Jim Collins in the News

The New York Times just profiled Jim Collins and his soon to be published book “How the Mighty Fall”. He is no stranger to any one who is a student of management. His ground-breaking books “Built to Last” and “Good to Great* are mandatory reads on most book lists.

The article proved to be a nice afternoon read and a reminder of some pointed weaknesses that we in management are often prone to relax toward. Namely, “organizational empire building” and “creating management complexity”. In the former, creating armies and empires is simply ‘good’ organizational politics. And it leads to “creating management complexity” or “why I have a job” processes and work activities. The latter is more subtle and dangerous to the organization. Instead of creating efficiencies, it creates bureaucratic blackholes, “consensus” decision making, and little Dilbert worlds everywhere.

management complexity

It also contributes mightily to the how company’s fall down or simply fail in the long term. This is like slow corporate death by poison or asphyxiation and is something that managers and leadership simply should not tolerate – at any point. Once you’ve built up this empire, it’s hard to take it apart unless there’s an overriding external factor (like our current economic crisis) that causes the organization to finally take it’s own bitter medicine. But maybe the cancer will prove fatal.

Hence, I really liked this blurb:

This orientation — a willingness to say no and focus on what not to do as much as what to do — stems from a conversation that Mr. Collins had with one of his mentors, the late Peter F. Drucker, the pioneer in social and management theories.

“Do you want to build ideas first and foremost?” he recalls Mr. Drucker asking him, trying to capture his mentor’s Austrian accent. “Zen you must not build a big organization, because zen you will end up managing zat organization.”

Therefore, in Jim Collins’s world, small is beautiful.

Most definitely. Business is better when you can make USD100M with 10 people than USD500M with 1500 people or USD 1B with 10,000 people. Now, perhaps size matters in the corporate world and in the capital markets and hence why I’m not in an meaningful leadership position to cause great shareholder damage…nevertheless, productivity, efficiencies, can allow for excellent corporate profits and provide cubicle monkeys everywhere an enjoyable existence making OPM (Other People’s Money). At the end of the day, management is not about managing organizational complexity – you’re not in the business of creating layers of mid-level managers to manage even more mid-level managers and more organizational chaos and complicated processes to do simple things: make profits, deliver projects, create corporate and social value, provide social growth etc.

Let’s keep organizational bloat to a minimum. As Peter Drucker said in his classic “The Effective Executive“, the following corporate diseases:

    Overstaffing
    There is a fairly reliable symptom of overstaffing. If the senior people in the group…spend more than a small fraction of their time, maybe one tenth, on “problems of human relations,” on feuds and frictions, on jurisdictional disputes and questions of co-operation, and so on, then the work force is almost certainly too large. People get into each other’s way. People have become an impediment to performance, rather than the means thereto. In a lean organization people have room to move without colliding with one another and can do their work without having to explain it all the time.” (pp.43-44)

    Malorganization
    Meetings are by definition a concession to deficient organizations. For one either meets or one works. One cannot do both at the same time. In an ideally designed structure…there would be no meetings. We meet because people holding different jobs have to cooperate to get a specific task done. we meet because the knowledge and experience needed in a specific situation are not available in one head, but have to be pieced together out of the experience and knowledge of several people. (pp 44-46)

I fear that if we don’t do this then we will be fodder for Jim Collin’s “How the Mighty Fall”. Certainly there’s no shortage of exhibits in the recently 18-24 months and counting. And would avoid the unpleasant top-to-bottom reviews of current organizational structures by so many mid-level managers to make the difficult choices before, now, and in the future.

One would pay heed to this cartoon on survival and organizational effectiveness…or simply how complexity kills.

Complexity Kills

Complexity Kills

In case all this doesn’t make sense (trust me, so many people simply do not get it, let alone do it), read Eduardo Castro-Wright’s views on this – In a Word, He Wants Simplicity. Walmart isn’t such a bad example after all.

* See Good to Great’s critique by Business Pundit. I agree with many of his points and I too frankly was let down by the book – I read it as part of my corporate training. It’s just not that vigorous by way of clear thinking. Nevertheless, the book is/can be useful to frame a management’s thinking of common business problems when often management does not think enough. The criticism of Good to Great is a rather nice lead into his appropriately timed next book “How the Mighty Fall”.

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  1. May 25, 2009 at 12:24 AM

    Lui,

    interesting post and I love the “Complexity Kills” cartoon. Where did you find it? We’re actually doing a process definition project at a company and I think I’m going to put that cartoon on the cover.

    As far as Jim Collins’ book(s) are concerned, I guess one should read them, they contain good ideas, but I’m not sure how much they have to do with the real world of business. Phil Rosenzweig’s “The Halo Effect” pretty much skewered the book.

    The two books are interesting to read as counter-balances to each other. They both offer insights. Unfortunately, I read “The Halo Effect” before I read “Good to Great”, so my interpretation is very skewed.

