Why are managers outsourcing their core function?

I am thinking a lot about what managers do and should be doing. Mainly because I have undertaken to help a major national authority to structure its demands on management training dependent on levels of work. Since we all started talking about the knowledge economy I have been trying to get my head around how that will change the work of management.

Some years ago my wife and I wrote a long article about our experiences as leaders of leaders in a major volunteer organization. Our hypothesis was that knowledge workers are somewhat like volunteers – if they don not like it any longer, they leave quickly. I have started translating the article into English, it will be a slow job as I will be wanting to rewrite it at the same time.

I had great expectations when I started reading Gary Hamels latest book on the Future of Management. I was sorely disappointed, more on that in a forthcoming review. At the end he writes that the only acceptable hierarchies are the natural ones, but not a word about what a natural hierarchy is.

Since I work with Levels of Work / Requisite Organization / Stratified Systems Theory I have very definite opinions about what constitutes a natural hierarchy. When considering the new work of management we need to consider hierarchies, accountabilities, management span, allowing discretion etc. We need to move away from traditional command and control to something else.

Most managers have been brought up in command and control organizations, so they know that stuff. But over the years the work of management has changed and managers have brought in consultants to help them. My hypothesis is that what managers bring in consultants to do is the new work of management. In other words they are outsourcing their new core work.

When working with the National Authoritys demands on management training I am realizing that managers need to be trained to do what they use consultants to do for them.

Many years ago British Gas compared what their higher managers needed in the way of training and what the major institutes were offering. It was a great disappointment as the institutes were delivering at lower managerial levels than they were selling to. That still seems to be the case.

So what the heck is strategy anyway?

I often feel exasperated over the multitude of definitions of what strategy is. My colleague Martin just defined Strategy as that which we afterwards know was successful. Just look at all these books on Strategy, particularly among the business books at the airport. Broadly they fall into two categories, templates or methods to follow or success stories which imply that you should emulate them for success.

The most dramatic personae in the field is probably Gary Hamel, with his battle cry ”If it isn’t revolution, then it isn’t strategy”. The word strategy seems to be used for anything between that extreme position of uniqueness to the more mundane ”what is our strategy for buying a new photocopier?”. I usually claim that there are at least as many definitions of what strategy is as there are academics and consultants in the field.

Is strategy an organisation or a person thing? Organisations seem to do strategy in some sort of strategic planning process. But as Henry Mintzberg points out in the Rise and Fall of Strategic Planning, it is possible, or even usual, to go through a strategic planning ”process”, without strategy actually emerging. Mintzberg focuses on how Strategic Thought emerges.

What do we want to achieve by having strategies? Creating meaning for employees? Creating new direction? Revolutionising business? Surviving? Ensuring long-term viability? Risk minimisation? Starting something entirely new?

In one of his books Tom Peters tells about Bob Eaton, when he stepped in as CEO of Chrysler. At a meeting with many managers he read newspaper cuttings about the bad times Chrysler was in. Everybody thought they were about the present. Bob Eaton read out the dates, and they were about ten years apart. He then said that his job was to ensure that the same situation did not occur after another ten years.

It did not turn out that way, but he was probably right. I use Requisite Organisation Theory, also known as Stratified Systems Theory to understand the difference in work at different levels of the organisation. One of the differences has to do with time consequence. The job of Bob Eaton was to build the structure and set stuff in motion so that the company would be successful and profitable in ten years.

If we want to call that job Strategy, so be it.

What we do know is:

  • There is no way of being certain of the outcome in ten years time, so handling uncertainty comes into it.
  • Strategy probably has to do with being able to manoeuvre through unexpected change.
  • Most probably there is a significant difference between the present state of operations and that which will be in place in 10 years. So whatever needs to be done has to be built on the existing in some sort of mix between bottom-up planning and top-down strategy/vision.
  • Some sort of balance between risk-minimisation and maximum opportunity utilisation needs to be found.
  • Strategy has different meaning for a start-up and an industrial giant with a huge investment in plants.

All these personality tests

I absolutely refuse to be one of 16 personality types. Probably my reluctance to pigeonholing people began at engineering high school, where we introduced to Kretschmers typology. There were two types of people leptosomic who were physically thin and weak with a introvert and timid disposition. The pyknik was round, happy and easygoing. Looking around at the +200 attending the psychology lectures I had my doubts that we could be sorted into two groups, if we could be classified at all.

As a management consultant I sometimes feel the need to know a bit about different personality tests. I keep reading that personality changes very little during lifetime. So various tests should be fairly consistent. But are they really?

I recently bought the Personality Code and completed the test on the web. The IDisc personality types, like Myers Briggs and all the rest of them can be very interesting and to some extent revealing. But whenever I do tests like these, my scoring gets stuck inbetween subtypes and a marginal tilt to one side declares my as being such-and-such personality.

