Catalysts: Gaining Control by Letting Go
Prophet’s 2023 Catalyst research highlights how governance can enable both alignment and autonomy. “Letting go” of control puts the right people in charge of the right decisions.
This article is the third in a series based on our latest research, Catalysts: How to Build an adaptable organization that thrives during uncertainty. Conversations with senior executives in multiple industries helped us define concrete steps leaders can take to create a sense and structure for shared ownership within the organization.
In his now-famous address to Congress in 1961, President John F. Kennedy laid out an audacious goal of landing a man on the moon and returning him safely to the earth.” The President lauded the endeavor’s impressiveness to humankind and its importance to future space exploration. The speech also represented an unspoken political gauntlet throwdown: pitting the distributed intelligence and decision-making of the US’s market-based economy against the Soviet top-down, centrally-planned model.
At the time of JFK’s speech, and for the better part of the twentieth century, management theory favored predictability and consistency as means to economies of scale. This resulted in streamlining business processes and organizational structures to maximize standardization and minimize marginal cost. Whole disciplines such as Toyota Production System (TPS), Six Sigma, and Lean emerged as proven methods with terrific results when implemented well.
Today we operate in a very different economy. The advancement of digital technology has upended the economics of value creation. As a result, we live in a world that is more unpredictable. Today’s leaders must channel President Kennedy’s faith in systems with distributed intelligence and decision-making to thrive. Rather than centralize decision-making, leaders can gain better control through the twists and turns of the market by “letting go” – empowering autonomy and decision-making within their organizations by establishing the organizational structures, processes and culture to make it successful.
The Benefits of “Letting Go”
Leaders and managers who look at the big picture quickly realize that delegation of authority greatly benefits the firm and its customers. The company gains strategic agility because it can pivot faster to respond to market shifts. Customers benefit because “bringing authority to the information” increases customer intimacy, driving the development of more relevant and impactful products, services
, and experiences.
Additionally, shifting decision rights lower in the organization drives greater employee engagement, resulting in a 23% productivity increase, according to Gallup’s 2020 meta-analysis. It also delivers a radically improved employee value proposition, as demonstrated by significantly increased retention and ratings for employee wellbeing.
C-suite leaders that we interviewed for this series told us they are working hard in 2023 on letting go. “This is a major cultural shift that we need to make in order to unlock the potential of the great talent we’ve hired and the leaders we have on deck,” says the Vice President of Talent of a multinational e-commerce company. “We constantly ask ourselves, `What can we do today to step out of their way and unleash that potential?'”
Three Critical Shifts for Empowering Autonomy and Decision-Making
“Organizations often underestimate what’s required to release control and still achieve results,” says Jane Hanson, former Chief People Officer of Nationwide Building Society, the UK’s third largest mortgage provider. “It’s not just a matter of leaders stepping back and declaring others are empowered. It’s about building the scaffolding and putting the right systems in place to help people be successful.”
Empowered teams need the authority to make or influence business decisions. As recently as 2015, just 11% of US workers said they could consistently influence decisions critical to their work. However, it takes more than just leadership’s permission to “let go” successfully. Teams also need the organization’s formal structures, the “Body”, to follow suit. Through our research, we uncovered three critical structural changes required to enable more adaptive and resilient organizations.
1. Clear Vision, Goals and Accountabilities
To operate with agency, teams need clarity on the strategic direction for the company overall, what success looks like, and how the team contributes to the larger organization. A clear vision and goals at the organizational level establish a “north star,” while breaking enterprise goals down to team-level outcomes and accountabilities gives the team the direction they need to make effective decisions on prioritizing their efforts.
How goals are framed is equally as important. JFK aimed “to land a man on the moon and return him safely to Earth.” The goal is ambitious and transparent, and its outcomes are easily measured (an astronaut either returns to Earth or they don’t). Yet the goal does not prescribe outputs or how to achieve it. The goal doesn’t stipulate the spacecraft’s design, the mission’s trajectory, the number of crew, etc. Instead, NASA was responsible for determining how they would accomplish this goal. By articulating goals as outcomes (versus outputs) and holding teams accountable to those outcomes, organizations can create greater resiliency and scale by delegating the “how” to teams.