    There’s another issue I’d be interested to get your perspective on. The agency question of complexity. From the companies perspective, simplicity is almost always the way to go. From the employee who wants to remain employed’s perspective, a little opaqueness adds a lot of security. Those two elements are pretty well recognized, but I’d like to add a third. Many executives also play the filtering information game upwards and downwards. Some of this is necessary, some of it is not.

    At the very least, there are three perspectives. The companies, the employees and the executives. The larger the company, the more perspectives there are and the more subtly their power effects complexity and what it makes more or less obvious.

    Don’t you think?

    Andy

  2. May 25, 2009 at 3:26 PM

    Hi Andy,

    Thanks for the insightful comments. You have a very good point on the dimensional complexities that will affect any company/organization. I agree with you that there are subtle yet powerful factors involved which can “make or break” an organization/company.

    Information opagueness is one factor that creates a lot of complexity. Continued management vigilance and discipline is a guard against this. This to me is part of the “manager’s job”. Manager’s who fail to do this aren’t effective nor “KISS” and should be removed.

    Cheers,

  3. May 27, 2009 at 8:37 AM

    Hi Lui Sieh

    Excellent article. I am gonna get “How the might fall” this weekend!

    I always like the idea of a lean and mean organization. I believe that a simple organization surfaces all the flaws in business since there is nothing there to hide the inefficiencies and the ineffectiveness.

    People builds empire in the organization because of mistrust and also to grow root so that they won’t be easily displaced. As I mentioned in my previous article http://www.vincechew.com/2009/04/accelerate-growth-by-make-yourself-redundant/ , a good employee or service provider must be committed to make him/herself redundant. Only then can you add value the organization and yourself.

    Having a large organization in order to increase the number of perspective is not the way to go. There are many ways to gain multitudes of insights. Crowdsourcing is a good way where companies can throw up a questions to the public and get their opinion on how certain products should be made, etc. Dell and Starbucks do a great job in implementing customers’ wishes (or at least they show their enthusiasm and did get some ideas implemented).

    Oursourcing is another option to get more brains in fast. http://www.vincechew.com/2009/05/sensible-outsourcing/
    http://www.vincechew.com/2009/04/dont-be-doomed-by-outsourcing/

    Though all these options must be taken in from the strategic perspective and not as a quick fix.

  4. May 28, 2009 at 3:54 PM

    Hi Vince,

    Thanks for chiming in with your views. I share your fondness for lean and mean organizations and the view that employees need to strive to being redundant in order to demonstrate value. Organizationally, the ability of employees to perform so well that they need to move on to bigger and better things is one of the responsibilities of any manager/leader. It’s important to keep the organization at peak levels with motivated and engaged people who are also adaptable to change.

    Many thanks,

  5. May 29, 2009 at 8:22 AM

    Hi Andrew,

    Just on your points raised, there are interesting tangents related to it that was recently blogged. Check out Motivation, Power, and Self Interest by Mike Chitty over at Progressive Manager’s Network and Musings About Motivation from Slow Leadership.

    At a certain level, information sharing (or lack of) stems from conscious choices. Perhaps it’s too cynical…this “information game”, but it seems those who are less interested in results are more prone to engage in it – hence the need to look into motivational factors etc.

    To my blog readers, both blogs are excellent and would recommend it as a frequent read.

    Cheers,

  6. May 29, 2009 at 11:40 AM

    Great post Lui. I have to pick up some books this weekend. I will add Collin’s to my list. I agree that empire building leads to inefficiencies. I have seen it all too often. Especially in foreign banks where bureaucracies are standard management practice. I built my IT department on speed and quality of service. I didn’t need a huge staff to accomplish this. I just needed good people. I was successful in doing and my group became a model for how other groups (IT and non IT) should operate.

  7. May 29, 2009 at 6:34 PM

    Lui,

    thanks. The links are interesting and there are definitely differing perspectives. Machievellie wrote the manual on how those who have power should keep it in “The Prince”. Saul Alinsky wrote manual for how those who do not have power should change the world in “Rules for Radicals” (http://en.wikipedia.org/wiki/Rules_for_Radicals).

    Those two books are interesting counter balances to each other and are extensions of your post and what Mike Chitty and slow Leadership are talking about.

    Interesting footnote: Saul Alinsky created the “Community Organizer”, grass roots network that Barrak Obama worked in, learned, taught and leveraged in his campaign. Interestingly enough, Alinsky also knew Hillary Clinton and knew her well enough that he offered her a job.

    One of the reasons Alinsky is relevant to those who work in middle-management is that Alinsky always reminded people that it was not the poor who are taken advantage of, rather it is the middle class. Likewise, it is not the entry-level worker who should have concerns, but rather middle-management. They are the real target.

    All my best,

    Andy

  8. June 8, 2009 at 2:29 AM

    Dear readers,

    Please check out BusinessWeek’s article by Jim Collins, How the Mighty Fall: A Primer on the Warning Signs.

    Thanks,

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