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Transcript of Strategic Leadership In a Wiki World Association for Strategic Planning Denver Chapter December 8,...
Strategic LeadershipIn a Wiki World
Association for Strategic PlanningDenver Chapter
December 8, 2010
The Mighty Who Fell
• AIG• Arthur Andersen• Bears Stearns• Chrysler• Circuit City• Citigroup• Countrywide
• Enron• Fannie Mae• Freddie Mac• General Motors• Lehman Brothers• Washington Mutual• WorldCom
©2010 by Rod Collins
A Prevalent Factor:Hierarchical Bureaucracies
Businesses That Are Changingthe Ways We Do Business
• Amazon• Apple• Best Buy• eBay• GE• Goldcorp• Google
• IBM• Linux• Procter & Gamble• Starbucks• Whole Foods• Wikipedia• W.L. Gore (Gore-Tex)
© 2010 by Rod Collins
A Prevalent Factor:Collaborative Networks
The Game-Changer
Networks Work Smarter and Faster Than
Hierarchies
©2010 by Rod Collins
Background: 1997
• Blue Cross Blue Shield Federal Employee Program (FEP)– Business alliance of 39 independent BCBS Plans
delivering a seamless national product– Largest privately underwritten health insurance
account in the United States– $6 billion in annual premium revenue– 3.6 million customers– 43% market share
© 2010 by Rod Collins
Why We Needed a Change• Signs of trouble
– Medical loss ratio: 106.2%– Performance index: 78 (120 pt scale)– BCBS Plan satisfaction with FEP leadership: 79% (poor)
• Our business world was suddenly moving much faster
• Misaligned management model– Using command-and-control while lacking command authority– Meetings were perennial political debates– Major initiatives had lots of “bugs”– “Herding cats”
© 2010 by Rod Collins
The Business Alliance Management Problem
How do you manage when you have no practical authority over many geographically dispersed workers in fast-changing markets?
© 2010 by Rod Collins
Why We Needed a Change
• We needed to move smarter and faster– Shift the politics from control to collaboration– Shift the conversation from debate to dialogue– Shift the decisions from command to consensus
• We needed better meetings with lasting results– Best meetings are run by outside facilitators, but results don’t last– Train executives to be facilitators– Develop a meeting format that fosters listening, participation,
consensus, and focused action – all in a short period of time
© 2010 by Rod Collins
Work-Thrus
• A meeting process that provides organizations with quick access to their collective knowledge
• Work-Thrus are powerful tools that get to the heart of complex business issues or processes by drawing on an organization’s best collective thinking and moving to a clear consensus on action in a very short period of time
– Critical Initiatives– Major Projects– Business Process Improvement
©2010 by Rod Collins
Work-Thrus
• 1 or 2 day offsite meetings of between 15 and 60 participants
• Alternate between three different interactive activities:
1. Presentations
2. Small Group Exercises
3. Large Group Discussions
©2010 by Rod Collins
The Four Cardinal Rulesof Work-Thrus
1. Presentations are always delivered without interruption.
2. After presentations, clarifying questions only.
3. Small group exercises are always focused on clear and specific deliverables.
4. Conclusions and agreements about the group’s ideas rest with the group – period.
© 2010 by Rod Collins
Surowiecki’s Four Conditionsfor “Wise Crowds”
1. Diversity of opinion
2. Independent thinking
3. Local knowledge
4. Aggregation mechanisms
Why Work-Thrus Work• Nobody is smarter than everybody
• There is nothing as powerful as getting everybody – or at least a critical mass of everybody – in the “same room at the same time.”
• Provide quick access to collective knowledge
• Companies discover “what they don’t know that they don’t know”
• Satisfy Surowiecki’s Four Conditions for “Wise Crowds”
• Drive a clear focus on what’s most important
©2010 by Rod Collins
What We Learned• There are two basic phases to every major project: order and chaos.
Our only choice is the sequence – why, in fast-changing times, would anyone choose chaos last?
• “What you don’t know that you don’t know” is the prime culprit behind failed initiatives.
