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 / Winter 2010 / Issue 61(originally published by Booz & Company)


Best Business Books 2010: Management

These models may seem simplistic, but they do describe the management behavior of many companies, as well as reveal the traps they can fall into when they follow the models blindly. For Birkinshaw, the key to managerial effectiveness is for leaders to learn when changes to an organization’s management model are necessary by identifying and analyzing the “blockers” that prevent people from doing their work, designing new methods for replacing or removing those blockers, and then experimenting with these methods.

The merit of Birkinshaw’s approach is that it identifies the organizational context in which management models are practiced. By representing these models as decisions made by top management, however, Birkinshaw firmly places himself within the rational-choice approach of the academic world, stressing the “what” of corporate direction rather than the “how” of execution (and human involvement). His model is not a dynamic one: The pervasive use of two-by-two matrices tends to freeze everything, making the resulting choices look more like calculated trade-offs than creative integrations. Perhaps these are the starting positions of a dance between the polarities he identifies, with the steps and tempo yet to come.

Some clues to the steps and tempo can be found in Leading Outside the Lines: How to Mobilize the (In)Formal Organization, Energize Your Team, and Get Better Results, by Jon R. Katzenbach, a senior partner at Booz & Company, which publishes strategy+business, and Zia Khan, vice president for strategy and evaluation at the Rockefeller Foundation. They take a much more fine-grained approach to managing that is based on finding the right combination of the “logic of the formal” and the “magic of the informal.”

In the three-part book, the authors focus on how individual managers can use informal connections and conversations to enhance the formal incentives and structures of a company — and, in the process, motivate individual performance and mobilize organizational change. Managers who can draw on both the formal and the informal as required have a high “organizational quotient” (OQ). This is a combination of intelligence quotient (IQ) and emotional intelligence (EQ) that balances disciplined and spontaneous actions, and rational and emotional thinking, depending on the demands of the situation.

The objective is consilience, which literally means a jumping together of the formal and the informal, a creative integration of “both...and” that harks back to Mary Parker Follett, the early-20th-century pioneer of organizational theory. This is the first of several evocative metaphors that the authors use to describe one of the most desirable but elusive phenomena in organizational life — those times when decisions, actions, and emotions jibe with strategic intent, when dynamic routines are constantly being improved upon, when employees are proud of their company, and when the company as well as the members of its ecosystem (partners, suppliers, and customers) all succeed.

Katzenbach and Khan stress that a managerial focus on the informal is not just a matter of being nice. People work and perform much better when they are treated with care and respect as individuals. The challenge for managers is how to accomplish this within the constraints and abstractions of a formal system that is designed to achieve scale by treating everything and everyone in the same way. Part of the solution, according to the authors, is to connect corporate values to work using stories and customers at the local level.

It is the managers’ behaviors that matter most, but these are effective only if all the elements of the formal system enable the employee behaviors that managers are trying to encourage. Thus, for example, metrics should not be consumed purely by the upper levels of the hierarchy, or used only to judge performance against goals handed down from above. They should also serve as feedback signals for those responsible for doing the work; they should be crafted accordingly and understood in the context of everyday goals and priorities.

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