Management
processes are developed over time to facilitate, enable and ensure success.
Organizations create departments around functions and identify managers to lead.
Organizations are also corporations with departments, all headed by CEOs as
singular leaders conducting corporate management in the quest for success.
Organizational practice, over time, also got concerned about vesting singular
powers in individual managers and leaders, and has tried to use departments as
mutually critical of each other while requiring them to be collaborative. Individual managers and leaders are trusted
to deliver through such singular power or face consequences later (Google Nest
is a recent example). Concerns are delayed recognition of failures has led to
organizations being layered vertically and horizontally with departments that
oversee each other.
The zig-saw
puzzle of ‘trust and verify’ is reflected in several organizational structures.
Production produces but Production Planning counts while Quality verifies. Accounting
records and Finance tallies. Internal audit checks veracity of all these
processes. This has been the traditional structure. It has not stopped some
business failures and occasional malfeasance. Investors and regulators became
concerned, and new departments such as compliance, risk management and ethics
came into organizational mainstream. There is another dimension too. In early
days, all departments used to be consolidated into just two broad divisions:
technical and commercial. Over time, not merely due to increasing scale but
also due to avoid departmental cartelization, every department (almost) started
getting a C suite officer. Despite all this, looking at the broad range of
business failures one would wonder if the management processes, as they have
evolved, provide an infallible solution.
Which two?
The efforts to
find the right balance continued to extend, and that too to the higher levels
of organizations. The Chief Executive Officer (CEO) or Managing Director (MD)
is required to hive off day to day operational responsibility to the Chief
Operating Officer (COO). The roles of Chairman and MD are now expected to be
different. MD and CEO are expected to operate under the superintendence and
guidance of a board of directors with diversity of experience. The Board itself
is divided into independent (non-whole-time) directors and non-independent (whole-time)
directors, independence being related to material pecuniary relationship with
the company of a director over a sufficiently long period of time. In further
addition, the Chief Financial Officer (CFO) is expected to report also to the
Board. An audit committee of select directors of the Board acts as an
independent reviewer of accounts, interacting with external and internal
auditors. And, there exist other board committees for investments, risk,
compliance, and so on.
The audit
committee also acts the ultimate stop for the whistle blowing mechanism in the
company and as an ombudsman of sorts. There are many further nuances, both from
regulatory and company perspectives, which are expected to support the endless
divisions and superintendence. All these mechanisms expect remediation to be
carried out only by the CEO and the other C suite officers who alone have the
day to day knowledge and execution capability. The audit committee and the
board may go through all the internal audit recommendations but will only have
to look at the CFO and CEO to implement the remediation plan. In battles
between heads of production and purchase, production and sales, finance and all
other departments, only those respective departments have to implement
corrective processes. All this discussion leads us to wonder if different
functions, departments or responsibilities that are headed individually are the
solution (or the problem?) and something else is the problem (or solution?).
Root cause
The root cause
for bad performance is usually bad decision or bad execution, or both. Without
addressing the root cause for bad performance mere structural redefinition
would not help. Better processes do help to an extent but essentially,
individuals need to be better at decision making and execution. There is one
reason other than leadership skills as to why leaders do make bad decisions or
do turn bad at execution. That reason is that leaders are also human! We may
aim to achieve precise and clinical leadership through various efforts of
leadership development. However, leaders as humans are subject to pressures,
internal and external as well as biases, internal and external. While it is
part of leadership skill set to be confident and objective (which should
address issues of pressure and bias, respectively) it is indeed humanly
impossible to be extraordinarily virtuous. It is, therefore not uncommon to see
even seasoned leaders wilt under pressures of the Street or get mesmerised by
their own pet ideas.
When the issue
is within the native profile of human behaviour, there is only a limited
alleviation that organizational structures and processes can offer to offset
the impact of pressures and biases; particularly when such structures are in
the nature of dividing responsibilities, and reviewing decisions and actions sequentially.
The key here is that the primary
decision or execution is singular by an individual; so is the secondary review
of decision or execution. Though review by a board is plural it is also a
post-facto delayed quarterly review of singular decisions or actions. It is
important to enable challenges, debates and superior outcomes in decisions and
actions. This cannot be achieved just through a discussion between the boss and
his subordinates as the former eventually displays positional power and the
latter eventually succumb to career growth issues. This cannot be through peer
level discussions either as peer groups tend to eventually “live and let live” rather
than aim at the best outcome.
Two minds
It is often
said, “Two minds are better than one”. In fact, the concept of synergy lies in
being “One plus One becoming Three, rather than an arithmetical Two”. The first
is a typically social adage that implies that two minds can bring to the table
viewpoints that would not be obvious to just one person. The second is a
typically corporate adage implying that when two minds get together some sort
of catalysis takes place. There is a saying related to individual experience
that plays spoilsport though: “I am in two minds”! In corporate setting,
indecisiveness is frowned upon. This has been one evolutionary reason why
singular authority has been encouraged in all organizations. As we have seen in
the earlier sections, this concentration of power has the potential to lead to inappropriate
decision making or execution. A bold new experiment could be to have two
leaders responsible for a single function. For example, key functions such as
Finance, Operations and Commercial could have two equally titled top executives
lead each of them. All decisions could be taken and executed only by the two
together.
The rationale
for two minds taking one decision or supervising one execution is clear: two
minds are better than one, especially when the function is too complex to
decipher or when multiple solutions require multiple viewpoints. Having two
equally endowed executives enables each of them to overcome their pressures and
biases through the critical thinking of others. Having another powerful
co-sharer of decision making and execution enables the two member team take
bold decisions which each individually would not probably be taking. There are,
of course, risks that the two leaders could form a conveniently colluding
cartel rather than critically thinking team. As long as this two member team
concept is not limited to just one function but covers a few other important
functions besides the CEO role itself, the risks of such cartelisation would be
low. There would be higher costs associated with the concept but can be
overcome with greater infallibility and greater value building through such pooling
of strengths.
Left and right
The general
approach in a Twin Leader deployment could be to select them based on
complementary domain skills. For example, of the two to head the commercial
function, one could be a sales oriented leader and another a marketing oriented
leader. Of the two, heading the finance function, one could be a growth
oriented fund raiser and another precision oriented cost accountant. In the
operations domain, one could be a production expert and another quality expert.
At the level of CEO itself, one could be conceptual and another analytical or
one could be thinker and another implementer. The logic is that by putting
together these skills at the leadership level one gets the best domain
leadership capability. There is much to support such a skill based approach. There
is another approach too that could be very viable that is rooted in
neuroscience.
Ever since
Roger Sperry, the 1981 Nobel Laurate, brought out the concept, lot of research
has focused on lateralization of brain through left brain and right brain
functionalities. Right brained individuals are expected to be more intuitive,
thoughtful and subjective while the left brained ones to be more logical,
analytical and objective. It is not that the two sides of the brain are completely
compartmentalized; the brain does work together with the various parts of the
brain including the left and the right conversing through the corpus callosum
which joins them. The point here is that the twin leader approach has an enormous
potential to bring together not only complementary domain skills but also a
winning fusion of intuitive and logical, thoughtful and executional, and
subjective and objective skills that are so essential to accomplish top-class
leadership. If organizations look beyond the immediate costs of twin leadership
approach, the organizational value that could accrue would be immense.
Posted by Dr CB
Rao on June 5, 2016
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