• Shared understanding is a far more powerful driver of consistency than control
• Knowledge workers are fully capable of “connecting the dots” once they have a realistic frame of reference
© 2010 by Rod Collins
Ten Years Later: 2007
• Blue Cross Blue Shield Federal Employee Program (FEP)– $19 billion in annual premium revenue– 4.6 million customers– 59% market share– Medical loss ratio: 90.6%– Performance index: 104 (unprecedented high)– BCBS Plan satisfaction with FEP leadership: 97%
© 2010 by Rod Collins
The Three Key Laws ofHuman Hierarchies
1. Division of Labor: Production is most efficient when work is divided into specialized tasks.
2. Unity of Command: Each person reports to a single supervisor.
3. Scalar Principle: Individuals are ranked by authority within an organization chart that defines explicit communication protocols.
© 2010 by Rod Collins
The Three Key Laws of Human Networks
1. Moore’s Law: Semiconductor chip capacity doubles every 18 – 24 months.
2. Metcalf’s Law: The value of networks grows exponentially to the number of participants.
3. Dunbar’s Number: 150 – the limit where members of a physical human community can maintain strong links with one another.
©2010 by Rod Collins
The Wiki World
• Connectivity is the new electricity• Knowledge is an abundant resource – it only grows by
giving it away• Nobody is smarter or faster than everybody• Life cycle of business models has decreased from 30 – 40
years to 7 – 10 years• Innovation is not an option – it’s a requirement for
business sustainability• The past is no longer a proxy for the future
© 2010 by Rod Collins
Organizing Models
Top-Down Hierarchies
• Mass production• Leaders think “inside-out”• Leverages expert
knowledge• Basis of strategy: central
planning • Basis of execution:
hierarchical organization
Peer-to-Peer Networks
• Mass collaboration• Leaders think “outside-in.”• Leverages collective
knowledge• Basis of strategy: collective
learning• Basis of execution: self-
organization
© 2010 by Rod Collins
Key AssumptionsTop-Down Hierarchies
• If anything is to get done, someone needs to be in charge.
• The smartest organizations have the smartest individuals.
• An organization’s intelligence resides in a select number of star performers who leverage their expertise through the power to direct and control the work of others.
Peer-to-Peer Networks
• If anything is to get done, everyone needs a shared understanding
• The smartest organizations have quick access to their collective knowledge
• An organization’s intelligence resides in the diversity of its members who leverage their collective knowledge through the power to connect and collaborate with each other.
©2010 by Rod Collins
The Five Disciplinesof the Collaborative Enterprise
1. Understand What’s Most Important to Customers
• Direct Customer Feedback: Surveys, Focus Groups• Customer Segmentation Data: Value Propositions• Reliable Customer Proxies: CSRs, Consumer Reports
© 2010 by Rod Collins
The Five Disciplinesof the Collaborative Enterprise
2. Learn How to Leverage Collective Knowledge
• Electronic Learning Platforms: Wikis, SharePoint• Collective Learning Processes: Work-Thrus• Learning Measurement System: Balanced Scorecard
© 2010 by Rod Collins
The Five Disciplinesof the Collaborative Enterprise
3. Bring Everyone Together in Open Conversations
• Cross-Functional Teams• Open Forums: Town Hall & Open Space Meetings • Company Blogs
© 2010 by Rod Collins
The Five Disciplinesof the Collaborative Enterprise
4. Focus on the Critical Few Drivers of Success
• Three Priorities• Key Indicators: Subset of Balanced Scorecard• Cross-Functional Goals
© 2010 by Rod Collins
The Five Disciplinesof the Collaborative Enterprise
5. Hold People Accountable to Their Peers
• Peer Hiring• Peer Evaluations• Facilitative Leadership
© 2010 by Rod Collins
Which Picture Best Reflects Your Practical Management
Challenge?
For more information contact:
Rod Collins• Author, Leadership in a Wiki World: Leveraging Collective Knowledge to Make
the Leap to Extraordinary Performance
www.wiki-management.com