August 21, 2009

Taking the Politics out of Enterprise Decision Making

Some people say power is primarily exerted through military might (“hard power”), others says it is through use of diplomacy—communications, economic assistance, and investing in the global good (“soft power”). Then, there is a new concept of employing the optimal mix of military might and diplomacy (“smart power”).

It’s interesting to me how the Department of Defense—military approach—and the Department of State—diplomatic approach—is as much alive and well in our enterprises as it is in the sphere of world politics to get what we want.

At work, for example, people vie—some more diplomatically and some more belligerently—for resources and influence to advance their agendas, programs, projects, and people. This is symptomatic of the organizational and functional silos that continue to predominate in our organizations. And as in the world of politics, there are often winners and losers, rather than winners and winners. Those who are the “experts” in the arts of diplomacy and war (i.e. in getting what they want) get the spoils, but often at the expense of what may be good for the organization as a whole.

Instead of power politics (hard, soft, or smart), organizations need to move to more deliberate, structured, and objective governance mechanisms. Good governance is defined more by quantifiable measures than by qualitative conjecture. Sound governance is driven by return on investment, risk mitigation, strategic business alignment, and technical compliance rather than I need, want, like, feel, and so forth. Facts need to rule over fiction. Governance should not be a game of power politics.

Henry Mintzberg, the well-known management scholar, identified three mechanisms for managers to exert influence in the organization (Wall Street Journal, 17 August 2009):

1. Managing action—“managers manage actions directly. They fight fires. They manage projects. They negotiate contracts.” They get things done.

2. Managing people—“managers deal with people who take the action, so thy motivate them and they build teams and they enhance the culture and train them and do things to get people to take more effective actions.”

3. Managing information—“managers manage information to drive people to tale action—through budgets and objectives and delegating tasks and designing organization structure.”

It is in the third item—managing information—that we have the choice of building sincere business cases and creating a genuine call to action or to devolve into power politics, exerting hard, soft, and smart influence to get what we want, when we want it, and how we want it.

When information is managed through the exertion of power, it can be skewed and distorted. Information can be manipulated, exaggerated, or even buried. Therefore, it is imperative to build governance mechanisms that set a level playing field for capturing, creating, calculating, and complying with a set of objective parameters that can be analyzed and evaluated in more absolute terms.

When we can develop decision support systems and governance mechanisms that take the gut, intuition, politics, and subjective management whim out of the process, we will make better and more productive decisions for the enterprise.


1 comment:

David Wright said...

Functional silos fight when the bonus for a silo senior manager is based on the results measured for that silo.

If a company is going to incent its people, from top to bottom, it has to be based on the results for the whole company. Sure, the higher you are, the more you get, but it is the same amount for anyone at the same level.

Smart companies are doing this already; witness the wreckage on Wall Street of those that didn't.