BUSINESS STRATEGY
OPEN CONVERSATIONS
Inclusive conversations solve critical issues by Jayashantha Jayawardhana
In July 2000, the Vice President and General Manager of Agilent Technologies’ Systems Generation and Delivery Unit (SGDU) Lynne Camp was assigned the task of building a single global company out of a set of fragmented businesses across Asia, Europe and the US.
By adopting a functional organisational structure and grouping people into departments based on their specific job functions, Camp and her senior team sought to secure control over the product decisions made by regional teams under her charge.
If this had been successfully implemented, it would have enabled the exit out of numerous marginal local businesses with a focus on the opportunities that were most promising from a global perspective; it would also have introduced more efficient shared processes.
In an article titled ‘How to Have an Honest Conversation about your Business Strategy’ in the Harvard Business Review (HBR), Michael Beer and Russell Eisenstat say that “despite these strengths of the new structure, problems began to emerge.”
“The functional departments didn’t give the new businesses the attention they needed. Staff in the regional field organisations were in a funk; they thought their customer perspective was being overlooked,” they add.
Beer and Eisenstat continue: “Conflict between the functions, businesses and the field organisations was growing. The senior team was slow to make decisions and no one took responsibility for the performance of developing businesses.”
Camp proposed switching to a matrix organisational structure in a bid to step up accountability and accelerate decision making. However, members of her team strongly disagreed. Even if Camp could have imposed her will, she knew she would need to have the senior team’s full commitment to make this complex global structure work. She needed to find a different way out of the crisis.
As she sought an approach that would accelerate change at SGDU, Camp began to suspect that people throughout the unit were talking about its strategy and that a good number of managers had insights that she needed to hear. But these conversations mainly happened behind closed doors.
It goes without saying that private conversations by their nature can do very little to mobilise an organisation to bridge the gaps between its business strategy and structure, capabilities and the market realities it confronts.
And it’s well known that any executive who seeks to implement major structural changes is likely to wrestle with the same lack of candour and openness.
If change was forced, the impact would be shallow, inadequate and even short-lived in the best case scenario. In the worst case scenario, it’s also possible that workers could rebel – and this would result in corporate chaos.
To bring about profound and enduring strategic changes, leaders must summon the courage to uncover deep flaws and face the brutal, unvarnished truths about their organisations.
Beer and Eisenstat observe: “Typically, this involves looking closely at the roles and decision rights of various parts of the business, as well as changing the behaviour of people at all levels. Public organisation wide conversations about such fundamental issues are difficult and likely to be painful.”
“But pain contributes to a species survival by triggering learning and adaptation. It can have the same effect on enterprises too. Businesses and their employees don’t learn to change unless they have the courage to confront difficult truths,” they assert.
The authors spell out a few prerequisites for an organisation to have an honest conversation about its strategy. A discussion about strategy needs to move back and forth, between advocacy and inquiry. It can’t be a one-way street where leaders advocate and impose changes without considering how they affect their people.
Leaders need to advocate, then inquire and repeat as required. And this conversation must be focussed on the most important issues facing the organisation without becoming swamped by the operational minutiae.
Realigning an organisation with a new strategic direction almost always calls for concurrently changing the worldview and behaviour of a whole set of interdependent players – such as the CEO, senior leadership team and managers down the line. Essentially, the dialogue should engage the entire organisation.
It’s necessary to allow employees to be honest without risking their jobs. In most companies, managers talk about strategic problems with one or two people whom they confide in but pull their punches in more public settings. Everyone in the company must be convinced that speaking the truth won’t hurt their jobs or growth prospects.
Being honest doesn’t have to be spontaneous. There should be a studied and structured conversation about serious matters in the organisation.
