Tag Archives: Beaurocratic

DOES THE TABLE IN YOUR BOARDROOM HAVE FOUR CORNERS?

In small to medium sized businesses there is often a missing corner or two on the boardroom table and, increasingly, the same is now true of larger companies.

What are these corners and what purpose do they serve?

Boardroom TableThe smaller the business the more likely that it is run by people who think in similar ways. For start-ups that friendship, that ‘likeness of mind’ is often a key component in getting from concept to reality but at that point it can become something that hinders the unsuspecting company.

The ‘Board’ (or those running the company) becomes a couple of people or a group of people who think and act the same. They lack the diversity that is required to drive the kind of growth which delivers on early potential. The business reaches a critical size and growth ceases or, if they are fortunate, slows.

In the larger company the situation is different but generates the same problem. There are a number of people around the boardroom table, often very diverse in specialism, experience and knowledge. And because of that diversity, a dangerous assumption is made – that the necessary range of skills, knowledge and experience are assembled.

In both cases, a reality check is needed. That check involves ensuring that four vital specialisms are assembled; the four key corners of any boardroom table. But what are these four key specialisms?

  1. The Strategist. This specialism is the most easily and most frequently overlooked. The board assume strategy to be a generalist skill which they can all handle between them and any ensuing strategy ends up being a hotch-potch of generalist ideas lacking proper direction and cohesion. And responsibility for strategy (in other words the company’s future) is shared, the buck does not stop anywhere and over time the strategy becomes a vague notion or is discussed in terms of aims and objectives with few (if any) clearly defined actions worth having.
  2. The Money Man. Of the four, this is the specialism least likely to be omitted in larger companies (there will usually be a Financial Director) but in the smaller companies is an assumed presence which doesn’t really exist. It is assumed because books are kept and the accountant checks them over every quarter (if lucky) or annually (more commonly).
  3. The Manager. Of bureaucratic mind-set, the Manager is the ‘husbander of resources’ essential to any organisation to ensure the economical use of those resources and to the eradication of waste. Unwatched the Manager can become caught up in his/her own bureaucratic processes and start overlooking the very waste he/she despises because the processes appear to be working. Focus is on the job of management not the future of the organisation.
  4. The Leader. Often, wrongly, assumed to be the same person as the manager, the Leader tends to the less bureaucratic and more to the adhocratic. The Leader’s role is to take people with them on the journey. Of course, without a dedicated Strategist the journey is often ill-defined and the Leader, being of adhocratic mind-set will lead wherever people will follow but not necessarily in the right, planned direction best for the company.

Put together the four might seem a strange group to be working together but it is their diversity which gives them their strength. The Money Man and the Manager tend to be data driven, needing historical information to inform any decision making. The Strategist and the Leader tend to the visionary, preferring to look to the future in preference to the past.

The mix is further diversified when considering where they sit on the continuum between bureaucratic and adhocratic. The Manager tends to be highly bureaucratic, the system and the process are everything and ease the job of management. The Money Man and the Strategist sit nearer the middle of the continuum, the data driven Money Man tending to (but not driven by) the bureaucratic and the future driven Strategist tending to (but not driven by) the adhocratic. The Leader tends to be more highly adhocratic wanting everyone pulling together regardless of direction.

None of these definitions are absolutes. There are certainly Strategists who favour historical data and putting a strategy in place requires a healthy dollop of bureaucracy if it is to be cohesive and executable.

The key to the four corners is that they balance each other. Bureaucracy and adhocracy are not natural bed fellows but are both important components of a healthy board. Data driven and future driven mind-sets are more likely to get along (but not always).

Most boards will feature a nominal leader in the CEO however the reality is that individual could be from any of the four corners but tend to be either the Manager or the Money Man. Companies are run sensibly, conservatively but are resistant to change. This is all very safe unless change is required (think of the recent spate of closures on the High Street).

There is nothing wrong with the CEO being Manager or Money Man so long as the board is balanced, that all four corners are occupied. However, most likely to be absent from the board room are the Strategist and the Leader which can undermine future planning and the spotting and seizing of opportunities to diversify and realise attractive directions in which to move and grow.