IDisc declares that I am a Detective, but like astrology columns half of the descriptions fit extremely well, but not the rest. And there are 4-5 other personality types that I think fits as well.
And then what? Now that I ”know” that I am a Detective, what do I do with the rest of my life?

Many years ago I did Myers-Briggs and the closely related Kiersey test. They use the same scales, but label the results differently. According to MB I am Introverted iNtuitive Thinking Perceiving. Had I been in a slightly different mood that day I probably could have been Extraverted iNtuitive Thinking Judging, as there was only one point tilting me to one category on two of the scales. Kiersey labels INTP as an idealist.

To some extent I guess that the Detective is closely related to Introverted iNtuitive Thinking Perceiving, but Idealist? At least all these tests are fairly straightforward and categorical. I am such-and-such a type. This summer I completed the Spiral Dynamics CultureScan and got a brief and very hard to understand report. I am Yellow, New Alpha, Systemic Flow, Transitional, 2nd Order Change Preference and Moderately Analog. Above all I need a 16 page handbook to decipher who I am.

I am glad that I have had supervision and therapy by some very good psychologists. I feel quite familiar with who I am and quite satisfied with who I am. I consider my personality (and those of others), as very complex and which cannot be satisfactorily revealed by a 15 minute test. But then of course this is an attitude which would be very typical of a Detective.

One of the most important strategy books of the decade

”The Strategy Paradox” is one of the most interesting books on strategy for about 10 years. I have worked with strategy and planning issues in a managerial role with large international companies and as a consultant. I plow through reams of books every year. Most of them disappointing with the occasional nugget hidden in an overflow of business speak muzak. Many have tales about how the CEO made an early commitment to what turned out to be a successful strategy. Rarely a word about the corpses, of failed commitments, in the ditches along the road.

In ”The Rise and Fall of Strategic Planning” Mintzberg virtually demolished the concept of strategic planning, stating that strategic thought, does not necessarily occur in a planning process. He also stated that most CEO stories on how they and their company successfully achieved their strategies are flawed as they are written with hindsight and does not show how strategic thought developed.

Raynors book ain’t your standard recipe book on how to create instant strategies. For those who seek instant gratification on how to find the great strategy and how to commit and persevere, this is not the right book.

Edison is quoted as saying “Opportunity is missed by most people because it is dressed in overalls, and looks like work.”. Unfortunately he is right. Raynors main point is how to cope with uncertainty and the multitude of possible outcomes. Instead of stubbornly committing to one set of strategies, win or lose, he suggests working more by handling a portfolio of strategic options.

After Shell’s success with scenario planning in the 70’s many have tried to emulate the method. Several failed as they picked the scenario that they liked best and did not bother about the rest. Raynor positions options theory as what to do when you have done the scenarios. Shell used scenarios to build general awareness among managers about multiple future directions. Raynor suggests building strategies around each scenario and treating them as options to “cash in”, as appropriate futures emerges.

I often think that “uncertainty” seems like a dirty word in our hero worship, macho, management culture. Strong commitment and focus on “execution” is what counts. Raynor suggests that the higher corporate management have to cope with uncertainty in time perspectives of 5-20 years. It is their job to make sure that the company is viable in that time frame.

Handling long time uncertainty does in no way clash with commitment in time frames shorter than 3-5 years. Raynor points out that if each level in the organization does their work, then divisions and operational units will have more flexibility in how to succeed with their commitments than if corporate HQ keep detailed control all the time.

Raynor attempts to move “uncertainty” from something abhorrent to being what corporate management actually should be working with. He gives a framework for how to position useful methods in doing this. His book is definitely one of my best reads for a long time.

My rating:
5 stars

Harnessing your networks

Just back from listening to Ivan Misner, founder of BNI, author of many books on networking. He says that his advice is all common sense, but unfortunately common sense in uncommon in reality. His advice:

  • Diversify your networks. Belong to and participate in several different kinds of networks, both professional and private. We usually cluster with people who are like ourselves, reducing our outreach. If we only start conversing with people who we believe will contribute with new business, we will not get much.
  • Determine your contact spheres. Which clusters do you move in? Make yourself a systematic overview.
  • Discover incentives for giving you referrals. Find and maintain touch points – how do you stay in contact with people you know, keep in touch, thank for referrals …
  • Work your network. Santa Claus, the Easter bunny and six degrees of separation are all urban myths. Of the successful degrees of separation experiments people got in touch through 4-5 intermediaries. But over 70% never got in contact. The difference lies in how we work on and maintain our networks.
  • Developing relations. Networking is more about farming than hunting. It is not what you know. It is not who you know. It is about how you know them. The relation moves through three steps: Visibility -> Credibility ->Profitability. You would probably never give your house key to a total stranger. Neither would you hand the key to one of your most important customers to a stranger. It is all about trust.

Can’t wait to get his books!