Thursday, May 13, 2010

Self-Directed Teams and OD Challenges

Today in the Organizational Behavior class we were discussing the case of MediSys, which was dealing with a project team working on a product development and launch. Conflict emerged on the grounds of lack of legitimacy and operating in silos. Reflecting back, it occurred to me that I have seen something similar too many times in many different organizations.

What basically happens - people are put together in a project "team" to achieve a "common" objective. Who have I put the quotes? We can go into lengthy discussions on what we call a team and whether any group of people working together can be referred to a s a team. Secondly, achieving a shared understanding of goals is not an easy task as it might appear on the surface. There are instances when group members would claim that they have a common objective, while in reality each one of them would be pursuing individual goals or the goals of that particular department the person has been deployed from to form part of the project group. Silo mentality is deeply  ingrained in human psychology on the simple account of subconscious self-identification and the selective function of our brain (i.e. it´s mine/ours, therefore best/correct/right/better/etc; we refuse to see the position of others).

I wish to give an example of how this problem was tackled in one of the leading banks in South Africa (I am not disclosing the name because of the obvious reasons). There used to be three functions working on the same task (providing loans to customers): risk analysts, sales/customer managers and admin services. They were reporting into different departments with little horizontal integration. Sales were the driving force to get the product sold to the customer. Risk people liked to take their time in doing background checks and running all sorts of models, which the Sales did not like and sometimes concluded deals before Risk´s go-ahead. Admin was least motivated among the three and it would take them all the available time to get done with all the papers. The structure did not work and the bank was losing customers, hence money.

The Organizational Development department recognized the issue and came up with the idea of self-managing groups (sometimes called self-directed teams). From then on, teams consisting of three people were created with their compensation linked to the overall success of the team. Results were incredible. Once people were motivated to deliver faster, cooperate and go an extra mile, they suddenly saw the value-add in everything they were doing. Reporting lines were adjusted accordingly with very little managerial effort, since the teams were managing themselves in most situations.

Thus, instead of the programmatic approach many people like so much (program management strategy, strict controls, corporate policemen, etc) it is better to assume the emergent change philosophy and rely on the organization as a living being to find its own ways to manage itself. It is riskier but in the long run can be much more rewarding. Most difficult thing, as usual, --- to let go.

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