Tuesday, September 16, 2008

How Do You Define and Align Expectations at Different Levels in an Organization?

If you're a brick layer, it's very easy to determine who the best brick layer is. Count the bricks. Some smart, clever brick layer may come up with a more effective way to lay bricks.  That’s wonderful and they may become a lead brick layer and be deemed a "leader". 

If we want to improve things, we might decide that it's a good idea to have someone coach a team of brick layers. We might say that a coach should work with 11 brick layers to find ways to make them all more effective. Determining the most effective coach is pretty easy. Count the total number of bricks laid by each team. You'll find that some coaches are more effective than others. 

Experience and brick laying skills are probably important to the coach.  If the coach has previously worked as a brick layer, it's reasonable to assume they'll be more empathetic and effective. Good coaches will also have different ways of organizing their teams, different methods of laying bricks, different attitudes towards laying bricks, etc. Clever coaches will use different techniques to maximize their teams.  If you’re laying bricks in the mountains you might want different types of people than if you’re laying bricks in a dessert.  Still, it’s pretty easy to measure a coach’s effectiveness. 

Now, let's say that we want to create a larger organization. We might have a division. A division consists to 10 teams of brick layers. In order to resolve disputes and make things more organized, we might say that we have a division head. This is necessary because everyone is trying to improve so there are competitions between our brick laying teams. [Editor: teams from the Big-10 seem particularly skilled at laying bricks…]

Now, the skills necessary to be an effective division head are not necessarily the same skills necessary to be a good brick layer or even a good coach. Also, complicating the issue, how do you measure who is an effective division head? Looking at the total number of brick laid might be effective, but they are pretty far removed from the brick laying process and the things they handle on a day-to-day basis are probably not similar to the brick layers or the coaches. 

If we elevate this one more level and create a league, the problem becomes even more obvious. The league is composed of 10 divisions. Some of these divisions are in the mountains, others are in the dessert and others have to deal with great lakes and snow storms. The types of bricks that each division can get are different just as laying bricks at 2,000 feet above sea level presents different challenges from laying bricks in the dessert, which is completely different from laying bricks in the middle of a Wisconsin winter. 

How do we determine if our league commissioner is effective? A brick layer or a coach may have innovative ideas and it's easy to asses their effectiveness. But determining the effectiveness of a division or league commissioner is more problematic. 

How would you approach this?

2 comments:

Anonymous said...

Very nice analogy Andrew!

To determine how a league commissioner is effective would take several pieces of data to accurately and effectively rate this individual.
First, what are their individual goals? For example, Were the given goals to grow their teams by "x" amount? Did they succeed? If they did succeed, by what means did they grow? We can go through numerous examples to qualify if they had and or met those goals.
Were they rated in a "360" means of evaluation? Meaning, were they evaluated by those not just above them, but also below them and those who are in parallel positions? If so, what was the feedback?
On top of being a Quantitative Analyst, I am also a Registered Investment Advisor and Retirement Planner. My General Manager whom has control of the entire State of Wisconsin and the Upper Peninsula is rated in the top 10 of the entire nation (..out of 182 GMs..) for the company. According to his supervisors and up, this man walks on water and has been offered a Vice President position (..which he turned down..) Now, if he had been evaluated by the Advisors and Brokers underneath him, the walking on water may have turned into drowning for him. He has acquired this reverance amongst the senior management of the company by "Drinking the kool-aid" that the company offers. He must meet certain numbers in order to be considered "successful." However, these numbers are acquired by turning broker against broker and creating a cut throat environment. This individual also puts other brokers who in turn, take a sip of the kool-aid he is offering, up on a mantle as the ones to emulate and mentors the young brokers after them. Part of this image does not include the client return on investment or the satisfaction of our clients. These numbers are soley based upon the amount of "new money" that is brought into the firm regardless of how it was brought in or how much this may hurt the client. But yet in the eyes of senior management, he is a rockstar.
This is an example of a very poor evaluation of a "League Commissioner" that perpetuates the negative aspects of a company.

So to define expectations at numerous levels in an Organization, we must first have the environment that this action is even allowed and encouraged. Secondly, the expectations must also be enforced. Setting expectations is the easy part; enforcing them is the hard part. In my opinion, these must be done from more than the eyes of the superiors, but also at the levels below in order to acquire true efficasy.
But then again, this is just my opinion.
Take care Andrew,
Anthony

Andrew Meyer said...

Anthony,

I agree with you. Often times, if division heads and commissioners are evaluated, it's only by those above them. They should have clearly set expectations and everyone, above and below, should know what those expectations are. Ideally, those expectations align with the goals of the firm.

Andy