The healthy board will ensure the four corners are filled before adding other seats around the table. But how many actually do and how does yours shape up?

 

© Jim Cowan, 2013-2016

Contact Cowan Global

Twitter @cowanglobal

Facebook.com/cowanglobal

 

 

ADHOCRATIC – WHAT DOES IT MEAN?

I was recently part of a group briefed to come up with some statements for a newly formed group of like-minded individuals and companies who needed to better define why they exist, who they are, what they stand for and where they are going. We were briefed to avoid words like ‘Mission’, ‘Values’ and ‘Vision’ as the group wishes to distance itself from standardised and/or bureaucratic norms. I suggested they might be ‘Adhocratic’ before needing to explain what I meant. The group loved it and have adopted it as part of those over-arching descriptors. However, the initial lack of understanding left me wondering whether it is a term which needs wider understanding……

The Centre for the Study of Adhocracy by Helen Johnson (2006)In short-hand, ‘adhocratic’ is the opposite of bureaucratic. While a good starting point, in long-hand, it is a bit more than that.

Being the opposite of bureaucratic, adhocratic is, in theory at least, unstructured, decentralised and responsive.

The term was first used as long ago as 1968 when Warren G Bennis, a US leadership theorist, proposed that the successful business of the future would rely on nimble and flexible project teams within a structure he called ‘adhocracy’.

Adhocracy then made fleeting appearances in theories ranging from “a new freeform world of kinetic organisations” (Future Shock, Alvin Toffler, 1970) to being one of four organisational structures defined by Henry Mintzberg in The Structure of Organisations (1979).

In my view the best description is “any form of organisation that cuts across normal bureaucratic lines to capture opportunities, solve problems and get results” stated in Robert Waterman’s 1990 book ‘Adhocracy.’

The fact so few have heard of, let alone employed Adhocracy suggests that Bennis read the future wrongly when he was, in part, spot on. However where Bennis suggested that adhocracy was the future for all successful companies, Mintzberg and Waterman saw that it is not a structure suited to many.

Local authorities for example are often slated for being bureaucratic when the truth is, they could not function effectively in any other way. It is when they become over bureaucratic, as they frequently do, that frustration arises.

Where adhocracy has, and continues to, come into its own is in the creative industries, in the new technologies and as creative departments within larger bureaucracies. However, even in those areas it appears ideally suited to, it can soon be the undoing of the organisation concerned if at the very least some form of guiding structure is not in place.

This ‘guiding structure’ creates two forms of adhocracy (sub-divisions):

  • The Operating Adhocracy which innovates and solves problems on behalf of clients (think advertising or software).
  • The Administrative Adhocracy which operates through a managed, project team structure in order to serve itself. NASA would probably not describe itself as adhocratic but in fact comes very close to being an Administrative Adhocracy.

It is often mistakenly thought that to be truly adhocratic the organisation will be so ‘freeform’ that it does not require direction or strategy. This is not the case however successful adhocratic strategy would be far lighter touch and flexible. Think Pareto’s Law as your rule of thumb and apply it to flexibility in strategy; a healthy bureaucracy would be 80% rigid and 20% flexible. Less than 20% and bureaucracy starts creeping into the over bureaucratic referred to above.

A strategy for an adhocracy would be the reverse; 20% rigid and 80% flexible becoming over adhocratic the more it creeps below the 20% ‘guiding’ rigidity.

Adhocracy is not for everyone; neither is bureaucracy and in reality most organisations will be positioned somewhere on a sliding scale between the two. And, as I often state, if strategy is to serve any/all of these organisations to their highest potential it must be highly personalised and avoid ‘templated-thinking’ at all costs.

It is not that adhocracies don’t exist, there are many of them operating extremely successfully in all parts of the world. It is that the term ‘adhocratic’ is poorly understood and therefore rarely applied.

© Jim Cowan, Cowan Global, 2011-2016

Contact Cowan Global

Twitter @cowanglobal

Facebook.com/cowanglobal