MUSCLE BUILD YOUR ORGANIZATION
continued — back to start

Unclog the organization

The way a corporation is organized and runs can either facilitate or thwart the upgrading process. Unfortunately, organizations often become so complicated over time that some of the things I've recommended here simply won't work. If companies have tightly drawn "empires," for example, they'll have difficulty transferring executives across divisions. For that reason, a new emphasis on people development often calls for a complete transformation of the work environment.

Consider the ways in which a multilayered organizational structure can impede performance. With broken-up jobs, no one has clear-cut responsibility or a feeling of ownership and as a result, people may sit back and wait for the group to solve problems. It's difficult to assess individual performances. Decision-making mechanisms can be so complicated that people dissipate all their energy simply trying to get a questions answered.

For reasons like these, a slow-moving, bureaucratic environment usually flushes talented people out the door faster than it brings them in. Innovators can't thrive in a highly centralized organization. If you want more original thinking, you have to decentralize responsibility throughout the company and get rid of red tape. Give people the freedom to stick their necks out and to take independent action.

Here are four suggestions for creating a climate conducive to executive development:

1. Keep your organizational structure as simple as possible. With fewer layers, there can be more individual responsibility, less second-guessing, clearer decision-making, and greater accountability.

2. Break down organizational barriers. Emphasize that managers are corporate assets rather than the property of a single division or function.

3. By the same token, formally encourage cross-fertilization. Expose your best managerial prospects to top functional leaders. Some companies conduct reviews where all the senior marketing vice presidents, for example, evaluate prospects for marketing posts. In other corporations, the executives attend personnel reviews in other divisions.

4. Finally, make sure that every unit is rewarding its best achievers appropriately. This may sound obvious, but most businesses do a poor job of relating pay to performance. Sometimes better performers receive larger raises than less promising people (personnel policies or other factors don't always encourage this), but the differences may be so slight that they're de-motivating. Nothing frustrates high-potential people more than hearing a lot of praise and their efforts won't be rewarded accordingly. In the more demanding work environment you're creating by muscle building, its especially important to peg pay to performance.

Create a nucleus of leaders

If you want to make sweeping improvements in your organization, you'll have to bring in fresh talent. The upgrading steps I've described are all crucial, but they take time to implement and bear fruit. An essential ingredient in the process is to bring in several high performers quickly-to fill important posts and to develop a talent pool you can draw on for promotions later.

Simply deciding to look outside the company for the next two or three openings isn't the answer. That's like trying to empty the ocean with a thimble; you'll never get anywhere. You may also be tempted to bring in new talent only at the entry level, especially if your employees tend to make their careers in your company. But are your present managers capable of supervising top performers? I recommend that you introduce new people at the highest levels of your organization and let the upgrading trickle down.

In a large, decentralized enterprise, the best way to start this talent infusion is to hire a group of proven managers without having any particular jobs in mind for them. (In football, this is called drafting for talent, not for position.) Ultimately, these people will be fed into the system as openings occur, but initially they can work directly for you or another senior person on special projects, assuming the role of in-house consultants. They can be assigned to divisions or functions that are in particular need of help, or to new endeavors. The important point is that proficient mangers will be in place (setting an example for others) and learning about your company (preparing for more specific assignments).

Hiring people to serve as general resources may sound like an expensive proposition. But the cost is almost certainly less than you would pay for a consultant to handle the same special projects, and this method promises a significant impact on the upgrading process. Also, a cost conscious CEO can usually eliminate enough low-impact current jobs or managers to pay for the floaters.

Eventually, you'll be able to focus your recruiting at the lower levels of management. Here as elsewhere, you must make the commitment to work consistently and effectively to develop the best staff possible. This goal usually means emphasizing campus recruiting, year after year, at the best schools rather than just hiring people from other companies. It means that recruiting must be a top-management priority.

<continue>