Strategic Leadership In a Wiki World Association for Strategic Planning Denver Chapter December 8,...

Strategic LeadershipIn a Wiki World

Association for Strategic PlanningDenver Chapter

December 8, 2010

The Mighty Who Fell

• AIG• Arthur Andersen• Bears Stearns• Chrysler• Circuit City• Citigroup• Countrywide

• Enron• Fannie Mae• Freddie Mac• General Motors• Lehman Brothers• Washington Mutual• WorldCom

©2010 by Rod Collins

A Prevalent Factor:Hierarchical Bureaucracies

Businesses That Are Changingthe Ways We Do Business

• Amazon• Apple• Best Buy• eBay• GE• Goldcorp• Google

• IBM• Linux• Procter & Gamble• Starbucks• Whole Foods• Wikipedia• W.L. Gore (Gore-Tex)

© 2010 by Rod Collins

A Prevalent Factor:Collaborative Networks

The Game-Changer

Networks Work Smarter and Faster Than

Hierarchies


Background: 1997

• Blue Cross Blue Shield Federal Employee Program (FEP)– Business alliance of 39 independent BCBS Plans

delivering a seamless national product– Largest privately underwritten health insurance

account in the United States– $6 billion in annual premium revenue– 3.6 million customers– 43% market share


Why We Needed a Change• Signs of trouble

– Medical loss ratio: 106.2%– Performance index: 78 (120 pt scale)– BCBS Plan satisfaction with FEP leadership: 79% (poor)

• Our business world was suddenly moving much faster

• Misaligned management model– Using command-and-control while lacking command authority– Meetings were perennial political debates– Major initiatives had lots of “bugs”– “Herding cats”


The Business Alliance Management Problem

How do you manage when you have no practical authority over many geographically dispersed workers in fast-changing markets?


Why We Needed a Change

• We needed to move smarter and faster– Shift the politics from control to collaboration– Shift the conversation from debate to dialogue– Shift the decisions from command to consensus

• We needed better meetings with lasting results– Best meetings are run by outside facilitators, but results don’t last– Train executives to be facilitators– Develop a meeting format that fosters listening, participation,

consensus, and focused action – all in a short period of time


Work-Thrus

• A meeting process that provides organizations with quick access to their collective knowledge

• Work-Thrus are powerful tools that get to the heart of complex business issues or processes by drawing on an organization’s best collective thinking and moving to a clear consensus on action in a very short period of time

– Critical Initiatives– Major Projects– Business Process Improvement


Work-Thrus

• 1 or 2 day offsite meetings of between 15 and 60 participants

• Alternate between three different interactive activities:

1. Presentations

2. Small Group Exercises

3. Large Group Discussions


The Four Cardinal Rulesof Work-Thrus

1. Presentations are always delivered without interruption.

2. After presentations, clarifying questions only.

3. Small group exercises are always focused on clear and specific deliverables.

4. Conclusions and agreements about the group’s ideas rest with the group – period.


Surowiecki’s Four Conditionsfor “Wise Crowds”

1. Diversity of opinion

2. Independent thinking

3. Local knowledge

4. Aggregation mechanisms

Why Work-Thrus Work• Nobody is smarter than everybody

• There is nothing as powerful as getting everybody – or at least a critical mass of everybody – in the “same room at the same time.”

• Provide quick access to collective knowledge

• Companies discover “what they don’t know that they don’t know”

• Satisfy Surowiecki’s Four Conditions for “Wise Crowds”

• Drive a clear focus on what’s most important


What We Learned• There are two basic phases to every major project: order and chaos.

Our only choice is the sequence – why, in fast-changing times, would anyone choose chaos last?

• “What you don’t know that you don’t know” is the prime culprit behind failed initiatives.

• Shared understanding is a far more powerful driver of consistency than control

• Knowledge workers are fully capable of “connecting the dots” once they have a realistic frame of reference


Ten Years Later: 2007

• Blue Cross Blue Shield Federal Employee Program (FEP)– $19 billion in annual premium revenue– 4.6 million customers– 59% market share– Medical loss ratio: 90.6%– Performance index: 104 (unprecedented high)– BCBS Plan satisfaction with FEP leadership: 97%


The Three Key Laws ofHuman Hierarchies

1. Division of Labor: Production is most efficient when work is divided into specialized tasks.

2. Unity of Command: Each person reports to a single supervisor.

3. Scalar Principle: Individuals are ranked by authority within an organization chart that defines explicit communication protocols.


The Three Key Laws of Human Networks

1. Moore’s Law: Semiconductor chip capacity doubles every 18 – 24 months.

2. Metcalf’s Law: The value of networks grows exponentially to the number of participants.

3. Dunbar’s Number: 150 – the limit where members of a physical human community can maintain strong links with one another.


The Wiki World

• Connectivity is the new electricity• Knowledge is an abundant resource – it only grows by

giving it away• Nobody is smarter or faster than everybody• Life cycle of business models has decreased from 30 – 40

years to 7 – 10 years• Innovation is not an option – it’s a requirement for

business sustainability• The past is no longer a proxy for the future


Organizing Models

Top-Down Hierarchies

• Mass production• Leaders think “inside-out”• Leverages expert

knowledge• Basis of strategy: central

planning • Basis of execution:

hierarchical organization

Peer-to-Peer Networks

• Mass collaboration• Leaders think “outside-in.”• Leverages collective

knowledge• Basis of strategy: collective

learning• Basis of execution: self-

organization


Key AssumptionsTop-Down Hierarchies

• If anything is to get done, someone needs to be in charge.

• The smartest organizations have the smartest individuals.

• An organization’s intelligence resides in a select number of star performers who leverage their expertise through the power to direct and control the work of others.

Peer-to-Peer Networks

• If anything is to get done, everyone needs a shared understanding

• The smartest organizations have quick access to their collective knowledge

• An organization’s intelligence resides in the diversity of its members who leverage their collective knowledge through the power to connect and collaborate with each other.


The Five Disciplinesof the Collaborative Enterprise

1. Understand What’s Most Important to Customers

• Direct Customer Feedback: Surveys, Focus Groups• Customer Segmentation Data: Value Propositions• Reliable Customer Proxies: CSRs, Consumer Reports



2. Learn How to Leverage Collective Knowledge

• Electronic Learning Platforms: Wikis, SharePoint• Collective Learning Processes: Work-Thrus• Learning Measurement System: Balanced Scorecard



3. Bring Everyone Together in Open Conversations

• Cross-Functional Teams• Open Forums: Town Hall & Open Space Meetings • Company Blogs



4. Focus on the Critical Few Drivers of Success

• Three Priorities• Key Indicators: Subset of Balanced Scorecard• Cross-Functional Goals



5. Hold People Accountable to Their Peers

• Peer Hiring• Peer Evaluations• Facilitative Leadership


Which Picture Best Reflects Your Practical Management

Challenge?

For more information contact:

Rod Collins• Author, Leadership in a Wiki World: Leveraging Collective Knowledge to Make

the Leap to Extraordinary Performance

[email protected]

www.wiki-management.com

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