"Is my organization making decisions based on an outdated philosophy that's no longer conducive to our success and growth?"
That question came from a guy overseeing an organization that's struggling to maintain revenue. He's been the boss for eight years, and many in the company believe he was responsible for the company's survival during the economy's meltdown. Regarded as a strong leader, he has a good understanding of the key metrics of success. His question showed me that he also recognizes that what may have been right in one environment may no longer be what's best now.
As a leader it's important that you set aside time to reflect on what's best for your organization. Times change. And the demands on organizations change with them. What was successful in the business environment of 2005 may be holding your organization back in 2010. Looking at how management decisions are made, I often see two very different approaches:
- Some organizations are extremely buttoned-down. In nearly every department, for almost every potential situation, there are well-defined rules and regulations that are closely followed.
- Others have very few rules or policies. In those places, issues are dealt with as they occur; "policy" is a more fluid concept.
Where does your organization fit? Is it the right one? Ask yourself these three questions:
- Is one of the two management approaches above more effective in general? If so, can it be applied across any organization as a "best practice" by any management team, in any environment?
- Is the best approach determined by the organization itself? Perhaps there are certain environments where one approach works and one won't.
- Are certain environments dealt with more successfully when an organization uses hard and fast written policy books, or none at all?
I think one's answers have a lot to do with your fundamental belief system. To some extent, your answers may reflect how you view the world in general.
Noodle, for a moment, on this: Are you operating from a position of abundance or scarcity? Your response will guide you as to which of the above approaches will work best for your management and leadership style.
Recent articles in Bloomberg Business Week and Wired Magazine verify the growing awareness of this premise. As a part of those pieces, authors reviewed industry stalwarts such as General Electric, once the world's largest corporation and most profitable enterprise, together with newer and faster entities such as Google — now arguably in a similar role. Regarding companies' style differences and results, the articles noted that:
- GE used detailed policies and procedures to grow into its size and profitability. Over two of its most successful leaders' terms, it built itself up by taking out competitors. However, it has floundered in an environment of shifting sand and with few precedents.
- Google has a leadership style that is far-less top down directed. Managers at all levels are called upon to reach into themselves for the right decisions at the time. During a period in which many organizations' growth slowed or even crashed, it continues to get bigger and more diverse.
In my experience leaders who come from a place of "scarcity" ( e.g., "there's only so much to go around" or "I don't want to lose what we've got") are more likely to manage their organizations with a focus on policy and procedures. They often operate with a tight fist. Limited flexibility is allowed in decision making. On the other hand, when a leader starts out from a place of abundance (e.g, " there is plenty for all of us"), then she or he is more likely to allow those on the team to make decisions themselves, trusting their own "gut."
How do you view the world and your organization's place within it? Now decide if you want more rules and regulations or fewer.
John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion dollar organizations and launching start-ups in both the U.S. and Canada. The author of two published books, he is frequently seen providing advice on TV, in magazines, and newspapers.