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The Silent Killers of Strategy

Implementationand Leaming
Michael Beer • Russell A. Eisenstat

Six si/,ent killers


of strategy
implementation
exist in most
companies, but
too many managers
avoid confronting
them. Leaders
need to face these
killers if they and
their organizations
are to learn and
succeed.

Michael Beer is a professor of Doctors call high cholesterol a "silent and management processes.' Easier said
business administration at the killer" because it blocks arteries with no than done Between the ideal of strategic
Harvard Business School and outward symptoms. Companies, too, alignment and the reality of implementa-
chairman of the Center lor have silent killers working below the sur- tion lie many difficulties
Organizational Fitness. Russell face - mutually reinforcing barriers that
A. Eisenstat is president ol block strategy implementation and organi- For one thmg, senior managers get lulled
the Center for Organizational zational learning. The silent killers can be into believ ing that a well-conceived
Fitness and a senior overcome, hut first leaders must engage strategy communicated to the organization
organizational fellow people throughout their organizations in equals implementation. For another, they
at McKinsey & Co. an honest conversation about the barriers approach change in a narrow, nonsys-
Contact them at: and their underlying causes. temrc and programmatic manner that does
mbeer@hbs.edu and not address root causes.
reisenstat@orgfitness.com. Companies have long known that, to be
cornpetrtrve, they must develop a good We began our research on strategy imple-
strategy and then appropriately realign mentation when CEO Ray Gilmartin and
structure, systems, leadership behavior, chief strategy officer Ralph Biggadike of
human resource policies, culture, values Becton Dickinson recognized that perfect-

Sloan Management Review Beer • Eisenstat


Summer 2000
Copyright 2000. All rights reserved.
ly sound strategies were not easily implemented. 2 included, '"We have great people." Also, in many
Nowhere was the challenge more evident than in organizations, a function such as R&D or manufactur-
their global strategy. As is often the case, good inten- ing was perceived as a strength.
tions embodied in a new structure were not sufficient
to change behavior.' Teams created to enact strategies
Organizational Fitness Profiling
across several geographic regions couldn't seem to
coordinate their research and development, manufac- A Way To Unearth the Root Causes of Strategy Blockers
tunng and marketing. A worldwide educational Step by Step
program created to demonstrate how the global orga- Organizational Fitness Prof1l1ng IDFP) rs both an mtervennon method and
nization should work fatled to overcome barriers ' a research approach It unfolds over a series of meetings intended to
30 At the business-unit level, too, the lack of cross- promote an open and fact-based dialogue within the senior management
functional systems blocked strategy implementation. team of an organizational unit, as well as between the top team and
lower organizational levels The process involves five steps
Like other companies we know, Becton Dickinson
bought in to the structures consultants recommended,
1. Create a statement about direction. The senior management team
but a gap appeared between knowing what to do
develops a concise statement of strategic and organizational direction
and actually doing n.' that articulates the links among the compeuuve environment, performance
goals, business strategy and needed organizational and cultural changes
For a decade, we have conducted research focused on The statement wil be used to communicate the strategy to the broader
organization and to explain the logic behind n - and as a stimulus to
understanding the root causes of the difficulties that
collecting oruaruzanonal information on barriers to unplernentatron
Becton Dickinson and others encounter when respond-
ing to shifts in competitive strategy. Using an inquiry 2. Collect data on barriers and strengths. A task force composed of
and action-learning method we call "Organizational a cross-section of well-regarded managers, one or two levels below the
Fitness Profiling ( OFP)," we enlist a team of senior top team. ts appointed to conduct open-ended mterviews inside and out-
side the organization about specrnc management practices and organiza-
managers to serve as our co-investigators. The process tional arrangements that help or hinder the implementatron of strategy
provides a window for understanding deeply rooted The task force selects the sample of mdividuals interviewed The outside
barriers that are common to an array of companies. researchers conduct interviews with members of top management about
(See "Organizational Fitness Profiling.")" their own views of barriers to strategy trnplernentatron and about their
effectiveness as a team The task force meets together to analyze the
information collected from the mterviews and rdentrftes major themes
The method starts with the top team of the business
unit or corporation defining its strategy. Team members 3. Develop an integrated plan for change. In an mtensive. three-day
then commission a task force of eight lower-level feedback and planning meeting, the top team receives a thorough and
candid account from the task force on how the organization rs function-
managers to collect data about perceived strengths as
ing Then. using a comprehensive analytic framework, the top team ana-
well as barriers to implementing the strategy. After lyzes the underlying causes of the barriers to implementation and devel-
the task force completes training, it interviews 100 ops a broad visron for redesiprunq the organization The team typically
people two or three levels below the top team - and refines its own role, responsrbrhnes. meetings and decrsion-rnakmq
some internal or external customers. In a three-day process Senior managers also develop an irnplementatron plan which
integrates previous rrunatrves and adds supplements, rf necessary Work
meeting, the managers and the researchers receive focuses on projects that directly improve business performance and that
feedback from the task force, diagnose the root develop broader organizational cepabihtres. such as improved ccordma-
causes of the problems and identify and develop a non, managerial competence and employee commitment Projects are
plan to change the organization. typically conducted by cross-functional teams and are periodically
reviewed by the senior management team

Of the profiles we conducted in 12 companies (con- 4. Refine the plan. The top team reviews and refines the proposed plan
sisting of more than 150 different units), we examined with the employee task force The meeting serves as a reality check on
12 profiles in depth from 4 companies - 10 for busi- the adequacy of the senior management team's plan It also furthers the
development of a cross-level partnership for better managing strategy
ness units and 2 for corporate entities. We facilitated
implementation and learning
each process from beginning to end and thus were
able to obtain a deep understanding of the underly- 5. Implement the plan. Members of the task force are often asked to
ing organizational challenges the businesses faced. play leadership roles m implementing the plan The overall process rs
championed as well as penodicatlv reviewed by the senior team as a
whole, and the task-force data-collection process rs repeated, typically
Obvious Strengths, Hidden Barriers every year or two
W'hat were the strengths in the companies in our
sample? Feedback to the top team nearly always

Beer • Elsenstat Sloan Management Review


Summer 2000

Copyright 2000. All rights reserved.


What were the barrier ..;' The six silent killer.'> listed es that Wright and the other leaders made about how
below were most often mentioned, although struc- they organized and managed SRSD. including how
ture, systems, manage nent processes and human they operated as a team. They and other." in the orga-
resource policies were sometime.'> identified.' nization brought with them a no-longer-valid set of
assumptions. values and skills formed in HP';, tradi-
• Top-down or laissez-faire senior management style tional business That business was built around stan-
(9 of 12 cases) dardized products - differentiated from competitors'
• Unclear strategy and conflicting priorities (9 of 12 by technical excellence. developed over a long cycle
cases) and sole! to engineers. In contrast, success at SRSD
• An ineffective senio- management team ( 12 of 12 involved speed. expensive integrated systems and
cases) customers who were often not eng111eers. The former 31
• Poor vertical communication (10 of 12 cases) HP managers were accustomed to the R&D function
• Poor coordmatron across functions, businesses or being the most powerful - with marketing, manufac-
borders (9 of 12 cases: turing and interfunctional cooperation of minor
• Inadequate down-the-line leadership skills and importance In contrast. success at SRSD demanded
development (8 of 12 cases) mterhmctional coordination and a greater voice for
marketing and the manufacturing engineers who
Employees saw the overall problem rooted in funda- tailored systems to indrvidual customers. An order no
mental management issues of leadership. teamwork longer meant shipping a box. Cross-Functional team-
and strategic direction not 111 the commitment of work was required to l ustonuze and install systems
people or their functional competence. Successful on customers· site.~.
implementation needs more than a leader. it requires
teamwork from a leadership group that, through dia- Adding to the challenge was a strategic and resource-
logue and collaboration. stays connected to the allocation trade-off unique to the systems business:
knowledge embedded in lower levels.' The xix harri- whether to focus on building revenues through one-
ers are silent killers because they are rarely publicly shot custom system." or to focus on developing stan-
acknowledged or explicitly addressed. In fact, the dard systems platforms, The R&D function. headed
core barrier. called "poor vertical communication," by John Vink, had rcsponsibihtv for long-term sys-
not only hmders strategy implementation, it also pre- tems-platform development. It was up to the custom-
vents discussion of the harriers themselves. The case systems group. located in Sam Scott's manufacturing
of Santa Rosa Svstem« Division (SR.SD), formerly of group. to rexpond to current and highly variable cus-
Hewlett Packard (HP) and now part of Agilent tomer requests for tailored systems Custom-systems
Technologies. illustrate.'> the silent killers at work." engineers. who managed to create a vibrant custom-
;,y;,tem;, business 111 just two years. also were expect-
SRSD was formed m 1992 from lcf product line.'> that ed to support long-term R&D: R&D engineers were
came from five different divisions in HP's test-and- needed to support the custom-systems business,
measurement orgaruzarion. Its charter wa-, to estah- Thercrn "lay the rub"
hsh, in new and emergmg markets. ;1 beachhead for
complex electronic systems capable of measuring and A cold war developed between the two groups.
testmg high frequencies emitted by equipment Competition for resources also appeared from the
employed 111 communications. semiconductor manu- marketmg function \'Vnght and his top team set up
facturing, aerospace and defense. three cross-functional teams to coordinate product
and strategy development in three distmct product
HP had competed successfully in the general-purpose lines. hut H&D section managers were assigned to
instrument busines«, but customizing systems was a run all three teams Custom-svsterns engineers
new enterprise. By 199~, general manager Scott \'Vright skipped meetings, complanung that no one paid
and hix staff were experiencing difficulties implement- attention to their business. Meanwhile R&D protested
111g the strategy. Growth and profit'> lagged projections, the custom-systems group's unwillmgness to help
and morale among employees was at an all-time low. develop new platforms And the marketing group
saw its resources dwindling in the struggle to serve
The performance gaps at SRSD were due. not just to both short- and long-term strategies. The approach
a difficult competitive environment. hut also to chore- that \'\fright and his team adopted to manage SRSD

