Management is not about choosing options, it’s about setting priorities

by bold-lichterman

A management training seminar recently gave me the opportunity to highlight a very important point of the managerial profession in relation to the notion of decision. Management is always presented as a practice in which decisions have to be made, these decisions being made by choosing among several options. But the reality is different: what a manager does, and indeed any employee in an organization, is not so much choosing among options as setting priorities. The difference may seem subtle, but it is significant. Seeing management as a definition of priorities makes it possible to explain phenomena that are difficult to understand, such as failure in the face of breakthrough innovation or the difficulty of transforming despite a very clear objective.

To better understand this phenomenon, let’s put ourselves in the situation of Sophie, a young salesperson working in a large company. Innovation has been placed at the center of its strategy. The CEO was very clear during the launch with great fanfare of the Innovation Challenge: “All innovators!” Sophie takes this imperative very seriously. One day, returning from a client meeting, she reflects on the discussion she just had and comes up with the idea for a new product. “All innovators!”: She doesn’t hesitate for a second.

With the unreserved approval of her manager, she locks herself in her office for several days with a supply of coffee and biscuits. She went to do several field surveys, met partners, developed a prototype and, supported by all of the company’s employees, signed a first contract. Its CEO recognizes the brilliance of his work, the product becomes a worldwide success and Sophie, a few years later, takes over the management of the company. “All innovators!”

Realistic scenario? Probably not. What is more likely is that when Sophie decides to devote time to her innovation project, her manager will forbid her with the following argument: take care of your prospects first, and if you have any time, we’ll see. If it persists (after all, “All innovators!”), It will not achieve its objectives and will be heavily penalized when it comes time to assess its performance, because unfortunately innovation is not part of the process. its evaluation criteria. So she will probably have to give up.

It should be noted, very importantly, that Sophie’s problem is not that innovation is not part of her evaluation criteria; that would not be enough. Suppose this is the case. Sophie therefore has two criteria for evaluating her performance: her commercial results, and now innovation. If it has devoted time to developing an innovation, it will be assessed favorably on this criterion, but its commercial performance will probably have suffered and it will not have reached its objectives. It will therefore be assessed unfavorably on this criterion. We can therefore see that there is a conflict. What then should his manager do? The reality of the company being what it is, it is extremely likely that it will give more weight to the bad business results, tangible, measurable and immediate impact, than to the innovation effort, intangible , not measurable and of distant impact.

Whatever his good will, this attitude will be rational, and will lead to the perverse effect. Unless senior management, through the management system, provides a solution to resolve this conflict, it will continue. We can therefore see that there is no decision not to innovate; there is no bad guy who acts against innovation or who opposes change; simply that on a daily basis, when decisions are made, innovation takes a back seat; it is only practiced when Sophie has time, that is to say in practice never. We can not blame his manager: he may be fully aware of the need to innovate, but if he “loses time”, he too will be poorly evaluated at the end of the year.

The strategy achieved by an organization is the sum of thousands of decisions made by its employees (Image source: Wikipedia).

We can generalize this idea of ​​conflict at the level of employee choices with the notion ofresource allocation. What resource is allocated by every employee, however small, in the organization? There are several, but the main ones are time and attention. Arriving at the office in the morning, Sophie will organize her day and decide how to use her time. In particular, it will decide who to call: prospect A rather than prospect B, and client C rather than client D. These decisions will result in this contract rather than another, and in the end, if we multiply them by the number of employees, and over a long period of time, these thousands of decisions will lead the company in an X direction rather than Y that it had not necessarily anticipated.

Values ​​and mental models

But what does Sophie base herself on to allocate her time and attention? On processes and especially on values, constitutive of the mental model of the organization. Some of these values ​​are explicit: company instructions, criteria for evaluating its performance, etc. Others are implicit, like the attachment to the relationship with a client or on the contrary the detachment from this type of consideration. In the end, the allocation of resources by the various actors of the organization is done on the basis of their motivation in the most basic sense of the term.

Two problems can then arise. The first problem is the misalignment between the motivation of the employee and the interests of the company. The latter may have defined a strategy and then ask all its employees to implement it, but neglect the transcription of this imperative into appropriate incentive mechanisms at all levels of the organization. However, it is at the intermediate levels that the strategy is effectively implemented through the allocation of resources, as we have mentioned. Without appropriate mechanisms, alignment is not achieved, and employees take the company in a different direction from the strategic intention expressed in the upper floors (which is not necessarily bad sometimes…). We can never say it enough, the effective strategy, carried out, is only the sum of the thousands of individual decisions of the employees of the organization like Sophie, which makes essential the detailed understanding of the way in which these decisions are taken.

The second problem is that the incentive mechanisms, supposed to influence the motivation of the employees, can lead to perverse effects. For example, to increase sales, we will increase sales representatives’ commissions. These will tend to go for the big deals, ignoring the “small” clients who may be more loyal, more profitable and who, one day perhaps, will become big. Short-term performance may increase, but the sustainability of the company is jeopardized. Any performance measurement system induces perverse effects, and it is extremely important to anticipate them when we put these systems in place. This is rarely the case today.

In conclusion, whether it is for the implementation of a strategic intention or for a transformation program, it is necessary to shed light on the mental models of the organization and its collaborators (beliefs and values) to understand the real current sources of action, and more precisely the current criteria for defining priorities. The peculiarity of these mental models is that they are most often invisible and deeply buried under the weight of the history of the organization and its collaborators, and that they are seen as universal evidence. It requires deliberate exhibition work, without which the organization will continue to go around in circles without understanding why its pretty, perfectly logical plans lead nowhere.

On the notion of mental model, see my previous articles: To transform, the company must start by reviewing its mental models as well as The conflict of mental models, the key to organizational transformation.

The notion of mental model and its importance in individual, organizational and societal transformation is developed in my book Strategy Model Mental co-written with Béatrice Rousset.