Put Your Fears on the (Boardroom) Table
When Alan Mulally became CEO of Ford in 2006, he was walking into a bad situation: the company was struggling to become profitable and facing declining consumer demand and a growing global recession. Mulally knew that for Ford to survive it had to reduce cost and complexity by beginning to act as one global company with shared car platforms, suppliers, etc. To make this happen, Mulally would need his currently siloed leadership team to drive collaboration across their various divisions and geographies, and he knew that for his leadership team to operate cohesively and run "One Ford" they first had to start communicating honestly and openly with one another about the business. Although Ford had many meetings that could serve as a venue for this type of interaction, it simply wasn't happening so Mulally scrapped many of the existing meetings and operating mechanisms and instituted the Business Plan Review (BPR) meeting.
Every week Ford's entire senior leadership team would gather to report on their progress toward the company's turnaround plan. They used succinct, data-driven, template-guided reports intended to quickly educate everyone on the team about where the company was relative to its goals. The meeting was mandatory and was designed to expedite progress on the turnaround plan, remove organizational barriers, drive cohesiveness in global operations, and ensure every member of the team was familiar with every aspect of the business. Mulally expected all members of his team to be prepared for their presentations and he demanded that they share information, both good and bad, openly and honestly. The culture of Ford had always been one that encouraged hiding failures or shortcomings for fear your peers would use the information against you, but Mulally's BPR meetings turned it into a culture where leaders freely shared shortcomings and failures because their peers were expected to offer assistance in correcting issues. The BPRs became the central operating mechanism for Ford, and during the heart of the financial crisis they were held every day to ensure every member of the leadership team had a clear understanding of where the business was and what they needed to be doing to move the plan forward. By creating a venue for honest dialogue among the leadership team, the BPR meetings helped changed the way Ford operated and helped it execute the turnaround plan that kept the company out of bankruptcy and away from government assistance.
Fostering candid dialogue among senior leaders, like Alan Mulally did at Ford, is a core principle of Performance Solutions Management Systems philosophy, and we view it as a critical component to any successful hospital transformation. In the next blog we will discuss how we apply the principle of leadership dialogue while working with our hospital partners.
Are you ready to step out of the silo?
How many of you feel your hospital operates in silos the way the Ford of 2006 operated? The silo mentality is one of the most common concerns expressed by our clients about their senior leadership teams, and it is often cited as the reason why the organization cannot get traction on its strategic initiatives and transformation efforts. Instead of working as one organization focused on common strategic imperatives, each operating unit is pulling in its own direction and following its own agenda.
The ironic thing is, although most clients cite the silos as a concern, few if any have truly tried to bring their leadership together for constructive, collaborative dialogue about the organization. While almost all clients have senior leadership meetings, few have the types of structured, focused, and honest conversations that Mulally pushed at Ford using his Business Plan Review meetings. Like Ford, we know the success of hospital transformations hinge on the ability of senior leadership to have honest, collaborative dialogue with one another. When we work with clients on activating strategy we create this dialogue through the Quarterly Operating Review (QOR) process.
Quarterly Operating Reviews are template-driven meetings where each initiative team updates their colleagues on where they are relative to their targets and what they plan to do over the next ninety days to meet their goals. As the primary operating mechanism for our strategy activation process, the QORs are designed to be mandatory checkpoints where leaders and teams are held accountable for their performance. The meetings, however, are not simply report-outs, they are action-focused discussions in which leaders discuss their plans for achieving their goals while other members of the leadership team ask questions and offer assistance. The QOR process creates a culture of shared responsibility for achieving the organization's goals -- leaders are expected to share where they are falling short of their targets and their peers are expected to have candid dialogue about where they can offer assistance or who can make up the shortfall through over-performance in their area. The QORs help educate every leader in the organization on where they stand relative to their goals and they help foster candid conversations about organization priorities, interdepartmental conflicts, and staff talent.
This type of dialogue has helped GE succeed for over 100 years and is a major reason why the company is considered a world-class operating organization. Despite the success of this approach, we often find this type of dialogue to be very unsettling for our clients because they operate in very siloed environments where successes and failures are treated as secrets to be shared only with immediate superiors; meaningful, strategic dialogue between peers on the senior leadership team is neither expected nor encouraged. Even many successful clients view their organizations as a collection of individual units and goals where dialogue among the leadership team is a nice to have but only necessary in instances where the work of one unit directly affects the work of another unit. Experience has shown, however, that in large, complex environments like Ford or GE or a hospital, candid dialogue across the entire leadership team is a key to unlocking the potential of the organization.