Combine Clear Goals with Delegation Based on Expertise for High Impact

I re-read “Up the Organization” by Robert Townsend and was  struck by how many of his insights were still applicable. The first chapter offers a recipe for breakthrough impact: combine clear goals with delegation based on expertise.

Up The Organization: Delegation Based on ExpertiseUp The Organization

First published in 1970,”Up the Organization” is a grab bag of  practical advice that flows from a few key principles:

  • Delegate based on expertise and conviction. Assume those closest to the situation are the default experts: “All decisions should be as low as possible in the organization. The Charge of the Light Brigade was ordered by an officer who wasn’t there looking at the territory.”
  • Look at the business from the customer’s point of view.
  • Commit to excellence: “If you don’t do it excellently, don’t do it at all. Because if it’s not excellent it won’t be profitable or fun, and if you are not in business for fun or profit, what the hell are you doing here.” Be clear on defining goals and aligning incentives that encourage organizational excellence. Even internal conflict is healthy if its driven by a commitment to excellence.
  • A manager’s responsibility is to make his team more effective.

His fundamental thesis: “Provide the nourishment and let people grow themselves. They’ll amaze you.”

  1. People don’t hate work. It’s as natural as rest or play.
  2. They don’t have to be forced or threatened. If they commit themselves to mutual objectives, they’ll drive themselves more effectively than you can drive hem.
  3. But they’ll commit themselves only to the extent they can see ways of satisfying their ego and development needs.

The subtitle “How to Stop the Corporation from Stifling People and Strangling Profits” is a useful summary.

Delegation Based on Expertise

“How do we get five million dollars of advertising for one million dollars?”

Ultimately we stumbled on the right question: “How do we get five million dollars of advertising for one million dollars?” (Our competition has five dollars for each dollar we have, and yet we have to pay the same price for cars, insurance, rent, gas, oil, and people.)

Finally, Bill Bernbach said: “If you want five times the impact, give us ninety days to learn enough about your business to apply our skills, and then run every ad we write where we tell you to run it. Our people work to see how effective their ideas are. But most clients put our ads through a succession of assistant V.P.’s and V.P.’s of advertising, marketing, and legal until we hardly recognize the remnants. If you promise to run them just as we write them, you’ll have every art director and copywriter in my shop moonlighting on your account.”

We shook hands on it. To keep people at Avis and at Doyle Dane Bernbach from violating Bernbach’s vision of the ideal account, I wrote “The Avis Rent A Car Advertising Philosophy,” had it framed, and hung it in everyone’s office (at both client and agency). It reads:

Avis Rent a Car
Advertising Philosophy

  1. Avis will never know as much about advertising as DDB and DDB will never know as much about the rent a car business as Avis.
  2. The purpose of the advertising is to persuade the frequent business renter (whether on a business trip, a vacation trip, or renting an extra car at home) to try Avis.
  3. A serious attempt will be made to create advertising with five times the effectiveness (see #2 above) of the competition’s advertising.
  4. To this end, Avis will approve or disapprove, not try to improve, ads which are submitted. Any changes suggested by Avis must be grounded on a material operating defect (a wrong uniform for example).
  5. To this end, DDB will only submit for approval those ads which they as an agency recommend. They will not “see what Avis thinks of this one.”
  6. Media selection should be the primary responsibility of DDB. However, DDB is expected to take the initiative to get guidance from Avis in weighting of markets or special situations, particularly in those areas where cold numbers do not indicate the real picture. Media judgments are open to discussion. The conviction should prevail. Compromise should be avoided.

Ninety days later, Bill Bernbach came out to show Avis his tremendous ads. He said he was sorry but the only honest things they could say were that the company was second largest and that the people were trying harder. Bernbach said his own research department had advised against the ads, that he didn’t like them very much himself — but it was all they had, so he was recommending them. We didn’t like them much at Avis either, but we had agreed to run whatever Bill recommended.

The rest is history. Our internal sales growth rate increased from 10 percent to 35 percent in the next couple of years.

Moral: Don’t hire a master to paint you a masterpiece and then assign a roomful of schoolboy-artists to look over his shoulder and suggest improvements.

Robert Townsend in “Up the Organization” chapter on “Advertising”

Of course Townsend did much more than run advertising. He operationalized “We Try Harder” as Avis’ brand promise. He made it clear to the rank and file that it was their efforts that were winning the customer’s business.

“To communicate this to the field, the entire management team at Avis traveled to every branch location across the country, spoke with every single employee and explained that the success of the campaign and of their business hinged upon providing superior customer service every chance they got. Each Avis employee also received a copy of new Avis ads in his or her pay envelope before each campaign would run.”
How to make your advertising five times as effective” (10-Jan-2010 Wieden + Kennedy blog)

I particularly like this line “the only honest things they could say were that the company was second largest and that the people were trying harder.” As they say,  it’s not only a good story, it’s true. And Townsend clearly made it true.

The other thing is to clearly separate the responsibilities between the DDB and Avis folks, challenging DDB to be as effective as they could–hopefully five times as effective as Hertz just to even the odds!–and only allowing Avis personnel to challenge the content if it’s inaccurate.