Sloan Management Review Beer • hseastat


Summer 2000

Copyright 2000. All rights reserved.


did not fit the competitive task at hand. The mismatch Silent killer six: inadequate down-the-line leadership
resulted in an organization plagued by the silent killers. skills and derelopment. Lower-level managers were
not developing skills through newly created opportu-
nities to lead change, nor were they supported
The Silent Killers through leadership coaching or training. The situation
Silent killer one: top-down or laissez-faire senior man- cried out for open engagement with root causes.
agement style Aspects of Wright's leadership style
exacerbated the tensions at SRSD. The aspects includ-
ed a discomfort with conflict. frequent absences to How the Six Barriers Interact To Block
manage an acquisition and use of the top team for Strategy Implementation and Learning
32 administrative matters rather than focused strategic Individually, the six barriers are troubling. Taken
discussions. In addition, as one SRSD manager together, they create a vicious circle from which it is
explained, "Scott is a very perceptive and intelligent difficult to escape. To explain their interaction, we
manager. But he is also very opinionated. \Vhenever group them into three categories: quality of direction,
we sit down to discuss strategic issues, I have this quality of learning and quality of implementation.
nagging feeling that Scott's decision concerning that (See ·How the Six Strategy Killers Interact.")
matter has already been prewired. Chances are that
he has already had a closed-door meetmg with one Quality of Direction
of the other functional managers to make the deci- An ineffective top team, top-down or laissez-faire
sion." Development of the necessary coordination to senior-management approach and unclear strategy
implement SRSD's strategy suffered; so did develop- are all related. The CEOs and general managers we
ment of lower-level managers. observed often bypassed members of their senior
team, getting information from and giving orders to
those at lower levels - a surefire way to keep the
Employees suspected that the top team leadership group from becoming an effective team.
Laissez-faire managers, on the other hand, under-
preferred to avoid potentially threatening mined the team's potential by avoiding discussions
that could cause conflicts or by not holding their sub-
and embarrassing issues. ordinates accountable for coordinated decision mak-
ing It's a red flag if a leader manages members of
the top team on a one-to-one basis and limits group
Silent killers two and five. conflicting priorities and discussions to nonthreatening administrative matters.
the resulting poor coordination. Those barriers went
hand in hand. As one employee explained, "\Ve have How the Six Strategy Killers Interact
two competing strategies that are battling each other Three killers relate to meftecnve leadership at the top. two to unplernentatron
The sixth suggests that leaders and implementers are neither talking honestly
for the same resources. The resulting factions around about problems nor learning
these two strategies are tearing this organization apart."

Silent killer three· ineffective senior management


team. According to another manager, "The members
of the top team operate within their own silos They
are like a group of fiefdoms that refuse to cooperate
effectively for fear that they will lose power."
~
Quality of Leami11g
Silent killerfour: poor uertical communication. As ·. :f.oorVe~
individuals, employees recognized the problems, but ··,f:Ql!)lll\l~~
they feared the senior managers were not open to
candid discussion. Employees suspected that the top
team preferred to avoid potentially threatening and
embarrassing issues and that people at lower levels Poor Coonlination Quality of Implementation lllll-le
acr0$$ fllnctioos, -~----------- Oown-t!\e-lma
would do better keeping their observations to them- Businesses ~ Lea\lersllif! Sl\ms:
or Borders , and Oeveloj:lmllllt
selves. Cynicism grew.

Beer • Eisenstat Sloan Management Review


Summer 2000

- ··· eopyrlglll 2000. All nght!rre§E'!Fvect.


.~L1ny top tL·:1ms luck- thc-rr diftl.Te1Kes rather than
Many top teams hide their conh ont hard trade-olh dm-rtly. So111e develop
\';lgUL' st.uc-mcni-, of .'>tr.1teg1c purpose One di\·i;.,1011
differences rather than confront hard \\l' -tudk-d :1rticubtL·d ih overall .... trateg1c ohwctt\L'
.ts "f()rtifying our qualuy , product cost and market
trade-offs directly. .... h.rr« strL'ngtlh. \\ lulc also transforming the 111du.'-.t1'\'
through expanded customer knowledge and
product/sen ice mnov.inon ... Ilow wa-, the organiza-
At SRSD. when members of the top ream thought that tion to get direction from that> The goal:-. are
important decisions had been made 111 a prior one-on- hlamclc-.s. hut \\ lnch one is most important - and
one with \Vright, they were less motivated to address why' 33
difficult hut strategically important i.ssue ..., 111 the
group. \Vnght admitted working one=on-one out of Quality of Learning
fear that he would he unable to resolve the conflict Blocked vcrucal communication has a particularly
that might arise if decisions \\ere put to the whol« perntnous effect on a business's ability to implement
team. That kind of panern ha .... been shov, n to reduce .ind rctmc it." "trateg\ - in short, to learn In many
trust. effectrve strateg; reformulation and. ultimately. of the org.miz.uron- \\ L' vx.tmim-d. strategic-pbnnmg
husm« ........ performance. particularly 111 uncertain and documents \\ cnt into great detail on long-term tech-
dynamic business env ironments.1" nology trends, customc-r buying behavior and the
competitive cnvrronnunr. hut they failed to cornmu-
The lack of a clear and compelling statement of the nic atc do\\ 11\\ ard a coherent .story show111g \\ hy the
stratcg«. direction dcpnv es many top managcnn-nt changing world outsid« the organization demanded
groups of a common rallying cry that might help new \\'a) s ofv, orking together.1' Employees never
them coale ...,ce as a te:1m. Convcrselv, a team of man- heard hem the "trateg~ affected priontu-s nor received
ager ..., unwilling to subordmate their individual func- any guidelines shov, 111g the relati\ e prionru-s of pro-
tional interests to the needs of till' overall huvincsx ject;., l lov, could ernplo) ee .... decrdc on a day-to-day
will never he able to de\ clop a clear -t.m-mcnt of ha . . 1s which of their al tivitu-, would he most helpful
prioru 1e.s in making the husinc-,» succes;,ful'

Effective husmess strategies are about making choices: Lack of strategtl' consensus and clarity undermines
deciding what not to do is as important as dhcuo.;sing effect ive upward couununn atlon, too Employees.
what to do The functional head" that make up the un-urc ofw here the husines;, 1s supposed to he
top management grou :1 each stand to gain or lose hy going. cannot help gL·t 11 there. nor can they warn
the choices that are made. An cmphasr- on ckcreasmg those at higher le\ eb whc-n the engine 1;, "skipping
the product cost may lip the bal.rncc of power the track." A iop-dow n management styl« is often the
toward manufactunng: an cmphaxis on innov at ion main harrier to honest upward communication and
will move power tow ;1 rd R&D. VJCe presidents of org.miz.uronal lc.irrung
quality push for incre;1ses in product rcIiabrlrrv, \ice
president ..., of sales want to mcrease market xhnrc Appk- Computer 1s ;1ga111 rllu-trative. I 'nul 1990.
senior managers did not scnously consider opening
A desire to help one's O\\ n department is not ah\ ays up the computer archncrture. licensrng the operating
a matter of ..,e1f-inte1 L's .. At Apple Computer, for systL'll1 or xhiftins; from a lugh-end technkal ... trategy
example. Jean Louis Ga;,se had a sincere belief that to .1 nucldle- or low-end customer-driven str,1tegy.
the company's future Li; 111 high-end computers. It All that despite the fact that ,\licrosoft's de\ elopment
\\a;., really CEO John Scull; ·s Lill\\ tllmgness to engagL' of \Vmdo\\ s \\as kno\\ n to hL' under \\·ay .1s early
hi;., top team in constructiv« conflrct that let (~as.SL'. in ;1;, I t)H 1. :md the likel; impact of \vindcm s on the
effect. him k Apple from rt· .<ponding properly to tls cost of computing\\ ,1..., fa1rh· e\'ident Apple';, difftCul-
comperitiv e em rronmcru." At ~]{'-;[), 111;111ufactunng's ty lay 111 de\ eloping ~111 open dialogue One manager
S:1m Scott certainly c ared about helping SESD sun i\ e recounted ]11.., O\\ n frustration: "For two and :1 half
But some of his a;, .-umpnons needed to he chal- ye:1rs I \\ antL·d to do lo\\ -cos! Macmtoshes I \\·as
lenged. :111d general m.1nager \'\fright's a\ c-rxion to ~d\\'a) s ) elk·d at h\ senior man;1gers that this was
c onfhrt meant they never were. wrong ... Not M1rpri.s111gly. a llNO su1Yey revealcd that

