Strategy and the Fat Smoker, asking ‘are we in this together’? I’m referring to it now as it came back to my mind after reading the recent IES report on fairness and rewards.
Maister stresses (mainly for professional services firms) that the need for people to want to achieve something together is a prerequisite for effective strategy. But the situation is actually fairly scarce and leaders shouldn’t assume that people are ready and willing to work together to get things done.
Maister uses two dimensions of personality / belief: team, and time orientation, to show that most organisations have high levels of ‘biodiversity’. I’d suggest this diversity of preferences is even greater if you look at other traits and attributes as well. This is an important issue for organisations and Maister states: “Whereas there may be some logic and merit in like minded people being together, an organisation made up of an unmanageable mix of types is unlikely to function well.”
Two main approaches (other than spltting up or covering it up) are suggested to deal with this problems:
- Try to accommodate differences: this is OK across but harder to do within individual groups
- Work to change peoples’ orientation by crafting a sufficiently compelling vision – but this still isn’t going to be possible if there is a sizeable fixed component in peoples’ different attitudes.
(This presents an interesting challenges for banks trying to change their compensation systems to focus on long-term success. As Maister notes, “It is really possible to get short-term individuals to do the right thing for companies’ long-term best interests through persuasion or systems? – to set individual goals that will further corporate goals?”)
Maister points out that none of these approaches are very effective, so actually organisations need to look at how they create an organisation of people that have fairly homogeneous attitudes (at least to the things that enable them to work together to support the organisation as a whole) which he also calls the one-firm firm.
I think Maister makes some good points, although I’d also emphasise that organisations need a fair degree of biodiversity for effective innovation and decision making. But I do agree that some degree of commonality around critical factors (eg around whatever is the relevant organisational capability) is required if organisations are going to operate as ‘one church’ in the way that Duncan Brown at the IES describes. So becoming more inclusive needs a bigger focus than just reward strategy (doesn’t everything).