Beyond Control

Technology has made it possible to apply a new management philosophy. Leaders can let go and still be in control. They can involve key people without losing momentum. Companies can consistently measure organizational capability over time, and accurately benchmark 'soft' management areas, and a virtual CEO office really does work. Founded on three key insights (the operating arena; managing by pull and push; and the web-based dialogue centre), Beyond Control offers a revolutionary model for shifting the management focus from structured control to guided interaction. Using this approach companies can build a participative operating system that creates space for managers to excel, and avoids the unpleasant surprises that can lead to corporate scandals.

Introduction ix

A new approach x

The research base xi

Strategic pull and operational push xii

Strategic alignment and the corporate black box xii

Operating arena xiii

Corporate dialogue xiii

The executive dialogue centre xiv

Moving beyond control xiv

Layout of the book xv

Flowchart xviii

Acknowledgements xix

Part I: Moving Beyond Control: A New Concept 1

1. Strategic Alignment: Is a New System Needed? 3

The profitability equation 3

Moving beyond control 4

How things can go out of control 5

How problems were caused by the operations being ‘black boxed’ 7

Opening up the black box 11

Lessons learned 12

2. The Corporate Black Box: Understanding History 13

Looking back 13

A new approach 33

Lessons learned 35

3. The Operating Arena: Aligning the Space 37

The operating arena explained 37

A dynamic space 39

The theory of strategic alignment 43

Measuring alignment of capabilities 45

The organizational capability scan 46

A management style for strategic alignment 53

Lessons learned 55

4. Leadership Beyond Control: Creating the Push 57

The ideal leadership 57

Aligning strategy and execution 59

Participation: Leading from the middle 61

Combining power and authority:

Creating a culture of respect 63

Managing by strategic pull and operational push 64

Measuring the capacity for alignment 66

Lessons learned 74

Part II: Creating Alignment: The Continuous Dialogue 75

5. The Corporate Dialogue: Activating the Agenda 77

Measuring, matching and managing 77

Measuring 79

Matching: Creating the alignment agenda 83

Managing 86

Lessons learned 91

6. The Executive Dialogue Centre: Installing the Toolbox 93

The executive dialogue centre 93

Ten reasons for establishing an executive dialogue centre 97

The process of managing beyond control 103

Lessons learned 105

7. The Fundamentals: A Mindset for Pull and Push 107

Four pillars 107

Managing complexity is about letting go 108

Individual freedom supports commitment 114

Transparency and accountability are assets 115

Shared uncertainty reduces fear 117

Lessons learned 119

Part III: Managing Alignment: Leading, Rewarding and Reporting 121

8. The Chief Executive Officer: Believer-in-Chief 123

Intent: Being an internal and external role model 124

Objectives: Goals that hit home and please people 133

Resources: Making managers unlock people’s potential 136

Interaction: Taking charge of communication 137

The corporate dialogue process 141

Lessons learned 145

9. The Chief Financial Officer: Guarding the Equation 147

Intent: Creating total clarity 148

Objectives: Linking score with capabilities 152

Resources: Focus on facilitation and reality 155

Interaction: The conscience behind the data 155

Lessons learned 157

10. The Human Resource Director: Aligning Talent 159

Intent: Giving the right people the real story 161

Objectives: Fighting for meritocracy 170

Resources: Being committed to engagement 173

Interaction: Fighting for openness 178

Lessons learned 182

11. The Communications Director: The Coherent, Consistent Storyline 185

Intent: Making sense of strategy through interaction 187

Interaction: Managing the ecosystem of dialogue 192

Objectives: Enabling individual agendas to be aligned with the strategic alignment agenda 196

Resources: Infrastructure as an enabler for consistency 196

Lessons learned 197

Epilogue 199

Appendix I: Gap Analyses 201

Appendix II: Campaign Invitations and Protocols 203

Appendix III: A Case Study on Measuring – ABN AMRO 205

Appendix IV: A Case Study on Matching – Numico 208

Appendix V: A Case Study on Managing – Sara Lee/DE 211

Appendix VI: How Aligned Is Your Company? 215

Notes 217

Index 221

"...every CEO, manager, board member and business student can gain something from this book..." (Credit Control Journal, July 05)

"This book is full of well presented, sound advice..." (Professional Manager, September 05)

"...worth a read..." (Gulf Business, January 06)

"…important issues that need to be taken very seriously by all today’s CEOs…" (Long Range Planning, August 2006)

ABOUT THE AUTHORS

FRED LACHOTZKI (RIGHT) has thirty years of experience as manager, president and nonexecutive director in E e, the USA and the Far East. As a Professor of business policy at Nyenrode University, he has been teaching strategy formulation and execution for many years. He has served or is serving on a number of boards in an executive as well as a non-executive capacity, both nationally and internationally.

ROBERT NOTEBOOM is an independent strategy consultant, prior to which he was Associate Director Customer Value Management at PricewaterhouseCoopers. He is also lecturer for e-Business Strategy at Nyenrode University, the Netherlands.

Both authors have been involved in initiatives to help global companies focus their alignment via 'digital dialogue'. Since its founding in 1998, MeyerMonitor, a management consulting company dedicated to improving organizational effectiveness, has applied the models and methodol gies on which this book is based in various projects, serving many large multinational companies and generating a wealth of positive research data.

"I a m quite familiar with the work that MeyerMonitor does for several large corporations, which has served as a laboratory for the tools presented here. The book has an extraordinary story to tell – use the Internet to run an ongoing dialogue between CEO and employees? That's radical thinking. Before the digital revolution it would have been impossible. It's still impossible to chief executives with a command-and-control mindset. But in an age when transparency has suddenly taken on bottom-line importance, CEOs that have the courage to manage with tools like these may find that they have results to justify their openness."
JOHN A. DEIGHTON, PROFESSOR, HARVARD BUSINESS SCHOOL

"Highly innovative and globally validated. Practically proven in a number of high level CEO and CXO situations. Not only theory: it really works. Improves alignment of strategy with execution if seriously applied. An important book."
PETER J. KORSTEN, PARTNER AND VICE PRESIDENT, IBM CORPORATION

"I found the book Beyond Control fascinating, describing so well what is in my view absolutely required in today's management of large, complex organizations that operate on a global scale. It will transform the way CEO's see their role. It will also create a huge debate, from boardroom to academic world."
BEN VERWAAYEN, CEO BRITISH TELECOM

"A well written book that illustrates so clearly that intensive dialogue is such a better guarantee for success than the 'ivory tower' that CEO's so easily put themselves into."
THONY RUYS, CHAIRMAN EXECUTIVE BOARD, HEINEKEN NV