Sloan ManagementReview Beer • Eisenstat


Summer 2000

----·--,CP.ol"npmy'"right 2000.All rights reserved.


man: Apple l'lllplo)el'.-. -.;I\\ senior 111;1n;1gl'r-. ;i-. .md \\ hv. Othcrwrsc. if an unexpected event occur:-,,
unconnected to what \\ ;1-. gotng on at lo\\ vr IL·\ ek' their only recourse 1s to follow the rules or ask the
ho-.-. And till' ho.-..-. nuglu Ix· as confused about lhL·
If thosl' chargl'd \\ uh 1rnplc111l·1ll.1l1011 «.umo: tc-ll -.tr:1ll'g\ as till') :tl'L' If thl' general manager is thl'
senior rnan;1ger.-. .rlxu u problems. a c ompany h.u- no onl) one ''ho Ii.is thl' whole picture. all rn;qor deci-
l'aily warmru; sy-,tcrn On!) .iflc-r programs Lui c111 -.1on-. 111uc.l hl' nude :tl the top. That lead" to thl'
corrlTtl\l' action he t.ikcn Evc-n thc-n. mo-t co1Tect1H· -.1'\th h:trrtL'f. inadequate leadership dc\L'lop111ent
action focusl'S on program content. not till' xiknr do\\ n till' line
krlk-rs New gcx1b, resource.-.. tcdmicil progr:1rn.-. .md
.-.tart will no! .-,ohl' the root problem ..., A.-. i h« \ 1urn1s ~l'nior lll:lllager.-. \\he> L'Xl'fl i.-.c top-do\\ n man:1gL'lllL'nt
34 circ Iv pl'rs1sh. lowl'r IL·\ l'b I K'n >llll' l'\ n IL a 1 Thq bil to ptm idl' thl· opportuntty tor lcader.-,hip dcn·l-
COllll' to rl':il1/.l' that tlu-u 111;1hili1y to COl11111Ul11L.llL' opllll'lll 1 ct tho.-.L' .-.;111w manager.., at l' often .-.u1 prt.-.L·d
openly and directly w itl i the k·.1der.-.hip ll'.llll ;il)()ul to fmd :t shortage of people to run cross-function:il
its role 1l1 blockmg strategy impk-mc-ntauon nukes 11 program-. Senior manager.'> point to the paucity of
l11ghl) unl1h.d) th.u prohlc-m-, '' 11! IK· L 01nTled managcnwnt talent :md conclude that lower-IL'\ l'I
F1 uxtr.uc-d. they .rdopt ;1 p.t.-.sl\ l' -t.rnc L' Lo-.1 1s t hc: 111.tn;1gcr.-. ctn t h,llldle mcreascd rl'spon-.ihilit).
comrruuuc-nt of employl'l's lo do L'\ l'l\'th111g in thc-u .\nothlT \ iciou.-. nrck
power lo make till' hu.-.11w.-.s a sun cs.-.
In <>tll' org:tni/:ttion \\L' kno\\', senior managers \\L'rl'
At quill' ;1 Ic-w ot the org:1111/at1on.-. w « studied. the 11l'\\ :thout to ill\l'st w.-.ourl'L'-" in a management-eductl1on
opportunity lo spcah. candidly to xc-ntor 11i.111.1ger-. and .-.uccL·.-..-.1on-pLtnning program \\hen they LIL·uded
rc111\ 1g<>1;11nl crnpl<>ycc.-. 1·.1-.k t(irc<:.-. de.-.L nlx:d i<lllg. I< J li"l' ( )Fp I<> unc< >\er '' hy the company lud lud
c-mouonal mtc-rvu-w s. In one: org.iruv.u ion. u-.h. force dtlfKultv Lil'H·lopmg managers 111 the first place ;\ Usk
mcml x-rs \\ LTL' lX'.-.1cgnl hv unxolrcucd wqu<:st.-. to ill· fOlcc of upper middle m:m,tgcr.-. found that till' t1r.-.t
1nlLT\'iL'\\ L'Li. At I le\\ k-n l'.H Lml"-. '1HSI ). I ill' 1:1.-.h. !J\ l' .-.1knt h.1llers \\ LTL' ':1usmg tlw sixth. Acnird1ng to
torn· th.u \\right and '11-., top ll'.1111 .ippomu-d lo lC>l- L'lllplo\'L'L'.-., lhl' CFO :111d his dtrect rq1orh \\l'lL' an
lc-ct Lbt;1 \\ .1.-. .-.o L'lll't').~l/cd rh.u tl'a111 mc-mlx-r-. :1-.h.nl 11wllL·l'll\L' tl':1111 Thl'! opnatl'd in .-.cp:tratc ftcfdOln-..
f01 pc-rnus-.ron to break w ul: tl n-rr i oh: a.-. rl'pl>lll'l" urn\ ill mg to gi' L' up tlwu hc..,t peopk to lllL'l't till·
.md .-.pl'ah. lor lhcmsL·h L's .rbout lhL· lll'l'ti lor L h:lllgl' lll'l'ds ol otlll't hu.-.i1ll'ss units - even though .-.ud1
Emotion a 1 rl·lca -.cs c.ho\\ I HJ\\ mucl 1 1s xu pprl·.-..-.l'd LIL'\ clopnwnul l''q1criences are widely accepted a.-.
when the .-.iknt k rlkr-, cannot he add1c-..-.l'll opl·nh onL· of thl' lwsl \\ay.-. for an organiz.ttton to dc\l'iop
futurl' rn:1n;1glT.., ' l'eopiL· were afraid 10 di.-.cuss harri-
Quality of Implementation L·rs \\ 11h -.l'nior managers. \\ho were thus prL'\ cntcd
Till' three silent k1ill'r.'> :1s.-.ociatl·d \\1th "L'l1101 111.m- from k:trnmg \\hat \\as blocking management dL·,·cl-
agl'nll'nl mak« 1t vcrv dift1cul1 to dL'\ l'iop 1wnk-d opnwnt. Task-force fel'dhaL k showed that the comp.t-
coorclm.uion ;1( lov, er le\ ch or lo ck-vclop nl'l'Lk'd ny nel'ded rnorl' than nL'\\' human-resource systl'llls
down-the-Iinc ll'ader-.htp c.1p.tl)tlities ,\l1ddll' man- and 111anagcment l'ducation: 11 needed to attack the
agl'r.-. from different function.-.. hu.-.ine.-..-.c.-. or countrv ,.,iJent k1llns
orga1111:atton.-. c.mnot he L''\JX'L tnl lo co!Lthor:ltl'
dTect1vdy w hcn their leader.-. :trl' pu.-.hing ihcm in Six Capabilities Required for Sustainable
competing dm-ctions vhcklk: n1an:tge1s .uc- not grnng Competitive Success
to risk l'l'Jl'Clion h) tlu-h o\\ n ho-.sl's or JX'LT.-. At Why :ire 1he stlen1 killer.-. so penasi\L'' Prohahly
SH~D. the ten-ions lx-twc-en S:tm Scott, to whom till' lwctuse the~ rl'present critical organizational -.1re.-..'>
custo111--.yste111s group n-portvd. .ind John \ ink. head poinh wlll'rl' Ill'\\ ctpahtl1t1es are required to suc-
of H0..I), tru k k-d down until e:ll Ii group \\;ts sure- till' ccssl ull\ tran-.itton to higher lc\·els of performance,
other had till' wrong prioritic--, spn·d and responsi\ ene.-.s

