While one of the core values of the Adizes Institute is client confidentiality enough time has passed and permission has been granted to allow us to share this client closeup describing our work with Bank of America.
Mont McMillen is not quick to embrace trendy management theories, nor is he in awe of outside consultants. But for the last several months, the executive vice president and head of the North American Division (NAD) has been actively applying throughout NAD the principles of Dr. Ichak Adizes - a prominent, sometimes - controversial advisor to management.
“Adizes doesn’t come into an organization claiming he can solve its problems”, says Mont. “He has a methodology that allows groups of people to identify and solve their own problems. The method isn’t terribly unique or mysterious, but it is sound, and we need some fresh, sound ideas to help us cope with the dramatic changes we face”.
When he first heard Dr. Adizes present his ideas last January, Mont says he saw a good fit between NAD’s needs and what is called the Adizes method. “His concepts on how to harness conflict, how to bring people from different units, with diverse skills, styles, and points of view, and how to create teams that could combine the authority, power and influence needed to turn theoretical answers into practical solutions that get implemented-all struck a responsive chord”. Fundamental to the Adizes method is the theory that an organization (or a division for that matter) has four primary roles or duties it must perform effectively. It must effectively produce the results for which it exists. It must be administered; that is, its decision must be made in the right sequence, with the right timing, and with the right intensity. It must be entrepreneurial, which requires creativity and the willingness to take risks. Finally, an organization must be integrated, which means that individual goals must be harmonized with group goals by unifying people around a common cause.
These four primary roles of an organization (Producer, Administrator, Entrepreneur and Integrator) are also the four primary roles a manager must play. And, yet, a major principal in the Adizes method is that no one person can perform these four roles effectively. In addition, an individual manager rarely has all the power, authority and influence needed to carry out the different functions of these roles.
Says Dr. Adizes: “I claim that the ‘textbook manager’, who is knowledgeable, organized, detailed and thorough and also a charismatic, creative, risk-taking leader, who is good at interpersonal relations, sensitive to human needs, and a team builder - doesn’t exist. We’re all looking for some genius, some incredible human being who will have no faults. And, because of our level of expectations, and because no person can fulfill them, we’re continuously frustrated by all the people around us, above us, and below us”.
In short, Adizes assumes that all individual managers are - almost by definition and certainly in practice-mismanagers. That is, they are deficient in their abilities to perform one or more of their primary roles. The solution to this mismanagement crisis is team management, and a central idea behind the Adizes method is that the right combination of different people with different styles - producer, administrator, entrepreneur, and integrator - will produce good management.
Unfortunately, this combination of managers with divergent skills and styles creates conflict. This fact of human nature leads to Adizes’s second major principle: “Never resolve conflict”, he says. “Harness it”. Channel it, but never resolve it. The only time you need to resolve conflict is when you’re dead. And how do you harness conflict? By basing relationships on mutual trust and respect.
Building teams of managers who can work together to produce, administer, act entrepreneurially, and integrate an organization is at the heart of the Adizes method. But improving interpersonal relationships is not its purpose. Helping to solve organizational problems and adapting to change is.
NAD’s major problems, according to Mont, had a common theme - the same theme Adizes sounded - the need for teamwork. “Most of our difficulties had to do with the way NAD and its clients needed to interface and work cooperatively with other units within the division and with the rest of the bank”, he says. “Some units in the bank can perform with relative independence. But our customers regularly use not only our services, but through us, the services of World Banking units, as well as the California corporate and retail operations. For us, trans divisional coordination is a business necessity because we are irrevocably tied to the rest of the bank. Unfortunately, this coordination, not to mention communication, didn’t always exist, and we didn’t have the capability to solve the problem alone because some of the solutions were outside NAD’s authority. What we needed most as a division was a logical methodology to identify our specific problems and attack them one by one. The Adizes method came along at the right time, and, I feel, fit the bill”.
In June 1983, NAD’s senior officers met to hear Dr. Adizes introduce his concept and to form what is called, in the special language of the Adizes method, a participative organizational conduit, or POC, for short. A POC is a permanent group of people who represent an organizational unit. The POC then engaged in a synergetic diagnosis of the division. It was a comprehensive three-day examination of the division’s mission and the areas which it could improve. The senior officers participating identified a large number of divisional problems, or, again in the language of Adizes, potential improvement points (PIPs). The concerns ran the gamut from cross divisional coordination, personnel policies, and the planning process, to pricing decisions and competitor’s products. The problems were ranked according to their priority to the division, and those at the top of the list were assigned to special teams for resolution.
Since the POC couldn’t address every issue, NAD formed other POCs, to focus on particular areas of concern. Tom Cleveland, Vice President and Manager of the Los Angeles International Banking Office (IBO), and a member of the NAD POC formed an IBO POC. How many PIPs did the IBO POC produce?
“I wouldn’t want to list them all”, says Tom. “After all, PIPs are potential improvement points. I’d rather focus on results”. One of the problems Tom’s group identified was the long delay processing telephone remittance orders. “Each day our office in Los Angeles takes between 300 and 600 international money transfer requests from as many as 500 California branches. On the average, a branch officer would be on hold 30 minutes before being able to process a money transfer. That was simply not acceptable service. It was poor performance as far as we were concerned, as far as the branch was concerned and as far as our customers were concerned. So we formed a special team to address that specific issue. The team was a multi-discipline group and included people from California Division, the Audit department - and from IBO - two officers from Money Transfer and three Telephone Remittance operators. The assignment we gave the team was to make sure all the calls were answered within five minutes and not to solve the problem by increasing staff. Those were the criteria we imposed upon them, and, frankly, the task seemed impossible. But at the same time, we also gave the team the freedom of thought and action to find an innovative solution. And they did”.