I think startups wrestle with this challenge, they often want to tell the story of where they are going to be, “writing the data sheet in the future tense” instead of acknowledging where they are and the strengths and expertise that they have already demonstrated.

Look at Your Business From The Customer’s Point of View

When you’re off on a business trip or vacation, pretend you’re a customer. Telephone some part of the organization and ask for help. You’ll run into some real horror shows. Don’t blow up and ask for name, rank, and serial number–you’re trying to correct, not punish. If it happens on a call to the Dubuque office, just suggest to the manager (through channels, dummy) that he make a few test calls himself.

Then try calling yourself up and see what indignities you’ve built into your own defenses.

Robert Townsend in “Up the Organization” chapter on “Call Yourself Up”

It’s hard to see our businesses as prospects and customers view us.  But it’s interesting that Townsend tries to create incentives for the managers to discover how customers view their department. And this ties back into making sure the organization is living up to “We Try Harder.”

Assign Clear Responsibility: One Vision for Excellence

Compromise is usually bad. It should be a last resort. If two departments or divisions have a problem they can’t solve and it comes up to you, listen to both sides and then, unlike Solomon, pick one or the other. This places solid accountability on the winner to make it work.

When you give in give in all the way. And when you win, try to win all the way so the responsibility to make it work rests squarely on you.

Robert Townsend in “Up the Organization” chapter on “Compromise and King Solomon”

Clear responsibility enables a clear evaluation of results. He did the same thing in the arrangement with DDB: he wanted them to take responsibility for the campaign and be judged on the results. The risk is that other groups may try to sabotage the efforts but for startups that may be less of a problem because successful or failure is shared with the entire team.

The other verb to emphasize in this advice is “listen to both sides” which Townsend highlights as an essential skill for any leader.

Successful Automation Evolves
From Effective Manual Processes

Make sure your present report system is reasonably clean and effective before you automate. Otherwise you will just speed up the mess.

Never automate a manual function without a long period of dual operation. When in doubt discontinue the automation. And don’t stop the manual system until the non-experts in the organization think that automation is working.

Robert Townsend in “Up the Organization” chapter on “Computers and their priests”

This guidance anticipates Gall’s Law published in the 1975 Systemantics by five years.

“A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system.”
John Gall in Systemantics (1975)

It’s interesting that his delegation based on expertise model is followed but in a counter-intuitive way. In following “don’t stop the manual system until the non-experts in the organization think that automation is working” it’s the “non-computer” experts who are the best judge of success, presumably because they have a stake in successful operation whether it’s automated or manual and will switch to automation as soon as they are satisfied.

Software startups are particularly at risk for developing in-house tools for non-core functions because it’s a “simple matter of programming” and letting the engineers and not the users determine it’s utility.

Common Decisions Should Be Made Fast

“There are two kinds of decisions: those that are expensive to change and those that are not. The common or garden-variety decision should be made fast.”

Robert Townsend in “Up the Organization”  chapter on “Decisions”

This is one chapter I wish Townsend had gone into more detail on. The size of a decision is the amount of resources irrevocably committed and decisions fall into a broad spectrum from what color coffee cups to buy for the cafeteria to where to site a new factory or what major new product to develop and launch. If no significant information can be gained by waiting or from further analysis then it certainly  makes sense to make decisions as quickly as possible as many opportunities are fleeting. If you treat even “mid-size” decisions as probes you remain alert to the possibility of being wrong in the same way a toddler learns to walk on uncertain terrain, slowly shifting all of their weight to where they have planted their forward foot to make sure they won’t lose footing. I think what Townsend is really arguing against is dithering, where fear of being wrong leads to a paralysis worse than any failure from making a choice and moving forward.

Create a Climate in Which People Can Grow

“A real leader does as much dog-work for his people as he can: he can do it, or  see a way  to do it, ten times as fast. And he delegates as many important matters he can because that creates a climate in which people grow.

To the general counsel: “I don’t want to read any legal documents covering transactions I’ve approved. If I have to sign them, then you initial them for legal aspects, and get the affected division head to initial for operating aspects. But remember, if you send it in with those two sets of initials, I’ll sign it without reading it.”

Robert Townsend in “Up the Organization”  chapter on “Delegation of Authority”

Defining when you have don’t have to make a decision is a critical element for scaling the organization. I like Townsend’s objective to create a more capable organization as one of the default objectives for any leader.

Servant Leadership

  • True leadership must be for the benefit of the followers, not the enrichment of the leaders. In combat, officers eat last.
  • The best managers think of themselves as playing coaches. They should be first on the field in the morning and last to leave it at night.
  • A good manager is a blocking back whenever and wherever needed. No job is too menial if it helps one of his players advance toward his objective.
  • A good manager carries his players’ home phone numbers with him and has an understanding with them that, just has he is available to them until eleven o’clock any night so they are available to him on the same terms.
  • Key role of leadership is eliminating employees excuses for doing lousy work.