[ lnder:-,t;md1ng Ilic .-.tr:lll'gic dtrl'l'l1on helps 1L·-.oh l' \Ve challl'nged 1hc sl'nior l''(l'Cllt1ve-. at Becton
dilkrcn<Tc. ol per.-.pcl'l1\L' .md lihl'rates the <>1ganu,t- Dickinson to dcscnlll' the kmd of organi1:ation t1l'Cd-
uon lo Ix- purpo-x-Iul and tenaL iou-, Low LT-IL•\'L•I cd to succeed in todays environment of ever mow
111;111ager-. :ire lwtll'r ;1blv to cxerci.-.e independent ;1ggrc.-..-.n c comrx·t 1tor.-. and a dizzying p:1ce of 1ecl1-
judgment 1! tlwy know \\ here till' hus1ne-..-. 1s gomg nolog1c ;ti L h.tngL· The~ -,poh.e in terms ol a virtual

Beer • Eisenstat Sloan Management Review


Summer 2000

-----eup91 igl IL WOO. Alliights resern;ct.--··-·-


company - adaptive, agill'. conm·ctnl w n h .1 ;.p1dv1 \l.111.lgl'l" mu-: [I'-,(' 1li1·11 .uu hoi n , l x n h I!),'-,('( d1rl'l
weh of information. in touch with the cnv rronnu-nt non .111d lo dl'iq.~.lll' .111tl1011l\ 1<) ( IL'.1rl:. .u c ount.rhlc-
They also likened the company to a trauma umt , tl".1111.., Thl· du.ii .1pp1< l.l< Ii Il'(JllllL'" loh < Jf (JJ)l'll
excellent people \d10 arc \\ orking. pL11111mg.m11< )\ .11 ( ()lllllllllll< .iu. >11 .il » >Ill .hlt« t1itIL-, lllL llldlllg d11fll II it IL''-,
ing and making fast Lkci;,ion;, togL·tlll'1. ( >till'I .m.ilo- tr.u L',ii1k· lo till hL' 111 .u uhoru ,
gies included antigen-, ( rcpresc-nt mg out-..1dl' op port u-
nitiex) and the human immune .'>y'>tl'lll U ;,\-tc-m th.it ..,K..,I) -,11uggk·d \\ !111 .. !IHI 1d11111.1IL·h -,unvnk·d Ill,
cm respond in many different ways). m.rn.unns; i lu: ll'll-,1011 1Wl\\L'l'l1 till' ft111< II<lll.d iiIL'I.lldl\
tlut lud \\<l1kvd "" \\L·ll 111Ill"-,1r.1d1t1on.Il ui-u uuu-nt
These images suggc;.tcd an orgarnz.u ion 111 \\ luc Ii tli< )"L' Ji11-,IllL'"".LIHI t l rc: <ill..,, lum uon.r! 1111-.,JI)\'"" IL".1111.<., liil'\
with the most relevant expertise- and inlorm.uion ll"l':llL'd t<) dt'\('iClJl .uu l uupk-nu-nt -,(1.ltl',\.~\ 35
would be able to come together rap1dl\. ,I( r< )..,.., Iv\ l'i.-,
and location.'>. m re;.pon-;c to threat- and opp< irt 11111t 1L·.-,. \\11glit .111d till' "l'lll()I m.ui.uzc-mc-nt IL\1111 h.id .I far
The executives pictured such indr, rdu.il- .ind group-, lllOll' 1111prn1.1111 I<lk· ih.in o\1·1-,1ght ol ck·t:1tl" ThL'\
a;, having the authoritv and rL'.'>Ollrt'L'." to t.il«: .I< t1011 llL'L'Llt·d I<)< l.url , till' ..,tr:lll'g\ .111d lTL'.ltL' .111 org.1111/;1-
As Ray Gilmartin. now CEO of ;\IL-1\ k. '>llggL·...,il'd · .1 t1011 tl1.11 \\<iuld c-n.il ik- IL'"<>llllL'·,dlrn.1t1<i11 de<h1011-,
hierarchy of ideas replace;, the h1n:11dn of po.'>Ili< in.· ' lo l x 111.1dL· \\ 1tl1111 <I"'" 11111\ t1< m.r] hu-,111L'"" 1<':1111"
,·Jo.<.,(· lo till' .ILIJ()ll 'I Ill'\ m it tiiL' "L'lllOI tl".llll. would
Companies can hen ime fa;.t and Jgile only 1f 1I1L' ;,1' d('lillt' li<l\\ muc h h x u-, lo pl.rc c: Oil liutldlllg • urrcnt
silent killer.'> arc met head-on and t r.m-f ll"llll'll 111tc i IL'\l'llLIL'" 11111)11.~h 01w oft c u-iom ..,,..,ll'llh \<., luukhng
the six core capabilities. luuu c- ll'\l'IlllL'" 1l1rrn1.~l1 -,1.111<L11d ..,,..,tv111-.,pl:itforrn
Lit'\ d11pl11L'lll \llll gl\ c-u tl u- Lh n.11111-,Il) of till'..,, -,\L'lll...,
A leadership style that embraces the paradox of JiU-,lllL'"·"· g<Hld \LTtl<.ii llJllllllllllll,ltI<>l1 iil'l\\L'L'Jl tJJL•
top-down direction and upward influence. Till' hu-,111(·-,-, tl':1111" .1ml \\ 11glit.., "L'l110I IL'.1111 \\ ould l'n:1hll'
general manager aLhocatc:-- direction hut k".1rn" Iroru till' "<'111<>1 t,·,1111 to hl' .1hw.1-,1 of p1c1g1L'..,.., .ind .illoc1k·
the feedback of tho.'>L' clown th« line- IL'"' )Ill(, . .., !wt\\ ('('11 l1u-,111t·-,-, IL".lllh .IL l()td111gh

Clear strategy, clear priorities. The top tl'.1111 for-


mulates the strategy a.'· a group and '>J)L'l1d"-,1g11d 1- What Can Be Done?
cant amounts of time d1.'>cu;,;,ing it \\ uh I<)\\ l'I k·\ l'b. \\l' 11.I\ l' oh-,LT\ ('d 1111< l' d1..,1111ct "'"J)()!l'-,(','-, to ihL'
-,1iL·11t ktlkr-, ~-.II <llli.Illl(' lll.111.lgl'Il;d IL'pi.1< L'lllL'llt
An effective top team, whose members possess a .l!ld l'llg.Igl'llll'lll \ltiJu11.~Ji l'.IL iJ IL''-J)<>l)"L' 111.l\ J)l'<l\l'

general-management orientation. 'I Im )ugh ( ')11- "lll ( L'""rul Ill ..,, )!\IL' (Ill lllll>i.ll)( l'>. d11n t L'llg.1gl'll1L'l1l
structive conflict, the team arnv L'" at a L c Jill m: in \<)!CL' of till' h,1Jrll'l" li,1.., till' J,, . ..,l di.111< l' of hutldlllg long-
and creates and maint.un-, the organi/,1t1011.il C<lllll''t tLTlll l'<>lllJlL'tlll\l' < ,1p.1Jid1til'"
needed to implement ihe ;.trategy
Avoidance
Open vertical communication. Till' top tv.un ;1ml It 1.., nut -,u1pn-,1ng tll.lt 1n11-,1 <.F< h .111d till'\\ "L'lll<ir
lower le\ els are engaged in an opL·n d1;ilogt1L' .ibout 111.111.lgL'llll'llt
tl'.1111> .I\< Jid l'llg.lgL'lllL'lli Jll<.,l'Clll"l'Ill.Ill·
the organization's efferttv cness .lgl'I,.., .ll'l' .1pt '"I IL'\\ ()j)l'll ,1i..,L·11-,-,1cm llf illl' -,1knt
killl'I.., ,I.., .I ( l1.1llL'llg(' l11 tlll'II .1111liont\ \nd \\11.ltL'\L'I"
Effective coordination. Effect in· tc.unv, c i1 k 111t('- 1 I 1 L' \ , 1 rL · \\ ' m 1 n I . ii H 1111 Ill' .11 111.~. cl()\' 1 H I 1 L · - Ii 1 w 111.111-
grates activitres around cusronu-r-. products . ir m.irk c-t ..., : 1g,·1.., .llL' \\!lrill'd .1hciut il'll111g \\Ii.it ii till' CFO ;1<h
acrosx diverse functions. localnu- ..., and Jiu..,1nL'""L'"· tlJIL'.llL'Ill'd l'lllii.11 r.1..,-,nJ or d<"iL'lhl\ L'1 Cll11fro11t.1l1011
(.Ill I)(' ..,(.II\
Down-the-line leadership. M1d-k·\·L·I ll1;111:1gl'r..,
with the potential to develop leadcrvlup .'>h.db.111d l ·..,n1g co11..,ult:111t
..., 1-, .t pup11L1r \\.I\ to :1\ 01d iiol1L'"t
a general-management per~pcct1\ L' .m gl\ L'll ( IL·ar l'llg.t,~l'llll'lll (:1 llhliillll.~ I" ,I llll1itd1dl11 >ll d1 di.11 lllLill-.,-
accountability and authority. lr\ .111d gt<l\\ 111g. ,lillJ <>Ill IL'"l'.llt J1 "llg,~L'"I" il1.1l .I
rL'a<.,()Jl fol till' h()(lll) ]<., l.ltll L()Jlll<.,J()ll lll'l\\L'L'll (())1-

