Post on 08-Jan-2017
REAL MANAGEMENT REAL PEOPLE, REAL CAPABILITIES & REAL MOTIVATIONS
Thought Leader 2015 Copenhagen, Denmark
September 25, 2015
@RogerLMartin
Martin Prosperity Institute Rotman School of Management
Copyright © 2015 Roger L. Martin
THEORETICAL MANAGEMENT
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• Conceptual People • Imaginary Capabilities • Notional Motivations
Copyright © 2015 Roger L. Martin
THEORETICAL MANAGEMENT
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• Conceptual People • Imaginary Capabilities • Notional Motivations
What are examples?
Copyright © 2015 Roger L. Martin
THEORETICAL MANAGEMENT
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• Conceptual People • Imaginary Capabilities • Notional Motivations
What are examples? - Bond Raters - Audit Partners - Stock Brokers - Independent Board Members - Pension Fund Managers
Copyright © 2015 Roger L. Martin
REAL MANAGEMENT
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• Real People • with Real Capabilities • & Real Motivations
Copyright © 2015 Roger L. Martin
REAL MANAGEMENT
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• Real People • with Real Capabilities • & Real Motivations
What does this mean?
Copyright © 2015 Roger L. Martin
REAL MANAGEMENT
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• Real People • with Real Capabilities • & Real Motivations
What does this mean? - A real person, with the capabilities to
really do the job required, could really be attracted to the job in the first place, and, once in the job, could be reasonably motivated to do what the job requires
Copyright © 2015 Roger L. Martin
THEORETICAL INNOVATION
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Shareholders
The Assumed Actors/System
Copyright © 2015 Roger L. Martin
THEORETICAL INNOVATION
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Shareholders Board of Directors
The Assumed Actors/System
Copyright © 2015 Roger L. Martin
THEORETICAL INNOVATION
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Shareholders Board of Directors
Encourage Optimal
Level
The Assumed Actors/System
Copyright © 2015 Roger L. Martin
THEORETICAL INNOVATION
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Shareholders Board of Directors CEO
Encourage Optimal
Level
The Assumed Actors/System
Copyright © 2015 Roger L. Martin
THEORETICAL INNOVATION
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Shareholders Board of Directors CEO
Encourage Optimal
Level
Enforce Optimal
Level
The Assumed Actors/System
Copyright © 2015 Roger L. Martin
THEORETICAL INNOVATION
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Shareholders Organization Board of Directors CEO
Encourage Optimal
Level
Enforce Optimal
Level
The Assumed Actors/System
Copyright © 2015 Roger L. Martin
THEORETICAL INNOVATION
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Shareholders Organization Board of Directors CEO
Encourage Optimal
Level
Enforce Optimal
Level
Mandate Optimal
Level
The Assumed Actors/System
Copyright © 2015 Roger L. Martin
REAL INNOVATION
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Shareholders Organization Board of Directors CEO
- Pension Funds - Mutual Funds - Hedge Funds
The Real Actors
Copyright © 2015 Roger L. Martin
REAL SHAREHOLDERS
16 Adapted from: Federal Reserve Board and Goldman Sachs Global Investment Research.
Copyright © 2015 Roger L. Martin
REAL INNOVATION
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Shareholders Organization Board of Directors CEO
- Pension Funds - Mutual Funds - Hedge Funds
The Real Actors
- Misaligned - Capability-
Challenged
Copyright © 2015 Roger L. Martin
REAL BOARDS OF DIRECTORS
18 Source: McKinsey Global, 2013.
Copyright © 2015 Roger L. Martin
REAL INNOVATION
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Shareholders Organization Board of Directors CEO
- Pension Funds - Mutual Funds - Hedge Funds
The Real Actors
- Misaligned - Capability-
Challenged
- Short-term incentivized
- Reliability- focused
Copyright © 2015 Roger L. Martin
REAL INNOVATION
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Shareholders Organization Board of Directors CEO
- Pension Funds - Mutual Funds - Hedge Funds
The Real Actors
- Misaligned - Capability-
Challenged
- Short-term incentivized
- Reliability- focused
- Reliability- focused
- Incrementally- incentivized
Copyright © 2015 Roger L. Martin
REAL INNOVATION
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CEO
Copyright © 2015 Roger L. Martin
REAL INNOVATION
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Board of Directors CEO
Seek Protective Assistance
Copyright © 2015 Roger L. Martin
REAL INNOVATION
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Shareholders Board of Directors CEO
Attempt to Ameliorate
Damage
Seek Protective Assistance
Copyright © 2015 Roger L. Martin
REAL INNOVATION
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Shareholders Organization Board of Directors CEO
Attempt to Ameliorate
Damage
Seek Protective Assistance
Support & Nurture
Innovation
Copyright © 2015 Roger L. Martin
THEORETICAL ‘EXECUTION’
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The brain makes the choices
The arms and legs execute the choices of the brain
THE VIEW OF THE HUMAN BODY
Copyright © 2015 Roger L. Martin
THEORETICAL ‘EXECUTION’
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Senior Leaders • The brains of the organization • Formulate the decisions • Create control procedures • Sell to get “buy-in” The Rank and File • The arms and legs of the organization • Implement the decisions • Controlled by procedures • Get “bought-in”
THE IMPLICIT METAPHOR OF THE CORPORATION
Copyright © 2015 Roger L. Martin
THE EXECUTION TRAP
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What is the Biggest Enemy of Execution?
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THE EXECUTION TRAP
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What is the Biggest Enemy of Execution?
The Word Execution
Copyright © 2015 Roger L. Martin
REAL MANAGEMENT: STRATEGY IS CHOICE
What is our winning aspiration?
Where will we play?
How will we win?
What capabilities must we have?
What management systems are required?
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Copyright © 2015 Roger L. Martin
REAL MANAGEMENT: NESTED CHOICE CASCADES
How to Win
Management Systems
Winning Aspiration
Capabilities
Where to Play
How to Win
Management Systems
Winning Aspiration
Capabilities
Where to Play
How to Win
Management Systems
Winning Aspiration
Capabilities
Where to Play
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How to Win
Management Systems
Winning Aspiration
Capabilities
Where to Play
How to Win
Winning Aspiration
Where to Play
Capabilities
Copyright © 2015 Roger L. Martin
MAKING CHOICES ACROSS MULTIPLE CASCADES
1. Make only the set of choices you are more capable of making than anyone else
2. Explain the choice that has been made and the
reasoning behind it 3. Explicitly identify the next downstream choice 4. Assist in making the downstream choice, as
needed 5. Commit to revisit and modify the choice based on
downstream feedback
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Copyright © 2015 Roger L. Martin
TAK!
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Twitter: @RogerLMartin Email: Martin@Rotman.Utoronto.ca Website: www.RogerLMartin.com
Strategy Toolkit: www.hbr.org/tools/PTW