership happens.
Just as your business needs a structure, your leadership philosophy needs a structure, too. An organization for Formal Leaders is usually a traditional structure with hierarchies and several reporting layers. An organization for Mindset Leaders is more likely a structure with a flat approach, individual initiatives and less (or no) typical bosses. Now, it would be wrong to believe that a very flat and boss-less organization would have no structure. An organization made purely of Mindset Leaders would still need a structure, just a different one.
The game developer Valve is a flat company without bosses. In Valve’s employee handbook they call it Flatland:
‘We want innovators, and that means maintaining an environment where they’ll flourish. That’s why Valve is flat. It’s our shorthand way of saying that we don’t have any management, and nobody “reports to” anybody else. We do have a founder/president, but even he isn’t your manager. This company is yours to steer – toward opportunities and away from risks.’
Ultimately, the purpose of Valve’s organization is to produce better results, for the customers and for the company. In Valve’s flat, boss-less structure, every employee is regarded as what I would call a Mindset Leader, guided by the culture and core principles such as hiring more great people, providing high return for the company, looking for the most valuable work you could do and working on projects that can deliver value to customers. Much of Valve’s work revolves around projects, and it’s up to you to select the project you think you could contribute to the most, help organize it, improve it and maybe step up to lead the project. As they say at Valve: ‘Structure happens. Project teams often have an internal structure that forms temporarily to suit the group’s needs.’ Putting more emphasis on individual initiative, with less traditional structure, requires a system of checks and balances. For example, there are peer reviews (feedback from colleagues about your performance), stack ranking (your relative performance and value contributions, and accordingly your compensation) and a culture with a constructive approach to mistakes and screw-ups. With lack of traditional structure comes important individual responsibility.
In the general company or organization, typical leadership structures include:
- Roles – who does what, how can you influence it and who’s got authority?
- Reports – who’s your boss, or are you boss-less?
- Team – who works together in a group, and what’s the structure?
- Meetings – when and who do you meet regularly, and what is the purpose?
- Projects – what are they for and who runs them?
- Forums – where are you supposed to be and what are you doing there?
Now, there are three aspects to this. First, whatever structure you decide on must ultimately serve the purpose of your business and how you think you can achieve results in the best way.
Second, you need to find the right structural balance, for example clearly defined roles, simple reporting procedures, teams of the right size and composition, the right number of meetings and forums with a purpose, all according to your leadership approach and without too heavy bureaucracy.
Regarding forums, I always made it a priority to have a monthly gathering with the whole staff to provide everybody with transparent information, build culture and create energy. A forum is not really a meeting but any gathering that brings the company together. It could be a monthly meeting but also the annual Christmas party, a company holiday or a volleyball tournament. It can be the sales conference bringing in all the sales people or the introductory training week for new recruits.
Third, you have to make it work. People might be dissatisfied with their roles, dislike their manager, get on badly with their teams, and spend too much time in meetings and forums which don’t inspire anyone. How do you make it work when it doesn’t? It could be the structure itself that is wrong, for example, too many layers of hierarchy, too many meetings without any purpose, too many participants on a project. Think about how to make the structure really useful. Furthermore, it might be the composition of people that does not work or the attitudes. Here the Mindset Leader is important. It is the Formal Leader, in the traditional organization, who calls meetings and sets agendas, but it is up to everyone to adopt a constructive mental attitude that makes a meeting work. No leadership structure will ever work if people are not prepared to put positive energy into it. Here, the Formal Leader will benefit from the drive and passion of Mindset Leaders.
Think about it. The beauty, drama and energy of a football (soccer) match is thanks to the structure of the game. There are two teams, 11 players on each, two periods of 45 minutes and a simple purpose: to put the ball into the opponent’s goal. It is the structure that releases the energy. The same game without any rules or foundation would not be the same thing, just chaos. But unpredictability within a shared frame of reference creates magic.
It is the same thing with a company: it is the structure and organization of the business that releases energy. Focus, clarity and order are good things. Many different focuses at the same time, lack of clarity, and disorder take energy and time. But be aware – too much regulation and too many rules will be an obstacle to energy and growth. Your role as a leader is to find exactly the right balance.
Structure also involves the market you are in, the clients you sell to and what you offer them. It involves the underlying vision, mission, goals of the company. It involves the culture and spirit. Everything that relates to the way you do things is essentially structure.
The structure can also be an obstacle. If you have a team that does not work, even if each team member is a great individual, the solution might be to change the structure. Try a different team composition with members who can work better together with the right ‘chemistry’ between individuals, and find new roles for individuals in new team or business units where their strengths can be better applied. You have to believe that people can work together by improving relationships, focusing on operations and stepping up to meet challenges, but sometimes a divorce is best. On a higher level, a company with offices in several markets with a central approach to organization might consider decentralizing autonomy to each country. Think about how structure can be productive as well as an obstacle. (See also Release The Energy #060 RTE.)
#071 Too Many Chefs (TMC)
Who’s in charge?
There are two situations that potentially create confusion in an organization:
- There are several people responsible for the same task.
- One person has several different roles.
It happens that a company has two CEOs, or co-CEOs, who run the business together. For example, Research in Motion (RIM), developers of the BlackBerry, famously had two CEOs, Jim Balsillie and Mike Lazaridis, who founded the company in 1984. The reason behind the dual CEO set-up was that the two founders combined their skills in sales and technology. Eventually, it did not work because they failed to respond to the fast changes in the mobile market, so they were replaced by one CEO.
When you have two (or more) co-heads of a business, operation or department, I think you still have to make sure that responsibilities and expectations are clearly defined to avoid a mess. As a rule, I always prefer that one person is accountable for a defined area, for the sake of simplicity.