To develop such cap;1hilit1es. hiL'rard11c;d mg.m1/.1- '-,\ilt.tnh .111d t1ip 111.111.1g,·11w111 \" .1\1)1d L'l1g~1g111g tlw
tions must he managed in a non.uuhont.u ian lll:Il111LT -.ik·nt kilit-1-, ·

Sloan Management Review Beer • Eisenstat


Summer 2000

------copyright 2000.
All rightsreserved.
One of our research ;.,tics wa-, a highly regarded tech-
nology company we will call "Clupco " The C:EO Consultants and staff groups have
he! ieved that the flaggmg pace of Chipcos product
development (its key to succcss ) was the reason that numerous incentives to maintain senior
growth was heginnmg to plateau. Although he could
see that a "silo mentality" wa« sabotaging croxs- managers' dependence on them.
functional teamwork - particularly between market-
mg and the powerful R&D department - he did not
address that problem directly. Instead. he called a Certainly, confrontallon 1s ;,cary. Clupco's CEO wa.s
consulting firm. loath to confront the powerful R&D vice president
36 and the company's deeply engrained functional
The consultants recommended a system that would nundser. Although it 1s a normal human tendency to
he driven by cross-funcuonal product-development xhrink from confronting 011< ..''s own deficiencies, lead-
teams and overseen by a committee of functional ers do so al the peril of their business.
heads from R&D, manufacturing, marketing and
finance. After extensive interviews, discussions and Consultants and staff groups have numerous incen-
education, Chipco charged ahead with the plan rives to maintain senior managers' dependence on
them for change programs But 111 failing to addres;,
Two years later Chipco turned to OFP The unsurpris- root <..a use.~ of problems, consultants and staff groups
mg discovery: Everyone thought that although the prevent organizations and managers from learrung
consultants' system had the potential to speed produc t how to learn
development, the potential was undermmed hy the
functional silos. In particular. the mighty R&D function Managerial Replacement
undermined the marketing department. When attempts to bypass the silent killers fail. the
likelihood that the CEO or general manager will he
Although the consultants' system called for a oross- replaced increases." Managerial replacement can he
functional review of all new projects for both tcchni- an dfecti\·e process for addressing the silent killers
cal and marketing viability, the review committee had New general managers are not directly implicated 111
difficulty saying no to anythmg the powerful R&D the problems of the old regime and find it easier to
director supported. A" a result. too many projects surfa<..e ludden issues. Their mental models and rela-
were chasing too few resources. Moreover, market- tionships with key managers are not constrained hy
ing's weakness wa;., undermining new-product the past. They can - and often do - replace other
launches. managers and initiate a new direction :"

The leaders for approved projects expressed frustra- At first, the organization may he open to such change.
tion that functional heads assigned people to the team hut without ongoing identification and discussion of
who were .. B" players or already overcommitted. the silent killers. the honeymoon will end. The nev,
Leaders complained that team members often skipped leader will become closely identified with the new
meetings because of functional responsibilities. business direction and organizational arrangements,
which 111 turn will run into difficulties as the husmess
Team members (particularly from R&D), whose func- env ironment changes. Once agam, employees at lower
tional heads were not ceding authority, had difficulty levels will he fearful of identtfying the silent killers If
committing their departments to v, ork on projects the new general manager's approach b to replace
Team leaders had to go directly to those functional staff rather than engage in open discussion, seruor and
heads. lower-level managers who want to speak up may
worry that they will he shown the door. As upward
Why did the consultants · new product-development commurucation falters. the organization 's ability to
system, with all its great potential, go astray? ThL' sclf-corrcc t will deteriorate So although replacing the
answer: management by avoidance. Consultant- or CEO c an he ;111 effective way of ac.klres..;mg the silent
staff-group-driven change efforts are successful nuun- killers 111 the short term, it will not build the embedded
ly at helping managers avoid what cannot he avorcl- organizational cap:1bd1t1es that prevent the barriers
ed. the silent killers of strategy rmplemcnrauon from recurring Other costs include damage to morale

Beer • 6senstat Sloan Management Review


Summer 2000
Cup91 iglil ~000. AttTtgtrts'reserved.
and the lo~~ of the manager's busmess-sperrfrc The Principles of Effective Management
k.now ledge, experience and Iongstundmg rclationxhips Etfcctin: leader~ of organizanona! change intuitively
follow the nccc~sary :Kt1on pnncrplcs. I 'nfortunatcly,
Engagement tlwrv·~ a '>hortage o! <uch pcopk-." And even it orga-
Our research points to engagement a~ the best alter- nizauon ..., have ,1 natural leader. they lo.'>L' the capahili-
nativ e to avoidance :111d replacerneru of manager~ If tJL'~ when the k·Jder lea\ L'~ \X'hL·n nexv barncr-, arise.
senior rearn-, and lower-level -tuff together confront org.uuvauon-. will not ha\ e learned how to confront
the stlent killer-, anti build up the org.uuv.uronal the ~tr.1tl'gy-hlock111g k ilk-r ..., on their 0\\ n A disciplined
capabilities that are tle barrk-r-.' opposues, comparucs and institutionuh-c«] lvarrung procL'.'>~ 1 ..., required.
can achieve .suxtain.rbk. cornpctirive adv untugc.
One of the IL'\\ compn-hcnsrve orguruzauonal learn- 37
Because till' sik-nt-krllcr syndrome reprc~ent.'> deeply mg toob 1~ Ccncral Elcctru .., ( <,; E) Work Out process
ingrained bchav ior, the cure nL'Cl'~~tlatL'.'> large num- .Jack \X'ckh used n to build organu;1tional capabilities,
lx-rs of people actmg in very different way... Anyone and he fully ex1x-ct.'> it to he .'>elf-~u~taining when he
who ha ..., tried to addrcs ..., unproducuve hut long-prac- ret1rc.'>. OFI'. \\ ith its .'>tratcgJC and systcm«: focus,
ticed behaviors among family mcrnlx-r-, or lncnds otfcr~ another good \\ :t\ lo attack srlent killers.
know ~ that bchaviora I change doc~ not occur in a
ximpk- and lmcur manner Progres ..., rL'qu1re ..., all par- Man.igc-r ..., m.r, lmd rt helpful to observ« hov, Scott
tie~ to L'ngagL' in surf.u ing and di..,cu..,~ing unproduc- \'\hight u~ed pt oftling cit I le\\ k-u Packard's SHSD
ti\ c hehav ior~ and to reflect and learn from their col- to tuckk- the ~!'; sik-nt killer'> and turn them into
lective effort.'> to chanue." Leaders must direct a CIJXI bilitu-s. '
lcarrung proce~~ from which till') ul-o learn.
Fortunately, for eaL h xik-nt killer there is an action Principle 1: Turn Top-Down or Laissez-Faire
principle that directly addres ...,e~ the dysfunctional Management Style Into Engaged Leadership
behav ior and hurkl-, :1 corre .<ponding organizational \X1nght and hi-, -cnior team decided to u-«- profiling
strength (Sec "Attacking the Six Barriers to Strategy after recogni/.ing th.u the ~tratcgy \\as not being
I rnplementark in ... l impk-nu-ntcd and th.u morale \\;!:-, low The cross-

Attacking the Six Barriers to Strategy Implementation


Change starts with the leader

The Silent Killers Principles for Engagingand Changingthe Silent Killers

Top-down or laissez-faire senior With the top team and lower levels, the CEO/general manager creates a partnership built around the
management style development of a compellmg busmass rnrecnon. the creation of an enablmg organizational context and
the delegation of authority to clearly accountable mdivrduals and teams

'
Unclear strategy and conflicting priorities The top team as a group develops a statement of strategy, and priorities are developed which members
are willing to stand behind

An ineffective senior management team The top team. as a group, rs involved m all steps 111 the change process so that its effectiveness rs
tested and developed

Poor vertical communication An honest. fact-based dialogue rs established with lower levels about the new strategy and the barriers
to «nplernentrnq rt