Outcome-oriented goals can also become an essential facet of the company culture. A senior product leader at one of the world’s largest tech firms shared, “When we pass someone in the hallway that we haven’t seen in a while, typically the first question you ask is ‘what’s your goal?’ not ‘who are you reporting to?’ or ‘what project are you working on?’ Everyone understands what the company’s goals are. It’s actually how we navigate the organization.”
2. Transparent and Responsive Resource Allocation
In addition to clarity on outcomes and accountability, teams also need resources to achieve their goals. Delivering great products, services
, and experiences takes human effort, financial resources , and technological capabilities. Simply having access to those resources is not enough. Teams also need the ability to reallocate those resources to pivot quickly. Too often, financial planning and allocation of talent is an annual process that, for most organizations, is far too infrequent to facilitate effective pivots. Faced with emerging opportunities or market shifts, teams can often find themselves saddled with resources committed to one project while watching opportunities for higher and better use of those resources pass by. Redirecting resources usually takes time and attention-consuming escalation to senior leadership.
“Letting go” often requires redefining how resources are allocated within an organization, making those processes more agile and giving teams greater autonomy in regular resource reallocation.
3. Cross-Functional Work
Reorienting teams around outcomes versus outputs can be liberating but requires more cross-functional work. Rather than being accountable for a single activity or component, teams responsible for business outcomes, such as customer satisfaction, operational efficiency or launching a new product, need the talents of many functional domains that often operate in silos.
Organizations seeking to become more resilient and adaptive by “letting go” should find ways to accelerate cross-functional collaboration. That could be by shifting the organization’s structure outright, such as to agile teams or matrix models, or by evolving how individuals and teams are aligned to work.
Putting “Letting Go” Into Practice Across the Organization’s Mind, Body, and Soul
Every organization can find its way to the level of shared, distributed decision-making that best fits its strategies and goals. Using our Human-Centered Transformation Model to think holistically, here are some actionable ways leaders can empower autonomy and decision-making within their organizations.”
DNA: Define the Strategic Destination
- Make decision-making faster and easier at all levels by promulgating clear and compelling statements of corporate purpose with well-articulated values to support it. The clearer they are, the easier it is to trust that decisions will be made consistently at all levels.
- Identify where autonomy and decisiveness are best aligned with company values.
- Celebrate significant decisions that are well-aligned to purpose and values.
Mind: Enable Employees With Necessary Skills and Knowledge
- Shift hiring practices to include problem-solving and cross-functional collaboration, not just hard skills.
- New responsibilities require new capabilities. Create learning and development resources that help employees build an ownership mindset and cultivate the underlying skills, such as data analysis, to contribute to better decision-making.
Body: Provide Structure and Governance to Deliver the Strategy
- Charter work for business outcomes and empower decision-making in the teams that need to achieve them.
- Simplify governance models as much as possible by moving decision makers closer, if not into, the work process.
- Advance managers into true coaching models that avoid micromanagement.
- Ensure all relevant employees can access the data, systems, and inputs they need to make the best decisions.
Soul: Motivate and Ignite Belief in the Strategy
- Reward progress in decision-making quality, speed and accountability, not just outcomes.
- Spotlight employees who demonstrate an ownership mindset and recognize them publicly.
- Champion new leadership behaviors.
Achieving organizational resiliency by “letting go” requires organizations to rethink how they set goals, manage their resources, and structure their teams – no small undertaking. Yet leaders who can make the shift from top-down control to delegating accountability and decision-making are rewarded with more autonomous and engaged employees, faster decisions, and better outcomes for both their companies and customers. Even if their ambition may not be to land a human on the moon, their organizations may achieve something truly transformational.