There can be situations where you have too many ‘bosses’, or ‘chefs’. One example of this is a situation in which there is a proper CEO, accountable for the ultimate results, and a management team with various different opinions about how to run the business. Here is a potential conflict between the Formal Leader and the Mindset Leaders (who are department heads, but not the formal leader of the company) if they are pulling in different directions. This is a delicate balance between engaged and passionate team members on the one hand and on the other hand destructive conflict from too many opposing views. Each meeting will then risk using much time and energy discussing the direction and strategy of the business. When there are too many chefs in the kitchen, eventually the business will suffer from in-fighting. You always want to encourage discussion, but there is a fine line between healthy debate and destructive disagreement. Mindset Leadership works best when there is a shared vision and direction, and the Mindset Leader can very well be the originator of that vision.
The other potentially problematic situation is when one or more people in your organization have several roles at the same time. A CTO in a company had three roles at once: besides being CTO, she was also the head of a new geographical market (Managing Director of the local company) and in parallel partly responsible for a new online business area. The end result was that all three areas ended in failure. She later became the Marketing Director, at the same time as being CTO, with equal confusion and lack of focus. Simplicity, and having one role per person, allows people to focus on what they do best while still allowing for Mindset Leadership.
The way people can and are supposed to step up and show leadership will depend on the structure and culture of the organization. In the traditional hierarchy it can be confusing when strong Mindset Leaders takes initiatives, while the flat company expects people to step up and be responsible while self-organizing around ideas, projects and results. You want clarity, not a kitchen with a bunch of chefs running around cooking their own individual soups.
#072 Avoid Lazy Meetings (ALM)
Don’t waste time.
Meetings. For better or worse, we spend much of our time in meetings. But sitting down and talking things through is a necessity in most operations. It goes without saying that you should run efficient meetings. The cardinal sin of meetings is wasting people’s time. Of the original seven sins – Lust, Gluttony, Greed, Sloth, Wrath, Envy, Pride – it is sloth that is most relevant to the issue of bad meetings.
Sloth is laziness, and in meetings it appears in many forms:
- Not arriving on time to the meeting
- Having no agenda or purpose
- Long discussions about unimportant things
- Making no decisions, reaching no conclusions
- Ending meetings without summarizing what was discussed
- Not taking minutes – nobody will remember what the meeting was about
- No action points, or anyone responsible for following up
- Not ending the meeting on time
- Booking a new meeting to waste even more time
To run efficient meetings requires a mindset which is all about fighting laziness. And asking: ‘Do we really need a meeting at all?’
#073 Clear On Process (COP)
Where you start, where you go and what will happen along the way
You have the more or less static structure and ‘set-up’ of the business or organization, but you also have the more dynamic and evolving characteristics of projects and ventures moving forward within that structure. A process can take many forms, for example:
- Establishing a company in a new market
- A software development project
- Planning next year’s budget and targets
- Recruiting new sales people
- Executing a strategy
The common ingredients are that you are going to move from A to B, you want to achieve some desired results and people are involved in various ways. As usual when people are involved, you have to be careful. There are a few things to keep in mind when planning and running a process:
- Show all participants clearly what is expected to happen at each stage
- Be clear on how everybody fits into the process and what is expected of them
- Share the goal and purpose of the process so that you are moving in the same direction
- Involve everybody in planning the process, to create ownership
- After the process, sum it up
At a course at the Stockholm School of Economics our teacher was the Swedish scientist and professor David Ingvar, famous for popular neuroscience and an author of several books on various aspects of human brain function. The workings of the brain, how we think, were also the topic of the course. Knowing a great deal about the mechanisms of the brain he told us students: ‘Now to make you remember and follow my lectures, I’m going to be like a US TV evangelist: first I tell what I’m going to say, then I say it, then I will tell you what I have just told you.’
That’s a pretty straightforward process you can follow. When a process gets messy, it is usually the negative result of a lot of people having differing ideas of what is meant to be happening. You can never be too clear on the process. (See Over-Communicate & Repeat #096 OCR.)
#074 Find The Ratio (FTR)
The fifty-fifty rule, the eighty-twenty rule, the ten-ten-ten rule.
‘Fifty-fifty’ suggests balance, for example giving 50% praise and 50% constructive feedback means that each element has equal weight. ‘Eighty-twenty’ suggests proportion, for example 20% of the clients contribute 80% of the profits. ‘Ten-ten-ten’ is a way of thinking about perspective, for example when looking at a decision, imagine how it will feel in the next 10 minutes, the next 10 months and after 10 years.
The latter approach was outlined by Suzy Welsh in her book Ten Ten Ten and I think it’s a great way of putting things into perspective. What might be a very tough decision in the short term, such as quitting your job, might not look too bad when viewed longer term. Also, when you have set your eyes on what you want to achieve in ten years (for example, having a great relationship with your kids) it guides you in the shorter term (for instance, making a decision now, such as working less, that supports that long-term ambition).
Regarding proportions, it is useful to understand how they appear in your work and organization. For example, imagine that the cost to deliver your company’s service is 33% of revenues, but the cost to sell those services to new customers is 200% of revenues. This makes the business unprofitable. Imagine that you spend four out of five days in the office busy with internal administration and staff meetings and just one out of five days with customers. Are you satisfied with the ratio of things in your work and life?
Balance, proportions and perspective all relate to the structure of your leadership in various ways. Think about it. An unbalanced lifestyle, unproportional actions and too short or long perspectives are bad leadership. A good way to think about your leadership is by trying to find the right ratio.