Why Executives Fail & How to Avoid It

The ‘Peter Principle’ concerning why managers fail derives from a broader theory that anything that works under progressively more demanding circumstances will eventually reach its breaking point and fail. The Spanish philosopher José Ortega y Gasset, who was decidedly anti-establishment added, “All public employees should be demoted to their immediately lower level, as they have been promoted until turning incompetent”.

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The Peter Principle is an observation, not a panacea for avoiding it. In his book The Peter Principle Laurence J. Peter observes, “In a hierarchy every employee tends to rise to his level of incompetence … in time every post tends to be occupied by an employee who is incompetent to carry out its duties … Work is accomplished by those employees who have not yet reached their level of incompetence.”

Let’s find out what the drivers are behind a phenomenon that may be costing the economy grievously, what the warning signs are and how to try to avoid getting into the mess in the first place.

Drivers Supporting the Peter Principle

As early as 2009 Eva Rykrsmith made a valuable contribution in her blog 10 Reasons for Executive Failure when she observed that ‘derailed executives’ often find themselves facing similar problems following promotion to the next level:

The Two Precursors

  • They fail to establish effective relationships with their new peer group. This could be because the new member, the existing group, or both, are unable to adapt to the new arrangement.
  • They fail to build, and lead their own team. This could again be because they or their subordinates are unable to adapt to the new situation. There may be people in the team who thought the promotion was theirs.

The Two Outcomes

  • They are unable to adapt to the transition. They find themselves isolated from support groups that would otherwise have sustained them in their new role. Stress may cause errors of judgement and ineffective collaboration.
  • They fail to meet business objectives, but blame their mediocre performance on critical touch points in the organization. They are unable to face reality. Either they resign, or they face constructive dismissal.

The Warning Signs of Failure

Eva Rykrsmith suggests a number of indicators that an individual is not coping with their demanding new role. Early signs may include:

  • Lagging energy and enthusiasm as if something deflated their ego
  • No clear vision to give to subordinates, a hands-off management style
  • Poor decision-making due to isolation from their teams’ ideas and knowledge
  • A state akin to depression and acceptance of own mediocre performance

How to Avoid a ‘Peter’ in Your Organization

  • Use succession planning to identify and nurture people to fill key leadership roles in the future. Allocate them challenging projects, put them in think tanks with senior employees, find mentors for them, and provide management training early on. When their own manager is away, appoint them in an acting role. Ask for feedback from all concerned. If this is not positive, perhaps you are looking at an exceptional specialist, and not a manager, after all.
  • Consider the future, and not the past when interviewing for a senior management position. Ask about their vision for their part of the organization. How would they go about achieving it? What would the roles be of their subordinates in this? Ask yourself one very simple question; do they look like an executive, or are you thinking of rewarding loyalty.
  • How to Avoid Becoming a ‘Peter’ Perhaps you are considering an offer of promotion, or applying for an executive job. Becoming a ‘Peter’ at a senior level is an uncomfortable experience. It has cost the careers of many senior executives dearly. We all have our level of competence where we enjoy performing well. It would be pity to let blind ambition rob us of this, without asking thoughtful questions first. Executives fail when they over-reach themselves, it is not a matter of bad luck.

What Heijunka Is & How it Smooths Call Centre Production

The Japanese word Heijunka, pronounced hi-JUNE-kuh means ‘levelling’ in the sense of balancing workflows. It helps lean organizations shift priorities in the face of fluctuating customer demand. The goal is to have the entire operation working at the same pace throughout, by continuously adjusting the balance between predictability, flexibility, and stability to level out demand.

Henry Ford turned the American motor manufacturing industry upside down by mass-producing his iconic black motor cars on two separate production lines. In this photograph, body shells manufactured upstairs come down a ramp and drop onto a procession of cars almost ready to roll in 1913.

Ford 'Model A' Line in 1913

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Smoothing Production in the Call Centre Industry

Call Centres work best in small teams, each with a supervisor to take over complex conversations. In the past, these tended to operate in silos with each group in semi-isolation representing a different set of clients. Calls came through to operators the instant the previous ones concluded. By the law of averages, inevitably one had more workload than the rest at a particular point in time as per this example.

 

 

 

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Modern telecoms technology makes it possible to switch incoming lines to different call centre teams, provided these are multi-skilled. A central operator controls this manually by observing imbalanced workflows on a visual system called a Heijunka Box. The following example comes from a different industry, and highlights how eight teams share uneven demand for six products.

This departure from building handmade automobiles allowed Henry to move his workforce around to eliminate bottlenecks. For example, if rolls of seat leather arrived late he could send extra hands upstairs to speed up the work there, while simultaneously slowing chassis production. Ford had the further advantage of a virtual monopoly in the affordable car market. He made his cars at the rate that suited him best, with waiting lists extending for months.

A Modern, More Flexible Approach

Forces of open competition and the Six Sigma drive for as-close-to-zero defects dictates a more flexible approach, as embodied in this image published by the Six Sigma organisation. This represents an ideal state. In reality, one force usually has greater influence, for example decreasing stability enforces a more flexible approach.

Balancing Predictability, Flexibility, and Stability to Level out Demand

Years ago, Japanese car manufacturer Toyota moved away from batching in favour of a more customer-centric approach, whereby buyers could customise orders from options held in stock for different variations of the same basic model. The most effective approach lies somewhere between Henry Ford’s inflexibility and Toyota’s openness, subject to the circumstances at the moment.

A Worked Factory Example

The following diagram suggests a practical Heijunka application in a factory producing three colours of identical hats. There are two machines for each option, one or both of which may be running. In the event of a large order for say blue hats, the company has the option of shifting some blue raw material to the red and green lines so to have the entire operation working at a similar rate.

Diagram of a Heijunka

Predictability, Flexibility, and Stability at Call Centre Service

The rate of incoming calls is a moving average characterised by spikes in demand. Since the caller has no knowledge whether high activity advisories are genuine, it is important to service them as quickly as possible. Lean process engineering provides technology to facilitate flexibility. Depending on individual circumstances, each call centre may have its own definition of what constitutes an acceptably stable situation.

Is Your Project Agile, a Scrum or a Kanban?

Few projects pan out the way we expect when starting out. This is normal in any creative planning phase. We half suspect the ones that follow a straight line are the exceptions to the rule. Urban legend has it; Edison made a thousand prototypes before his first bulb lit up, and then went on to comment, “genius is 1% inspiration, 99% perspiration”. Later, he added that many of life’s failures are people who did not realize just how close they were to success when they gave up.

So be it to this day, and so be it with project planning too. There is no one size fits all approach when it comes to it. Agile, Scrum and Kanban each have their supporters and places where they do well. Project planning often works best when we use a sequential combination of them, appropriate to what is currently happening on the ground.

Of the three, Agile is by far the most comprehensive. It provides a structure that begins with project vision / conceptualisation, and goes as far as celebration when the job is over, and retrospective discussion afterwards. However, the emphasis on daily planning meetings may dent freethinking, and even smother it.

Scrum on the other hand says ‘forget all that bureaucracy’. There is a job to do and today is the day we are going to do it. Although the core Agile teamwork is still there it ignores macro project planning, and could not be bothered with staying in touch with customers. If using Scrum, it is best to give those jobs to someone else.

The joker in the pack is Kanban, It believes that rules are there to substitute for thought, and that true progress only comes from responsible freedom. It belongs in mature organizations that have passed through Scrum and Agile phases and have embarked on a voyage towards perfection.

That said, there can be no substitute for human leadership, especially when defined as the social influence that binds the efforts of others towards a single task.