Tom credits the members of the team for the solution - primarily a matter of scheduling, coordination, and minor equipment changes - but he also acknowledges the Adizes method made the solution possible. “I was a skeptic when I first heard about Adizes. I think most of us were. It takes some time to get comfortable with the method; the rules can be strict; and there’s too much jargon. But the results we began to get - not just on the problem I’ve told you about, but on several others - changed my mind”.
How does the Adizes method help people solve problems that proved intractable before? “It makes you bleed a lot”, says Tom. “I’m serious. When you’re in that three-day group discussion in which you identify all your business problems, you’re concentrating every moment on everything you’re not doing right. But the experience - in fact, the strict rules of the meeting - force you, maybe for the first time, to really listen to what other people are saying. And when you do begin to listen, you begin to realize that maybe you don’t have all the answers, and maybe you do need someone’s help. You stop judging people’s ideas on the basis of whether you like the people or the cut of their hair, and start judging their ideas on whether they make sense. You also become a little more objective about your own abilities. At some point you helicopter out your entrenched, personal point of view and see issues objectively. You gain the distance, the intellectual honesty, the maturity, to stop seeing issues as turf battles and start seeing them from the point of view of what’s good for the organization. It’s a painful process - honesty hurts - and that’s what I meant by bleeding. But from that experience, which every member of the group under-goes, comes a great deal of mutual trust, understanding, and respect. And you begin to work as a team”.
The special meeting, in which the problems are identified, is the first major step. The second, solving problems, is the job of the individual teams.
“The Adizes method takes a very logical approach to solving problems", says Tom. “It assigns the PIP to a team that is made up of the people who actually know the problem first-hand. Traditionally, managers try to solve problems by themselves. They sit in corner offices behind closed doors and try to come up with solutions. Often, they didn’t have any direct experience with the problem; they may not even precisely know what the problem is; and they frequently don’t foresee the real consequences of their decisions. They end up producing memos rather than solving problems. An Adizes team, on the other hand, is made up of people directly concerned with the issue - officer, non-officer, it doesn’t matter.” Such a team bears some similarity to a quality circle, but the differences are significant. An Adizes team is assigned a specific task to perform or problem to solve, always within a set period of time. When the problem is solved, the team disbands. Most importantly, this team has what Adizes calls “capi”, which he defines as the coalesced authority, power and influence sufficient to make decisions and implement them.
“Giving people the responsibility, as well as the ability, to solve problems that directly affect them is a powerful motivator", says Tom. “People have the opportunity - for many it’s the first time - to solve their own problems. What you’ve given them is ownership and the chance to exercise their own intelligence. As a result, the environment within an Adizes team can be dynamic; the ideas just geyser up. And the people involved become very positive about change because they have been able to contribute and derive the benefits from it. There’s nothing particularly special about the method, except that it actively employs some basic logic of human nature.”
Tom says several other teams have been at work within IBO POC. Some have been concentrating on operational procedures, such as tracking and computing transaction costs and improving the accuracy of accounting systems, both of which, he says, potentially can save tremendous amounts of money. Another team is working on a new structure for the IBO’s Personal Banking Department that will consolidate functions, increase efficiency, and help us in our business strategies for 1984 and beyond.
The NAD and the IBO POC’s are only two of the five POC’s that have been formed in the bank. Len Linden, Vice President of Special Studies and overall coordinator for the Adizes method at the bank, says that when NAD formed its own, as well as an IBO POC, a Treasury POC was also created. "This Treasury POC was the first of our truly multi-discipline groups," he says. “Its members came from NAD, Cashiers, and from Bank Investment Securities Division. You can see that NAD first looked at the division wide concerns with the NAD POC, next focused more narrowly on the IBOs, and then concentrated on cross-divisional issues in the Treasury POC.”
But many of the issues the first three POCs were raising couldn’t be addressed without the participation of other units in the bank. So, the next POC formed - the Wholesale - U.S.A., or, WUSA POC - was even more broadly based. Its members came from NAD, Global Systems Services, World Banking Administration and from Retail Financial Services. Finally, a Corporate POC was formed, whose mission is to address those problems that require bank-wide participation.
Len says it’s too early to tell how many more POCs will be formed or to what extent the rest of the bank will use the Adizes method. “I think the response, on the whole, has been very positive, and I am sure we will be using the Adizes method where there is a clear need for it. But this is only one of several ways the bank is trying to bring about change.” Mont agrees. “The Adizes method isn’t a panacea but is filling a need at a particular time. Today, the bank is faced with a difficult period in our history, and we must change in order to survive. Any catalyst for change, any method that helps people manage change as a natural part of their job, is a good one. And this is a good method. It promotes mutual trust and responsibility. It helps create teamwork. And, to me, it has at its core an important tenet-tenacity. It says, if you’ve got a problem, don’t let it go until you’ve resolved it. It’s not an easy discipline, but one of the results is great: It gets everyone to pull their oars in the same direction.”
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