Why Do Leaders Get Their Timing Wrong?

 
 
SUMMING UP: Is good management timing primarily a function of strategy or culture? James Heskett's readers add their opinions. What do YOU think?
 
 
by James Heskett

Summing Up

Is Good Timing in Management Primarily a Function of Strategy or Culture?

Timing in executing change is an important responsibility of leadership. Responses to this month’s column suggest that if timing is the result of one person’s judgment, that judgment is shaped by the organization’s long-term strategy and culture.

David Wittenberg led the way in making the argument for an inadequate strategy as a primary cause of the problem. He suggested that bad timing is related to a lack of “strategic frameworks to assess the likely consequences of a move at any point.” Dan Wallace elaborated on this idea: "All you can do is be clear about your long-term direction, make decisions with that direction in mind, monitor results, and make changes or adjustments when you’re not getting the results you expect.”

Wittenberg then went on to suggest that “To counterbalance most leaders’ bias toward short-term results, as well as any hubris on their part, and to discover blind spots, top management should cultivate and rely on its strategy team, including employees, board members and consultants, to reduce the chance of failure.”

By way of contrast, Wallace put his finger primarily on organization culture as the culprit. He identified a dysfunctional culture as a cause of poor timing, one that magnifies a “confirmation bias that causes companies to stick with obsolete or weak strategies ... far too long.” Subrata Chakraborty suggested another shortcoming of culture. “It is not our ability to act that delays decisions. It is our ability to learn …” Edward advanced the notion that "too many (leaders) are blissfully out of touch with what really goes on in business … maybe because they are slaves to the P&L …”

Antidotes to a culture that fosters poor timing were also suggested. They included such things as Fizzinnf’s suggestion that we merely ask employees whether their needs are being met, a factor contributing to a leader’s “exercise of judgment and discretion.” Mauro Ghilardi commented that “The ability of organizations to determine whether they have a speak up culture rather than the one described at Volkswagen” can be enhanced by the use of modern day “technology companies use (including employee surveys, polls, etc.)” combined with leadership’s use of the evidence it produces. As to culture, Wallace advised leaders to identify a core set of values that include openness and honesty. "Live them rigorously, and fire people who won’t, regardless of level, role or title.”

Clearly, both dysfunctional strategies and cultures can help explain poor timing in implementing plans and decisions. But is good timing in management primarily a function of strategy or culture? What do you think?

Original Column

Two pieces of news that hit the business press in recent weeks illustrate situations in which leadership timing has been called into question.

The first concerns Volkswagen’s notorious, apparently conscious effort to design diesel vehicles that averted pollution laws in many countries over a ten-year period. The second involves Zappos’ sudden initiative to eliminate all but one manager, the CEO.

The two examples share at least one thing in common: they both involve changing organizational culture. In Volkswagen’s case, it can be argued that culture change came too late. At Zappos, some believe that the change came too early or was even unnecessary. The two cases illustrate challenges that leaders face in getting the timing of their decisions right.

How could the problem of cheating been averted at Volkswagen? In retrospect, it seems clear. But when viewed in retrospect, many things seem clearer than they did at the time of decision. The culture at Volkswagen has been described as “confident, cutthroat, and insular … one in which subordinates were fearful of contradicting their superiors and were afraid to admit failure.” Deviant behaviors either were not reported or, if they were, not communicated up the line.

Under these practices, top management’s claims that it was unaware of what was happening may be believable. But were there other, more obvious signs of deeper problems with the company’s culture? According to one report, all employees’ autos were required to be parked in the same direction, apparently with exhausts pointed away from the plant so as to limit pollution damage to the building. There is no report of complaints or questions. While incidental, shouldn’t that kind of thing have raised questions with an objective observer?

At Zappos, CEO Tony Hsieh became enamored with several concepts around the innovative idea of replacing managers (except himself) with “circles,” some 300 groups of self-selected employees assigned to make decisions associated with various tasks. Circles operate under rigid rules designed to facilitate effort while encouraging every employee to contribute. The effort of each employee and circle is tracked by means of proprietary software. The notion was introduced in March of last year, receiving a relatively cold reception but made mandatory.

One problem was that the company was performing well, at least on measures available to the public. (As a subsidiary of Amazon, Zappos no longer reports separate financials.) It is one of only 12 American companies that win awards both for its customer service and the quality of its workplace. At least it was. Employees were comfortable with the status quo. Why change, particularly if a person had a good management job?

When offered the opportunity to participate in this initiative, about 14 percent of Zappos’ employees, many of them managers who saw themselves losing their jobs, decided to leave. Those who stayed are trying to figure out how to make circles function, how to cut down on seemingly endless meetings, how to evaluate work, and how to compensate associates. In the case of Zappos, people are asking whether Hsieh, sensing a growing bureaucratic mentality before anyone else, moved too early and too fast, failing adequately to make the case for change?

What is too early or too late? How does a leader determine the timing of the most important decisions for his or her organization? Jim Collins has suggested, for example, that “any deterioration in gross margins, current ratio, or debt-to-equity ratio indicates an impending storm.” But aren’t financials so-called lagging indicators, the last to show the need for change? What are examples of indicators that leaders should be watching? Are they being tracked? If not, why not? How do we as employees, customers, and investors know? Why do leaders get their timing wrong? What could they do to avoid it? What do you think?

To Read More:

Jim Collins, How the Mighty Fall and How Some Companies Never Give In (New York: HarperCollins, 2009), p. 76.

Jack Ewing and Graham Bowley, Volkswagen Sowed Seeds Of Forceful Ambition, The New York Times, December 14, 2015, pp. B1 and B7.

David Gelles, Pushing Shoes and a Vision, The New York Times, July 19, 2015, pp. B1, 6, and 7.

Roger D. Hodge, First, Let’s Get Rid of All the Bosses, The New Republic, November, 2015, pp. 27-39.

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