February 16, 2012
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Perhaps this has happened to you: you get informed that your company is now going to take a left turn, when last you heard it was going to take a right. You ask around, "When did that happen?" You get a lot of "It wasn't my decision." You even ask the senior folks you assume must have been involved. You get back too many of these: "I don't know, I wasn't in the room." Maybe you're a senior person yourself, and people are knocking on your door with those questions. Or even worse, it's your company and people are coming into your office and asking, "Why wasn't I in the room?"
It happens all the time, according to Bob Frisch, the author of Who's In The Room: How Great Leaders Structure and Manage the Teams Around Them.
"If you think the the big decisions in your company are made by the people on organization chart, think again," he says. "The truth is that it’s rarely the formal senior management team who’s in the room with the leader as they think through major issues, but instead a kitchen cabinet—an ad hoc, unofficial, and flexible inner circle of advisers that doesn’t even have a name. Yet most executives can name its core members."
Bob is Managing Partner of The Strategic Offsites Group, and was previously a Managing Partner at Accenture, he also held leadership roles at Gemini Consulting and The Boston Consulting Group. He has been published in Harvard Business Review and featured in Fortune, Wall Street Journal and Bloomberg BusinessWeek.
Most importantly, he's someone who's been in the room.
This is such an important issue for every company of any size to get their arms around that it begs for more insight and clarification, which Bob provides here.
What’s the biggest myth about how big decisions are made in organizations?
People assume that the top team, often called the senior management team or executive committee, collectively makes the most important decisions for a company. While that group or its members may be engaged in the process, it's rarely the case that this group actually makes key decisions together. Most often big decisions are actually made before or after this formal team meets.
Why does it matter that executives at all levels learn the truth about how big decisions are made?
The assumption that the executive team should collectively be making key decisions underlies a number of key organizational processes, from approving business cases to scheduling key initiatives. When these processes fail to work effectively, fingers start pointing to the individuals or groups involved rather than at the root cause for the failure.
What should be done differently?
Processes need to be reoriented to reflect the fact that decisions rest with individuals, not groups. The role of the executive team, or any other leadership group, can then be redefined to do what teams do best–debate, refine, adapt, identify resource conflicts, raise concerns–rather than spend their time in ritualistic discussions and approval meetings that don’t actually accomplish anything.
What do you get by doing that?
The executive team can become an even more valuable forum where the boss can bring key discussions before the entirety of the organization seated around a single table. The various perspectives and wide expertise represented can be leveraged into helping the leader make higher quality decisions using broader, more meaningful input from the executive team and, in the process, actively engaging them in committing to a successful implementation of those decisions.
Why hasn’t the influence of kitchen cabinets in organizations been noticed before?
Oh, it’s been noticed, believe me. It’s just not often discussed, since doing so would be treading on a politically charged area of corporate life.
What are the advantages of having a kitchen cabinet?
Everyone needs trusted people around them they can turn to when they are faced with a big decision, and CEOs are no exception. The honesty, confidentiality and quality of counsel a kitchen cabinet can provide are irreplaceable.
Does this mean there’s no need for an executive committee?
Absolutely not. In fact, one of the concerns we dealt with in writing the book was that readers might come away with this misperception. The executive committee has a number of unique and irreplaceable roles – it’s just that sitting as a decision making body isn’t necessarily the biggest one, and it’s unfortunately the one that they’re most often cast in.
How can organizations make better use of their executive committee or senior management team?
There are three key roles that the top team needs to spend their time on – developing a common view of the future, prioritizing and integrating key initiatives, and managing dependencies among the various parts of the enterprise.
Why is this "portfolio approach” to teams better than trying to concentrate decision making into an executive committee?
The monolithic, one-size-fits-all model isn’t working. The agendas of senior management teams are cluttered with a hodgepodge of items, ranging from formal approval of massive investments to deciding on minor changes to corporate policies. Their unique role needs to be leveraged to deal with important issues only they can resolve, and other items need to have organizational entities manage them. The best companies have a whole spectrum of teams, formal and informal, temporary and permanent, assigned to handle the issues appropriate to each.
Why is it more urgent now to know who’s in the room?
There are tremendous pressures from consumers, employees and investors to be constantly ratcheting up the effectiveness of organizations. And so the effectiveness of both the leader and their team needs to increase in order to respond to these demands. But without acknowledging the reality of their respective roles in key decisions, attempts to improve that effectiveness will have limited success.
What’s the first step to take in applying this strategy?
I'll give you three. The first is for a leader to think through how to reconfigure and coordinate the teams around them to best fit their individual style. The second is to candidly and explicitly talk to the executive team about why it’s important to change how the company should be managed. And the third is to jump-start the change by refocusing the senior management team on the key tasks only they can do.
“It’s time to send the psychologists packing,” Bob writes. “Time to stop hamstringing yourself and selling the members of your executive team short. And time to free decision making and decision makers throughout your organization from the tyranny of the organization chart.”
You’ll know his advice is working when you see a dramatic drop-off in people coming into your office and asking, "Why wasn’t I in the room?"
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