Winning - Jack Welch [40]
Culligan’s situation, unfortunately, is not unique to old, established multinationals. Just recently, I spoke with Dara Khosrowshahi, the new CEO at the online travel company Expedia. Dara also walked into an org chart quagmire when he arrived on the job at the end of 2004. Expedia, less than ten years old and highly entrepreneurial, had been growing so fast, no one had taken the time to clarify reporting roles and responsibilities. As his first priority, Dara set out to fix that.
My goal here is not to describe how to come up with the perfect org chart. Each company will do that differently, based on its size and the business it’s in. But some principles apply across the board. If you want to manage people effectively, help them by making sure the org chart leaves as little as possible to the imagination. It should paint a crystal-clear picture of reporting relationships and make it patently obvious who is responsible for what results.
Just as important, it should be flat.
Look, every layer in an organization puts spin on a new initiative or organizational event. It’s like that children’s whispering game, tele phone. Every time a piece of information travels through another person, it changes. Layers do that too, adding interpretation and buzz as information travels up and down the ladder. The trick, then, is to have fewer rungs.*
Layers have other vices. They add cost and complexity to everything. They slow things down because they increase the number of approvals and meetings required for anything to move forward. They have an odious way of burying new businesses, or small units in big companies, in honeycombs of bureaucracy. They tend to make little generals out of perfectly normal people who find themselves in hierarchies that respond only to rank.
The awfulness of layers is nothing new to anyone. And yet companies gravitate toward them. For some, layers feel like the only way to respond to growth. More sales—quick, add more district managers in the field. More employees—quick, add more staff at headquarters.
For others, the reasoning is even worse. Layers are a way to give people the feeling of growth when there is none. Layers allow you to give employees promotions instead of raises. That’s better than doing nothing, right? Wrong!
The inexorable pull toward layers is why I suggest you make your company 50 percent flatter than you’d normally feel comfortable with. Managers should have ten direct reports at the minimum and 30 to 50 percent more if they are experienced.
When you’ve got great players, you’ll get the most out of them if their reporting relationships and responsibilities are blindingly clear. Your org chart is not the only way to accomplish that, but it’s a necessary first step.
After you’ve hired great people, your job becomes managing them into a winning team.
Make HR matter, with a cadre of pastor-parent types at the helm. Ensure people really know how they’re doing, with evaluation systems that are honest and real. Motivate and retain wisely with money, recognition, and training. Face into charged relationships without flinching. Pay ample attention to your largest constituency, the middle 70 percent. And finally, get that org chart flattened and straightened out.
These six practices take time, that’s true. But companies are not buildings, machines, or technologies. They are people.
Besides managing them, what work matters more?
8
Parting Ways
* * *
LETTING GO IS HARD TO DO
NOW FOR THE HARD PART.
For the previous three chapters of this book, I’ve talked about the exciting, energizing stuff of work—leading, finding great players, and managing people into a winning team.
But we all know that work isn’t a perpetual paradise.
Work is more like the Garden of Eden. Sometimes people have to be let go.
That event—be it a firing for nonperformance or a layoff for economic reasons—is awful, both for the person doing the casting