Senior managers are often reluctant to break rank and suggest bold new ways of working or indeed to back their colleagues in taking such decisions, preferring to stick to the safe, tried and tested middle ground.
This means that early opportunities are frequently missed and it becomes ever more difficult to initiate much needed change or bold decision-making due to organisational inertia.
We propose that all board papers looking for investment authority or other decision making must include a ‘Bold Move’
All too often, as managers rise up the ranks of an organisation, they feel that they have more to lose and so become more risk averse. This can lead to stagnation where those in the best position to initiate radical change and innovative solutions – as a result of their access to financial and staffing resources – are the least likely to do so.
Senior managers are often reluctant to break rank and suggest bold new ways of working or projects, or indeed to back their colleagues in taking such decisions, preferring to stick to the safe, tried and tested middle ground. This means that early opportunities are frequently missed and it becomes ever more difficult to initiate much needed change or bold decision-making due to organisational inertia.
We believe that there needs to be more use of the carrot and the stick to encourage more radical decision making at all levels, particularly at the most senior levels. We propose that all board papers looking for investment authority or other decision making must include a ‘Bold Move’. This option, alongside the main recommendations, will be an alternative for the board to consider. The 'Bold Move' proposal should be a strategy option that has an additional element of risk, and potential reward, over and above the other strategy options submitted for decision.
This ‘Bold Move’ is essentially a way of ensuring that the safe way is not the only one proposed. Although it is essentially a small change in process, it aims to move the management team’s mindset away from risk aversion and ensures that a more radical solution is at least contemplated. It must also be backed up by the wider culture and reward system. If the Bold Move proposal is accepted, there must be collective responsibility for the outcome, to prevent a culture of blame, and similarly shared rewards for its successful implementation, with the proposer credited accordingly.
An example of a Bold Move that we discussed was the radical new pricing policy that was adopted in British Airways by Simon Talling-Smith as part of the Customer Enabled BA programme. Rather than making incremental changes to the price structure that had thousands of different discounts, the project team took the radical approach and started from a blank sheet of paper and were able to implement a new price structure with a minimal number of options.
Although the inclusion of a Bold Move on every board paper might seem like a relatively small change, the impact could be radical. It signals that the organisation is serious about attempting to avoid organisational inertia and adopting more radical solutions. It is also a signifier of cultural change. Without significant change in the way in which responsibility is shared and rewards are allocated, the Bold Move idea is unlikely to be more than a flash in the pan.
The first step to implement the Bold Move suggestion is to recognise that decision making has become too risk averse. Then, in theory, it would be relatively easy for the Bold Move to be implemented, as it is simple to ensure that a Bold Move must be included on each Board paper.
However, the underlying cultural changes and the move to more collective responsibility and reward structures would be more difficult to implement, but, without them, the Bold Move method is unlikely to result in radical change.
Implementation
In order for the Bold Move to be a success, it needs buy in from the top. The board will need to be aware of what the Bold Move is about and why it is necessary. The CEO will also need to be a key backer of the idea. Once she is on board, an email or note on the company’s portal will need to be made, describing the Bold Move programme and its rationale. After communication of the change in format to board/investment papers has occurred, a new template will be distributed.
An individual will also need to be nominated to track progress. He or she will then review each Bold Idea as it is presented and explained. Fine tuning may be necessary as the programme is rolled out.
Throughout the implementation process, we can observe the success of the programme by monitoring the reactions to those involved in making board recommendations – in particular, their reaction to the change in the process. Communication from the top, providing the rationale for the Bold Move process, will help mitigate any employee adverse reactions.
The quality of the ideas proposed will also be an important metric as to the programme’s success. Another important measurement of success will be whether any new ideas come about from the Bold Move process and how successful they are. Finally and most importantly, we will know whether the implementation has become successful if there is indeed a change in attitude and culture as regards manager risk aversion.
Silvia Agrestini, Daniel Marion, Kate Myers, Paul Rutter, Michael Roumbanis, Dimitrios Stoimenou, Rik Voorn
London Business School; Executive MBA 2011 (SEMBA2011)
Bravo, a simple but potentially highly effective idea!
You've laid out some of the essential features and a couple of risks to mitigate in implementing the idea, which seem sound. My question is this: how could the Bold Move requirement be linked to corporate strategy? As you point out, there are many ways to characterise a Bold Move, which offer opportunities to game the system and bias decision making.
My build would be to find a way to express features of the corporate strategy (target markets, target customer groups, target offers) as vectors requiring Bold Moves as well as incremental initiatives. For example, if a consumer products company wants to enter an emerging market, the incremental play is to find a local channel for current products. The Bold Move might be to buy a local player and co-opt its brand to sell the new owner's products. If that's an acceptable example to the CEO, she could publish "Acquisitions" as a viable Bold Move category. Simplistic, but you see where I'm going.
Do you have any thoughts on how to define useful boundaries or target categories of Bold Move, to help adoption?
Well done, and good luck!
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A very good idea / hack! Post credit crisis, many bold initiatives like major cost cutting, including several rounds of redundancies, cutting major projectrs, re-focusing the business, etc., were taken across the organisations. These were a reaction to an event. Firms / managers shouldnt necessarily wait until a major event occurs to act boldly, but instead pro-actively plan initiatives so as to avoid detrimental events from occuring. So, if the Bold moves can be implemented successfully post an event such as the economic crisis, I guess that what your hack is suggesting is why can't similar Bold moves become routine in the Management agenda.
Picking up on the challenges you mention, one way to implement this would be to separate out individuals who make suggestions for Bold Moves and keep these suggestions anonymous. Once agreed within the management committee, this could be trickled down to the rest of the organisation and stakeholders. By implementing the Hack using this approach, managers will feel comfortable making suggestions instead of taking on the entire responsibility of the success or failure of the move. This will also potentially encourage more managers to stand-up and make 'Bold' suggestions, potentially eliminating the challenges you have highlighted.
Another critical element during the initial and implementation phase of a 'Bold' move will be communication. Communication will become more important as these 'Bold' moves will potentially break the norm and take people out of their comfort zones. By gaining 'buy-in' at appropriate levels and making changes accordingly, this process could be made much easier.
Some questions worth considering are:
How do you incentivise managers to come up with 'bold' recommendations with significant business impact?
How do you structure the communication / implementation of such 'bold' recommendations?
LBS Group 9 Hackers
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