Harvard Business Review - 2004.09.pdf

FROM THE EDITORPractical CatsLEADERS MATTER MOST whenprojects and problems dont eas-ily break down into to-do lists.Whentea leaves are unclear or when rulesare murky;when there are optionsto be weighed and implications tobe pondered;when whats needed is ajudgment call,not just the OK to runa play already in the book-thats whenyou want the full attention of yourtop people.Unfortunately,upstairs in the exec-utive committee meeting,theyre talking about almosteverything else.The shocking lesson of the lead article inthis issue of HBR is,alas,not surprising:The vast majorityof top management teams spend too little time togetherand fritter away too much of it on a hodgepodge of inci-dentals.All of the members bring items to the agenda,as if they were Secret Santas at an office party.Seeminglyurgent problems get the most attention while importantissues get pushed to the next meeting.Research by MichaelMankins of the consulting firm Marakon Associates showsthat most top teams systematically shortchange the bigconversations and big decisions-formulating strategy,allocating capital,weighing the competing claims of busi-ness units.The authors research,fortunately,also uncoverssome exceptional companies that have learned to usetop managements time like the scarce resource it is.StopWasting Valuable Time is the title of the article thatshows how these companies do what they do,and I urgeyou not to waste anytime before reading it.The problem of dealing with demanding people,such assenior executives,is often likened to the impossible task ofherding cats.The comparison is misleading,though,if youtake it to mean you cant do anything about cats.Herdingisntthesameas managing.Cats can be managed-theyjustcant be managed as you would manage cattle.It seems to me that the most important problems inbusiness are managing cats problems.Getting seniorteams to focus on the right issues is one.Another is shar-ing knowledge.Knowledge-management types like to talkabout the difference between structured and unstructuredknowledge.Structured knowledge is relatively easy tocodify or even to turn into checklists;unstructured stuff ishard to articulate,hard to pass on,and best learned throughexperience and over time.Almost by definition,unstruc-tured knowledge is more valuable-precisely because it is hard to dupli-cate.Dorothy Leonard,of Harvard Busi-ness School,and Walter Swap,of TuftsUniversity,call this kind of knowledgedeep smarts,and your organizationis full of people who have it.Confronted with the challenge ofsharing deep smarts,managers toooften throw up their hands.Cant doanything about it.It either happensor it doesnt.You know,managingtalent is like herding cats.Well,no.It can be done,and inan organized,systematic,businesslike way-just not by thesame means used to share structured knowledge.Leonardand Swap,in Deep Smarts,show how to create the condi-tions,relationships,and processes that will help new catslearn the old catstricks.The relationship between leaders and followers is a thirdcat-management issue.We all know that you cant herdfollowers;a leader needs their consent.But consent is onlyone aspect of the relationship,and not the most interestingor important.Followers have their own powerful motiva-tions vis-visthe boss-motivations over which the leaderhas little or no control.Transference is one of these motiva-tions;it occurs when,for example,a person becomes afather figure or a mother figure to someone else.It happenswhen a patient lies down on a psychoanalysts couch;ithappens when a subordinate sits down in the bosss corneroffice.For the most part,the follower makes transferencehappen,not the leader;but they both have to live withthe effects.In Why People Follow the Leader,psychoana-lyst Michael Maccoby,who four years ago wrote brilliantlyin these pages about self-important,narcissistic leaders,looks at what happens when its the follower who investsin the leader too much importance-and how leaders canbring the relationship back to a healthier balance.Thomas A.Stewart10HARVARD BUSINESS REVIEWt h o u gI D E AGet Self-OrganizedHow top-down businesses exploit the power of bottom-up self-organization.by David TicollA new type of business entity isemerging:the tightly controlled,hierarchical production ordistribution system with featuresof chaotic self-organization.A little chaos goes a long way.Consider thatwhen itcomestocontrol over processes like pro-duction,delivery,and exchange,every businessmodel falls somewhere along a continuum.Atone end are highly controlled,hierarchical pro-duction systems.Someone,whether at GeneralMotors,Wal-Mart,or Amazon,is in charge.At theother end are self-organizing entities,whereno individual or office ex-erts control over the oper-ation.They are,in the bestsense of the word,chaotic.At eBay and the stock ex-change,for example,mar-ket participants-not a re-tail owner-decide whatis to be sold and bought,what the price will be,andmore.Now a new type of business entity isemerging:the tightly controlle