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strategy and business
 / Summer 2010 / Issue 59(originally published by Booz & Company)


Leading Outside the Lines

It’s not an exaggeration to say similar battles still take place among leaders at all levels of organizations. But Ed Carolan’s experience at StockPot — and similar experiences at such companies as Southwest Airlines, the Orpheus Chamber Orchestra, Home Depot, Bell Canada, and Aetna — demonstrate why neither ap­proach should stand alone.

Most businesspeople are concerned with achieving higher levels of performance — and all the rewards that go with it. Those who are comfortable with formal and informal approaches will make the most progress toward this goal. The mind-set that can synthesize both into a clear, simple, integrated direction is the mind-set that differentiates the peak performers from the also-rans — be they individuals, teams, or enterprises.

The Power of Simple Changes
by Ashley Harshak

 One of the largest organizations in the United Kingdom, a provider of services to the general public, had a problem with stagnant performance. To begin turning the situation around, the management team of the organization’s shared-services group (which provided IT and other internal support) chose to focus on a single shared service — a 100-person operation supporting other groups throughout the company. A new director overseeing this service was appointed; she was given the mandate to improve its performance and make it a model for the rest of the organization to emulate.

The director knew that because of a history of unsuccessful change programs, a formal, top-down initiative would not, in itself, get enough support from employees to achieve practical, on-the-ground, and long-lasting results. Through a series of interviews and focus groups, she and her team therefore identified 10 people who were seen as role models in the organization. She recruited them to join a special task force called the Site Advisory Committee.

The director then convened a workshop for the committee members and their direct bosses. The purpose was to identify a small number of specific, simple, replicable behaviors that these role models were already exhibiting almost instinctively, and that were working well. If adopted by others, these behaviors would likely boost performance.

One of them, for example, was to “break down tasks.” This approach had worked effectively once before, when the full shared-services organization had been directed to clear a large backlog of work. Rather than approach it as a major project, one of the managers had broken the work into a series of small tasks that could be addressed in an hour or less each day. The group had gotten rid of the backlog this way, in half the time they had predicted it would take.

Other model behaviors included “give positive feedback” and “stop your own work to help others when they have a problem.” Nothing earth-shattering, to be sure, but these were informally driven, value-adding behaviors that, over the years, had been suppressed in many employees by some of the formal rules and requirements that had become embedded in the organization.

The operations director also asked the Site Advisory Committee to suggest formal changes that this 100-person group could make. They responded, “Well, there’s that measurement thing.” Frontline em­ployees were required to stop work at the end of each hour to report on what they had accomplished in the preceding 60 minutes. The task of recording the activity data, although it yielded useful information, was so disruptive that a job in progress often had to be started from the beginning again. Plus, the recording requirement consumed so much time that employees could not analyze the data they had gathered; it thus had little positive influence on their work.

The director challenged the committee to recommend ways to alter this practice. At first, they were hesitant, unsure if they wanted to shoulder this responsibility. But within a week they came back, brimming with confidence, and offered a simple recommendation: Submit the activity report every other hour, rather than every hour.

With this single minor change, the shared-services unit’s performance improved and productivity increased. The change also had a significant impact on emotions and attitudes. People came to see the activity data measurement as a genuine reflection of their success, rather than as a cold mechanism of control. They took personal interest in how they were doing, even going so far as to call the office after their shift was over to check on the measurements.

It took a combination of informal and formal change — identifying and modeling exemplary behaviors on one hand, and making a small but important shift in how work was measured on the other — to produce these remarkable results. With productivity and morale improved, this 100-person shared-services group did, in fact, become a model for other parts of the organization. As for the task force, it kept going, suggesting other improvements. And as a token of its impact, it changed its name to the Pride Advisory Committee.

  • Ashley Harshak is a London-based partner with Booz & Company associated with the organization, change, and leadership practice and the Katzenbach Center.
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  1. Andrea Gabor, The Capitalist Philosophers: The Geniuses of Modern Business — Their Lives, Times and Ideas (Three Rivers/Crown, 2000): Introduction to business thinkers on the hard (Taylor, McNamara), soft (Maslow, McGregor), and integrated (Deming, Drucker) sides.
  2. Jon R. Katzenbach and Zia Khan, Leading Outside the Lines: How to Mobilize the Informal Organization, Energize Your Team, and Get Better Results (John Wiley & Sons, 2010): More ideas and tools for helping both sides of an organization work together well.
  3. Zia Khan and Jon R. Katzenbach, “Are You Killing Enough Ideas?s+b, Autumn 2009: Making innovation more effective by rethinking your informal and formal practices.
  4. Harold J. Leavitt, Top Down: Why Hierarchies Are Here to Stay and How to Manage Them More Effectively (Harvard Business School Press, 2005): Formal structures exist because they fulfill basic human needs — and thus we’d better learn to manage them humanistically.
  5. Douglas McGregor, The Human Side of Enterprise, Annotated Edition (McGraw-Hill, 2006): The classic on escaping the tyranny of the formal — and reconciling the two sides of the corporate personality.
  6. For more thought leadership on this topic, see the s+b website at:
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