Poor coordination across functions, A set of busmess-wide uutratrves and new orqaruzational roles and responsibrhties are defined that require
businesses or borders "the right people to work together on the right things m the right way" to implement the strategy

Inadequate down-the-line leadership Lower-level managers develop skills through newly created opportunities to lead change and to drive key
skills and development business uutratrves They are supported with just-m-ums coaching. tra111111g and targeted recruitment Those
who still are not able to make the qr.ide must be replaced

Sloan Management Review Beer • Eisenstat


Summer 2000

------'f'Mcpyright 2000.
Allrightsreserved:
strategy and to agree on a statement they could pre-
Many managers approach strategic "l'llt to the org.mization ll was then that Wright
lvanwd I hat his view ..., about the strategy - and the
change with the assumption that liuc.inl'"" tl'amc. creatl'd to enact it - were not shared.
The top team h:td avoided strategJC issul's and the
employees are barriers. Our research co11f ltct mhl'rl'llt 111 thl'rn, o.;o 1t had failed to cll'velop
.1g1 t'l'Jlll'llt (in pnontil''i to guide resource allocation.''
suggests the opposite.
Till' 1m·111lwr..., of t!tl' top team were ac.ked to w1ite
Iun. IHHJ.il t.ivk Ion L' 1lw\ .1pp<>1r11nl 1q1ortnl l i.u l, till' -,11.ttl'g\ nmct..,l'ly and to develop an l'xpbnation
38 011 co11f!tt ,., lwt\\l'l't1 11111< 11u11., .u u l the·\\ 1tlc·.,pre·.1d .tl)()Ul \\ h) tt \\ ,1..., 1111po1 t;int to achieve it. Later. when
ill'lwf tl1.11 dl'l l'dOll'> ,,,.1,· lwi11g 111.1de· of l-Iui« u.-,k-ft >I l t' llll'lllherc. conducted interv1ewc.. they began
\\1th tlut c.ton SHSD employee:- s:ml 1t w:1s the firc.t
\f(LT \"l'l l'I\ t11g till' knJIJ,JL l, \\ 11gl u 111< )\ l'd iiL'\ ond t 11m· t I Jl'\ h;1d hl'l'll told about the strategy: many dis-
111., .IL'Cll.,lOtlll'll .rv orcl.m. L' ol l llilil1c I lo dill't lh .tgl'l'l'li \\ 1tlt ;1c.pl't L., ol it Their feedback wac. vital in
l'llg.1gl' lit.., top ll'.llll Ill l1.111k d1.,lil'"l<>ll" about t hc: hl'lp111g thl' top tl'.tlll clarify and rl'fine the strategy.
di\ 1.,1e>11· .., .... t1.1lt·g1< .md 111.~.1111/.1111 u r.i l p1()hll'lll" I le:
li.td m.n k: .I \'l"thlc C<•llllllllllll'lll It> "l'l'k111g th« unv.n Principle 3: Turn an Ineffective Senior Management
111..,lil'd truth .. mcl tl n: t.ivk f, i1, ,· g.1\ t ' hnn ;1 ric Ii :111d Team Into an Effective One
t<>lllprl'iil'n.,i\l' uport ih.n \\,1., clrl l u ult tc> tgnotl' \\'1th \\right .111d Ille. ·"l'Tllor tl'am involved in every
"'l'Jl of t!tl' cli;111gl' - 111duding strategy develop-
"I h.u l known 1k11 thc1l' \\l'tl' .,<>lilt' "''J ICJLI., tc. ..,lll' .., 111 llll'llt. < >tg.1111!'.:tt H mal dtagnoc.is. :Kt ion planning. com-
till· di\ 1.,1011 th.u 1wnlnl lo Ill· ;1dtlrL''"''d.· \X'nglll .,,11d 111u1l1l ;1t 111g thL· change and mo111toring it - they had
·But \\ hen thc-«: prohk-m-. \\lTl' "Jldlcd out 111 dc-t.ul to \\ ork togl'tlwr.
to me .md Ill) .... t.rll ll\ a group ol L'lllplo\l'l'S. rlu: _..,1l-
u.1t1eJ11 look on .1 \\ hol«: Ill'\\ lighl Sollll' ol the 1.1.,k- 'I ht·~ .1 bo undnwl'nt intl'rviews with the authors.
l orc c: kl'dhack d11v< tvd .u me- ;111LI tll\ .,t.Jft \\,1.., ptl'll\' c )u1 knlh.1t k. addl'd to that of the task force, led
h.ucl lo .... \\;tllel\\ Fr;111kh. I .uu 11<>t -ur«: I \\tJldd h.rv« to dl'l'p. c.l'ard1ing ll'.1111 discusc.1ons of Wrigh(s
Uken ii ,1.., .... tTiouc.l~ ,1.., I did ii the >.,l' rc-m.irks h;1d dL·nc.1011-making ,..,tyll'. his aversion to conflict and his
l xx-n Ct>llllt\~ li om .1 gtoup ol t>llhtdl' c onxult.mt« toll'r.11Kt' of thl' cold war between R&D and manu-
l;1ctu1111g n1.-,101n 'i) stl'lllS. At a critical moment, Sam
P:trl11LTc.lllp \\ llh lo\\l'J ll'\l'b \\'.le. c.o!tdi!Jl·d .illl't Sl ott. till' lll';td of 111.1nutacturing. admittl'd: "I didn't
\\'nghl ;1nd 111.-; ll'.1111 .1-.knl the: Uc.k lorcl' lt> cv.rlu.uv k no\\ I ill' pt ohlcms l \\ ac. c;1uc.mg. ·· The sincl'rity of
the changL' pl.in the lop u.im dl·\·elop,·d Af tcr c au- lrn; tonl' c.t:1rt1L·d l'veryonl', and the trust needed for
cu ..,mg ;J!otle, t lu: t;L<.,k f01 l l' l'L'i urned \\'II h -« lllll' Clll- an opl'll dialogul' \\ac. created The senior managers
d td crtt icixm \\'right l''-l)('rll'l1l t•d that kl'dhack .tc. till' l'llded up complctely redl'signing the way they
wor ...,t d;J} m hr-, 111' t .trt't't But he m.rch: .111 1111por- \\ ou Id \\ ork togl'ther
t.int and cour:tgeou.., dl't 1-,1011. Ill' ;1.-,knl t:Jc.k 101 n·
mcmlx-r ..., to p.uucip.uc: \\ ul: ',('111()1' lL'.1111 nu-mlx-r» Ill i\l'\ c·t 1hL'lec.c.. cli;mge takes time. As one tac.k force
dl'\ eloping ;111d evaluating al1,·rn.1t1\ l''>. Till' nsu lt llll'lllhl'r oh-,l'n L'd two yea re. aftn thl' profile, "Our top
\\;\..,an improved dungl' pl.in th.it had the ,·011111111- tl'a111 hac. takvn .o.;ome big ,-,tridl's in becoming more
mcnt ol both ih« top tc.1111 .ind till' t.r-], lorcl'. ,.11,·,·t I\ l' Scott l\X:right] loob to be taking more control
ol thl' rl'inc. .tml hl'U>lllt11g till' kmd of leader the di\i-
M;111y managvr .., .rppro.uh -,tr;1tq.~1,· cl1:111gl' \\ uh till· c.1<>ll t1l'l'd .., I IL' .1ml his .'>taff will sit down ac. a group
ac.-,u111pt1on that l'lltplo\ ,.,.,, .Jrl' h.11T1lT., < )ur rl'c.t·,11ch nm\ .111d t;tlk ,..,trategy, where beforl' thl'y \vould have
c.uggl'."t." thl' opposite- whc-n properly rnvolvcd. they onlv t:ilkl'd about administrative detail. But they are
l x-c 0111t' true p.utuc-r-, -,ttll not \\ ill'rl' tlil'y \\ ;111t to he as ;1 ll'am. They c.till
"l'L'lll to ht· h;1v1ng a tough time gl'lting togl'ther and
Principle 2: Turn Unclear Strategy and Conflicting rL·ally comtng to agreement ovl'r some tough and
Priorities Into a Clear and Compelling Business Direction P"'""ing j-,-,ue.., I think people in Sl\SD ·wanted :111
To l.11111t 11 'l1.111gl' .u '>l{~I i, \\ 11gltl .mcl 111.., l< >Jl lt'.1111 1 '' l't 111glll 'h.111g~· 111 thl' top team's behavior. But,
met oll-viu: to die.cu..,,, tluu oxvn unck-r-tanding of till' rl'.ili ..,t1c1lly, rnoc.t good teams arl' not made in a day."'