Robert Townsend in “Up the Organization”  chapter on “Leadership”

At the same time Townsend was writing “Up the Organization” Robert Greenleaf was writing “The Servant as Leader”  which outlined a similar vision of leadership:

“A new moral principle is emerging which holds that the only authority deserving one’s allegiance is that which is freely and knowingly granted by the led to the leader in response to, and in proportion to, the clearly evident servant stature of the leader. Those who choose to follow this principle will not casually accept the authority of existing institutions. Rather, they will freely respond only to individuals who are chosen as leaders because they are proven and trusted as servants.”
Robert Greenleaf  in “The Servant as Leader

Simon Sinek elaborated on “officers eat last” in his own book “Leaders Eat Last

“Marine leaders are expected to eat last because the true price of leadership is the willingness to place the needs of others above your own. Great leaders truly care about those they are privileged to lead and understand that the true cost of the leadership privilege comes at the expense of self-interest.”

“It is a leader’s job instead to take responsibility for the success of each member of his crew. It is the leader’s job to ensure that they are well trained and feel confident to perform their duties. To give them responsibility and hold them accountable to advance the mission.”

Simon Sinek in “Leaders Eat Last

Understand The Strengths Of  Team Member

“Some people absorb ideas quickly from conversation; others respond better to written material. First reactions are best from some people; other people shouldn’t be rushed.”

Robert Townsend in “Up the Organization”  chapter on “Meetings”

It’s as important to recognize your own strengths, how you learn and what you need to make decisions effectively. From the way he wrote the book, including this chapter, it’s clear the Townsend was in the “absorb ideas quickly and offer a good first reaction” camp. It’s interesting to see a CEO like Jeff Bezos shape his meetings around people preparing a six page written memo and a 30 minute “study hall” where all attendees read the material before discussing it.

Here is a transcript (from 5:38 to 7:30 from a 2012 interview with Charlie Rose where Bezos outlines his approach:

“Yes, we have study hall at the beginning of our meeting. In the traditional corporate meeting somebody gets up in front of the room and presents, let’s say a PowerPoint presentation or some kind of slide show. And in our view you get very little information that way. You get bullet points — it’s kind of easy for the presenter but difficult for the audience. Instead all of our meetings are structured around a six-page narrative memo. And when you have to write your ideas out in complete sentences and complete paragraphs it forces a deeper clarity of thought.  We all sit around the table reading simultaneously. You know everybody has actually read the memo. The author who has put a tremendous amount of work into writing the memo gets the nice warm feeling of seeing everybody read it so they know actually it hasn’t been a waste of time, their memo it is getting read.  And there is another nice thing about this approach too. If you have  a traditional PowerPoint presentation, executives are very good at interrupting. The person will get halfway into their presentation and then an executive will interrupt the conversation. And that question that the executive asks probably was going to be answered five slides in. If you read the whole six-page memo, it often happens to me, I get to page two and I have a question. I jot it in the margin and by the time I get to page four the question has been answered so I can just cross it off and it saves a lot of time.”
Jeff Bezos on Charlie Rose Nov-16-2012

I think there are broadly three kinds of cultures for information sharing

  • written: email / Word / memos
  • verbal: presentations, voicemails, phone calls, powerpoint, stories
  • numbers: spreadsheets, models, charts and graphs

Each group will tend to a primary style that can act as a filter on the selection process for leaders.

We Learn By Making Mistakes,
Then Acknowledging and Correcting Them

“Admit your own mistakes openly. Encourage your associates to do likewise by commiserating with them. Never castigate. Babies learn to walk by falling down. If you beat a baby every time he falls down, he’ll never care much for walking.

My batting average at Avis was no better than .333. Two out of every three decisions I made were wrong. But my mistakes were discussed openly and most of them were corrected with a little help from my friends.”

Robert Townsend in “Up the Organization” chapter on “Mistakes”

Four techniques that help improve the quality of your judgement and decision making:

  • Premortem: subject your plan to an analysis that assumes it has failed and ask the team to suggest the most likely reasons why. Make improvements where you can based on the insights this generates.
  • Decision Records: have everyone write down privately what they believe the likely impact of the decision will be and how long it will take to judge. Store these notes away for safekeeping and review them as a group after an appropriate interval.
  • Deliberate practice of diagnosis: keep track of your diagnoses and predictions of a situation; follow up to understand what really happened. This is especially important when the lag between symptoms and certainty is measured in weeks to months and not hours to days.
  • Develop models for the underlying systems driving the events and behavior that you are observing. Look for deeper patterns and understand the history behind events and what appear to be sudden developments. As Harry Truman observed: the only surprises are the history you don’t know.

People Are Experts on Their Own Growth

What are valid assumptions for present-day circumstances? McGregor called them “Theory Y”:

  1. People don’t hate work. It’s as natural as rest or play.
  2. They don’t have to be forced or threatened. If they commit themselves to mutual objectives, they’ll drive themselves more effectively than you can drive hem.
  3. But they’ll commit themselves only to the extent they can see ways of satisfying their ego and development needs.

Provide the nourishment and let people grow themselves. They’ll amaze you.

Robert Townsend in “Up the Organization” chapter on “People”

47 years after the original publication, Townsend’s vision remains both compelling and poorly implemented at most firms.

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