ships identified from 31 companies representing more than
26,000 data observations. It then
generates a bar chart indicating
how much your organization’s
execution score has improved
and where it now stands in relation to the highest-performing
companies from our research
and the scores of other people
like you who have used the
simulator starting from the same
original profile you did. If you
wish, you may then advance to
the next round and pick another
five actions. What you will see
is illustrated above.
The beauty of the simulator
is its ability to consider –
consequence-free – the impact
on execution of endless combi-
nations of possible actions. Each
simulation includes only two
rounds, but you can run the simulation as many times as you like.
The simulator has also been used
for team competition within
organizations, and we’ve found
that it engenders very engaging
and productive dialogue among
senior executives.
While the simulator cannot
capture all of the unique situations an organization might face,
it is a useful tool for assessing
and building a targeted and effective organization-transforma-tion program. It serves as a vehicle to stimulate thinking about
the impact of various changes,
saving untold amounts of time
and resources in the process.
customers’ needs, and changes in the broader marketplace.
Meanwhile, more important information was so heavily filtered as it moved up the hierarchy that it was all but worthless for rendering key verdicts. Even if lower-level managers
knew that a certain project could never work for highly valid
reasons, they would not communicate that dim view to the
top team. Nonstarters not only started, they kept going. For
instance, the company had a project under way to create new
incentives for its brokers. Even though this approach had been
previously tried without success, no one spoke up in meetings
or stopped the project because it was a priority for one of the
top-team members.
Q No one had a good idea of the decisions and actions
for which he or she was responsible. The general lack of
information flow extended to decision rights, as few managers
understood where their authority ended and another’s began.
Accountability even for day-to-day decisions was unclear, and
managers did not know whom to ask for clarification. Naturally, confusion over decision rights led to second-guessing.
Fifty-five percent of respondents felt that decisions were regularly second-guessed at Goodward.
To Goodward’s credit, its top executives immediately responded to the results of the diagnostic by launching a change
program targeted at all three problem areas. The program
integrated early, often symbolic, changes with longer-term
initiatives, in an effort to build momentum and galvanize participation and ownership. Recognizing that a passive-aggressive attitude toward people perceived to be in power solely
as a result of their position in the hierarchy was hindering
information flow, they took immediate steps to signal their intention to create a more informal and open culture. One symbolic change: the seating at management meetings was rearranged. The top executives used to sit in a separate section, the
physical space between them and the rest of the room fraught
with symbolism. Now they intermingled, making themselves
more accessible and encouraging people to share information informally. Regular brown-bag lunches were established
with members of the C-suite, where people had a chance to
discuss the overall culture-change initiative, decision rights,
new mechanisms for communicating across the units, and
so forth. Seating at these events was highly choreographed
to ensure that a mix of units was represented at each table.
Icebreaker activities were designed to encourage individuals
to learn about other units’ work.
Meanwhile, senior managers commenced the real work
of remedying issues relating to information flows and decision rights. They assessed their own informal networks
to understand how people making key decisions got their
information, and they identified critical gaps. The outcome
was a new framework for making important decisions that
clearly specifies who owns each decision, who must provide input, who is ultimately accountable for the results,
and how results are defined. Other longer-term initiatives
include:
Q Pushing certain decisions down into the organization to
better align decision rights with the best available information. Most hiring and bonus decisions, for instance, have
been delegated to immediate managers, so long as they
are within preestablished boundaries relating to numbers
hired and salary levels. Being clear about who needs what
information is encouraging cross-group dialogue.
Q Identifying and eliminating duplicative committees.
Q Pushing metrics and scorecards down to the group level,
so that rather than focus on solving the mystery of who
caused a problem, management can get right to the root
cause of why the problem occurred. A well-designed scorecard captures not only outcomes (like sales volume or revenue) but also leading indicators of those outcomes (such
as the number of customer calls or completed customer
plans). As a result, the focus of management conversations