Beer • Eisenstat Sloan ManagementReview


Summer 2000

Ccrpyligl1t ~000.All 1ights·rese111ed.-·--


There are no qurck fixes. OFP is often a painful align the different parts of the organi/unon I think
pn>ll's". hut after m:111age1 .... rev cul th« si'\ <ik-nt killer ..... th.u till· .ihunnicn: \\ 1.· ll<l\\ h.r, L' .ilu-r the reorg.m11.a-
moxr :trL· dctL't nnru-d to u kc :tel ion tlllll 1.., both accu1:1ll' .md nl'lL'"":tn frn us to IK'l'<>111L'
:m dkctt\ t' organi1.1t1<>11. In thl' -..111,tll systems huc-1-
Principle 4: Turn Poor Vertical Communication Into an lll'"" th.it \\ L' h,1\ L'. tlww ,.., no \\ .1y of getting :1round
Open Fact-Based Dialogue till· 11ut11'\ c-tlllltu11.· In tlil' p.t.,t. tlil·rl' \\:t.-.. no dl·.tt
T:1..,k for. l' mcmhcr-, at Sl{SI) \\ ere- L'Jll'rgi1nl h\' their k·\ l'l ol top-m.1n.1gc·1111.·n1 r,·..,pon-..ihilll) .md O\\ lll'r-
ch:1rgc to find the "unv.u ni-hcd u uth .. \\'hl'll top- .-..l11p lot kl'\ dL'l'ISJ<ll1 111.lklllg
tc.un mcmlx-r-, rcfr.uncd lrom Lk·kn..,l\l'JK'..,.., or u-u i-
button. tru-r :111d comnuuuc-nt rL'\ J\ L'd tl u ouuhour till' Principle 6: Turn Inadequate Down-the-line
< >rg.tnt1.:1t1< >t1 Leadership Skills Into Strong Leadership With a 3£
General-Management Perspective
.\-.. <>l1L' mcmbci of the- top team nu-mlx-r nx all-, "Till' illlT1.':l'-lll.l-(h tiil' 1111pk·111t'lll.llllln <>I ,-.,tr:lll'g\' rL'(lllirL'"
t.ivk forcL' kL·dhack n.·:dl) .-..L·n cd "l'\ er.rl unport.mt Jll( )I(.' 111.111.1g1.·1 .... It h )\\ l'I k·\ d ... \\ho Liil k·:td ll':1111.-.
rolc-, \iot only dtd 1t function "" .t p<>\\ crtul tool to tl1.1t l'<>o1dm.1tl' kl'\ "tr.lll'gll lllll1:1l1\l'" .1noss lunc-
comrnunican- dillicult 1-..sul's, hut fl .rl-«: -..he>\\ L'd th.u 11cm-... hu.-..tlll' .... .., u111h or gl'ogr:1pli1c horLk·1.., Tlw
the top team c1red .ibout \\ h.u the- L'lllplo~ L'L'S pn >l L'"" SRSI) 11 >Ile>\\ l'li 1.·nli,t1H 1.·d k·.1lk·r-.,htp dL'\ de >p-
thought .md that w« ,_·oukl not in-t nutc .t L h.mg« llll'lll Th1.· u-..k lc>JlL' p1udu,nl 1.·1gl1t j)l'<>pk· \\ ll() lud
pn>Ll'S."> \\ ithout askmg fo1 thvrr input. Abo. I hdil'\l'. \\<>rkl'd l lO-.,l'J\ \\Ith till' l<>p ll'.llll -- .I .'-lgllJiJl:lnt
h) a.-..k111g Ior tlu-u ·un\·:1rnislwd' opinion .... the l11,l11:JgL'llll'lll-d1.·\ l'I< >j)llll'llt l''\]X'l IL'lll l' th.it l h:mgnl
l'lllployl'l''-, rL·:tli1L·d Jl.SI how '-,L'liou .... \\'l' \\ l'l l' .il )OU( lliL'lt <>\\ll jll'i"jWlll\l' .tnd till· fll'l''-j)L'lll\l' ol till·
llllprrn mg SRSI)'-., dkctt\ L'ne-...., Tu Scott l\\'nght]'-.. "L'l1l<>r tL·.1111 .1ho11l 1.·mpl<>\l'l' t.1p.1hd1t1l· .... :\ llll'lllher
credit. he proh.ihly took till' lll<>.-..t amount of nxk 111 ol tlil' lop tl·.1111 n:111.llk1.·ll. Th,· \\<>Jh. th:1t till·
1111ti.tt111g a procc-..s hl«: thi..., I le .1ctL·d ac- .t lmchpin. l'lllplo\ L'l' l.l'-k l<>Jl l' did \\ .1.., L''\lrL'lllL'h· 1lllprc-...-. 1\l'
and wirhour lux im olvcmcnt. a pn>cL·.-. .... like- tlux TiiL'\ opl'1.ltL·d Jlllll Ii hkl' .1 p1oll·..,-.,1on.d con-..ultlllg
\\ < .ukl h.r, l' lxx-n <pinninj; 11.-.. \\ lu-cl-; .. t11111 l'Vl'J)l. 1111l1kl· l<1n-..11lt.1nh. till'\ \\l'Jl' .1 p.trt ol
thl· <>rg.1n11.1t1on :md kll1.'\\ It lll'>Jdl' ,md out I thlllk
Truthful cmplo~cL' kedlulk n-lvv.mt to ">lr:1LL'g\ :111d till'\ \\ 01 knl ... o \\ l'il togl'llttT ht'l ,JU-..l' till'\ lid1L'\l'd
hu..,inL'c-" pertonn.mcc l'.ll1 gt\ L' lllan.1gL't" LhL' nL'l'liL·d in \\ h.11 till'\ \\ l'rl' d< >lllg
pu-h to manage t h.mg« through open eng.1gL'llll'llt
\\'ii Ii illl rl'.lsnl L onlidL'nl L' 111 le>\\ L'1-le\'L'l 111a11:1gcrs.
Principle 5: Turn Poor Coordination Into Teamwork -..cnirn 111.m.1gl'r.-. hl'l :1111t· mnrl' \\ 1llmg to dl'IL·g:tll'
Through Realigning Roles, Responsibilities and :1utlmrll\ to lhl'lll .1-.. Jlll'llllwrs of hu">llll'."" learn.-..
Accountabilities With Strategy Thc>-..l' tL'.1111..,. lll turn. pr<>\1dl'll addJt1011;il opportun1-
Follo« ing kl'dhat k Iom till' task force, \Vnght arid tll'" to dl'\ l'lup de>\\ 11-tltl·-ltm· ll'alkT-..lup '>kills :md :1
his te.un L'ngagL"d lll .1 root-c-ausc diagnoc-is. Thcv gl'lll'r.tl-111.tll.lgl'llll'lll jllT"]Wl (J\ l'
condudl'd that many of their problem .... had tlu-ir ori-
gms in till' nuxmatc h hctwcc-n JJl''.-..1radJtional approach
lo organ11111g and lllanagmg tis uistrumcnt hu-..illl'""l'.-.. Can the Silent Killers Be Overcome?
and the demands of their current hu-..l!le">c- < h·L'r :1 ThL· l'\ 1dl'IKL' lro111 ou1 rl'..,l'.lll Ii 1nd1c1tl'."> th:11. \\'lll'n
two-dav j)L'liod \\'nght and Ins team redesigned tlu-rr a top te.1111 lollcl\\.., tht· '-I'\ prnlL ipk·-.. tor<>\ L'rcrnrnng
orgarnzauon They ch>."L' to shit: Irom tum t ional . . ilo-. thl' ..,jlcnt kilk·r.-... 1t lu-.. a good L hancL' ol dL'\ l'loptng
O\ crl.ud \\ uh weak tL':Jllls tu .1 xtructurc k:1tu1 ing :111 org:ll1i1c1t1011 c1p.dilv ol both -..tr:ttl'g\ 1111pil'nwnta-
.">trong l ro.-s-functronal busmc-c- tL·.1111.-.. :1n < .untul ilc 11on :1llll k·.1rnmg '\L·d B.trnholdt - Jl<l\\ CFO ol 111''-.,
lor prol1tahilit). Till' 11L'\\ m.u n-, structure \\ :1.., quire- "Pill<>ll .\gill'nt Tl'd111<>l<igiL'" .111d l'c>J'JllLTh thl' 111'
.ilu-n to I ll''s tradiuon c il org.tni1.ing businesses mro L''\l'ClltJ\ L' \\ llh o\·cr ..,1ght n·-,pon-..1hil1t\ lor SRS[) -
autonomous dtvision- .. hut Sl{SI) JK'l'lkd :111 org:tn11:1- pr.t1..,L·d '-,j{SI)'-., L lungL· dtorh "Thl') ILl\l' dc>nL' :1 tl'l-
t 1011 that fn 11.-.. ..,lr:llL'gy ril1l 1oh .tltl'r .1 \l':11 or .-..o <>I -..1ruggling to f1gu1L· out
\\ h.1t till· hu.-. ine.-..-.. \\ :t'> and hcl\\ to gl'l It going Today
One \ c:1r later. a prcx lucuon ruan.igc-r comnu-nu-d, I "l'l' tlw111 .1-.. Olll' ot our ..,I.JI d1\ 1-..1011-. Colllp:1rL·d to
\\ h.u \\:ts rl':dl] important \\:t.-.. that \\L' re.ill\ under- otlll'r dl\l"l<>ll-... It.'> p11ih.thh lhl' lll<>'>t dr.tlll.Jtll
stood w ha: the proce-...-, \\:L'- trymg to do - that is, improH·ment '\o\\ they are one of the top divisions

Sloan Management Review Beer • Eisenstat


Summer 2000

'Copyriqht 2000:"Alnights reserved.


in terms of growth and profitability and return on f.uth that huildmg organizational capabilities is key to
assets, as well as customer sat1stact1on Today SRSD a high level of performance He or she must be will-
represents best practices in a lot of areas. They have tng to learn and must believe in partnering with
really turned weakne;,ses into strength« This ts not to cmplovcc-, It 1s ca;..1er for recently appointed C:EOs
;..ay they don't have issue». They need to work on or general managers to confront the root cau;..es of
rc;..ource pl.inning and Ix-mg able to schedule rc.'>ourccs blocked srrategv implementation in their !1l'\V orgaru-
and live up to commitments. But even in that area, zations because they have fev, er reasons to worry
they arc doing better than our other chvrsions " that they will he personally implicated But when
general managers of longer tenure, such a.'> Scott
Ctn all organizations overcome the silent killers? Our Wnght, summon till' courage to directly confront the
40 reve.rrch suggl'.'>ts not. Certain conditions and values silent killers, their world view as well as their k-acler-
must come together to motivate a manager to pro- ship style is likely to change Wright gained a para-
ductively engage the harriers. There must be a com- doxical and valuable msight· being vulnerable can be
pelling bu-.incss need. Till' CEO must have some a vource of strength and influence.

Additional Resources Organization" (New York Harperflusmnss. 1990) MW McCall, "High Flyers Developing the Next
• 4 R B1ggad1ke, "Research m Managing the Generation of Leaders" (Boston Harvard Business
Resources not mentioned 111 the footnotes but use- Multinational Company A Practtroners School Press, 1998)
ful for mterested readers mclude the 1996 book Experiences," 111 "Managing the Global Firm." eds • 15 M Beer, R A Ersenstat and B Spector, "The
"Ilrqaruzatronal Learning II Theory, Method and C Bartlett, Y Doz and G Hedlund (London Critical Path to Corporate Renewal" (Boston
Practice," by C Argyris and DA Schon An article Routledge, 1991 I Harvard Business School Press, 1990)
m the November-December 1990 Harvard Business • 5 J Pfeffer and R I Sutton, "The Knowing Doing • 16 Beer, Frsenstat and Spector, "The Critical
Review, "Why Change Programs Don't Produce Gap" (Boston Harvard Bus111ess School Press, 2000) Path to Corporate Renewal," 1990
Change," by M Beer, RA Eisenstat and B Spector, • 6 M Beer and RA Ersenstat. "Developmp an • 17 D Dunphy, "Embracing Paradox Top Down
describes the fallacy of programmatic change and Organization Capable of Strategy Implementation vs Pa.ncrpauve Management of Orqaruzaucnal
makes an argument for a deeper look at barriers A and Learning," Human Relations !May 1996) 597-619 Change" and W Bennis, "The Leadership of
spring 1995 Cahlorma Management Review article • 7 M Beer and RA hsenstat, "The Silent Change," 111 "Breakmg the Code of Change," eds
by 0 Harnhnch, "Fragmentatmn and the Other Kil ers Overcoming Barners to Orqanrzatmna M Beer and N Nohna (Boston Harvard Business
Problems CEOs Have with Their Top Teams," relates Fitness," working paper, Harvard Business School, School Press, m press)
directly to our own fmdmgs K Eisenhardt. KM Boston, Massachusetts, 1996 • 18 C Argyris, "Good Communication That Blocks
Kahwajv and L J Bourgerns m "How Management • 8 D Hambnch. "Fragmentation and the Other Learning," Harvard Business Review 72 IJuly-
Teams Can Have a Good Fight" 111 the July-August Problems CEOs Have With Their Top Teams," August, 1994) 77-85, and
1999 Harvard Business Review discuss problems of Ca.rlorrua Management Review 37, no 3 (Spring E Shapiro, RE Eccles and TL Soske, "Consulting
top teams and what to do about them L Hirschhorn 1995) 110, and Has the Solution Become Part of the Problem?"
and T Gilmore's "The New Boundaries of the K Eisenhardt, K M Kahwajv and L J Bourgeois, Sloan Management Review 34 (Summer 1993) 89-95
Boundaryless Company" 111 the May-June 1992 "How Management Teams Can Have a Good Fight," • 19 Carol Hymowitz, "How To Tell When a CEO Is
Harvard Business Review addresses the deeper Harvard Busmess Review 75, no 4 (July-August Toast," The Wall Street Journal, April 18, 2000, p Bl
issues that must be confronted when orqaruzanons 1999) 77-85 • 20 J Gabarro, "The Dynamics of Taking Charge"
transform into team-based, flexible organizations • 9 M Beer and G Rogers, Hewlett Packard's (Boston Harvard Business School Press, 1987). and
Santa Rosa Systems Divrsmn IA) "The Trials and B V1rany, M Tushman and E Romanelli, "Executive
Tribulations of a Legacy," Harvard Business School Succession and Orqaruzatronal Outcomes m
case no 9-498-011 (Boston Harvard Busmess Turbulent Environments An Organizational Learning
References School Publ1sh1ng, July 19, 1999) Approach," Orgarnzatmnal Science 3 IFebruary 1,
• 10 Ibid, 1992) 72-91
• 1 M Beer, "Organization Change and Eisenhardt et al , "How Management Teams Can • 21 P Senge, "The Frith Disuphne" (New York
Development" (Santa Monica, Callforrna Goodyear Have a Good Fight" (1999). and Doubleday, 1990)
Publ1sh111g, 1980). and P Lawrence and J Lorsch, "Drqaruzanm and • 22 John Kotter's research has documented the
N Venkatraman and J C Camillus, "Exploring the Environment" (Boston Harvard Busmess School shortage of leaders m corporations and his recent
Concept of 'Fit' m Strategic Management," The Press, 1967) book documents the errors managers make 111 lead-
Academy of Management Review, Mrssrssipp • 11 M Beer and M Gibbs, "Apple Computer ing change See J Kotter, "A Force for Change"
State, 9 (July 1984) 513-526 Corporate Strategy and Culture," abridged Harvard (New York Free Press, 19901
• 2 M Beer and A Williamson, "Becton D1ck1nson Business School case no 9-495-0441 (Boston • 23 See M Beer and G Rogers, "Hewlett
(Al Corporate Strategy and Culture," Harvard Harvard Busmess School Pubhsh.nq Corporation, Packard's Santa Rosa Systems Dtvrsrnn (Al) (A2)
Business School case no 9-491-151 (Boston Harvard 1990) (A31 (A41 and (B3)," Harvard Business School case
Busmess School Pubhslunq Corporation, 1991 I • 12 SW Floyd and B Woolridge, "Managing no 9-498-011 (Boston Harvard Business School
• 3 M Beer, R Ersenstat and B Spector, "The Strategic Consensus The Foundations of Effective Pubhshmq, 1997)
Cnucal Path to Corporate Renewal" (Boston Implementation," Academy of Management • 24 H M1ntzberg, "The Rise and Fall of Strategic
Harvard Busmess School Press, 1990). Executive (November 1992) 27~39 Planrunq Heconceivmq Roles for Planning, Plans,
G Hal I, J Rosenthal and J Wade. "How to Make • 13 Beer and Gibbs, "Apple Computer," 1990 Planners" (New York Free Press, 19941
Reeng1neering Really Work," Harvard Busmess • 14 MW McCall, "The Lessons of Experience
Reprint 4142
Review 71(November-December1993) 19. and How Successful Executives Develop on the Job"
RH Schaffer, "The Breakthrough Strategy Using (Lexmgton, Massachusetts Lexington Books, 1988). Copyright © 2000 by the Sloan Management
Short-Term Success To Build the High Performance and Review Assocration All rights reserved

Beer • Eisenstat Sloan Management Review


Summer 2000

Copyright 2000. All tigt'lts"rese(iil!Rl."·