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Interactions Between Organizations

The Executive Review Board

The Executive Review Board is composed of all the executive officers of the company. This board negotiates with GMs the mix of profitability and development activities required to maximize long-term success.

When a product family misses its targets, either for profitability or for long-term development, the Executive Review Board reviews the product family to ascertain the cause of the problem. Outcomes may include changes as simple as lowering profitability expectations, and as significant as terminating the product family or replacing the general manager.

The Executive Review Board will have quarterly reviews with GMs; ideally, these meetings would be held just before the quarterly Board of Directors meetings.

Guideline for Product Line Goals and Milestones Negotiation

The normal process for setting product family goals would be:

The GM team prepares a plan that includes key development milestones, U.S. profitability targets, and worldwide unit sales targets. This plan is presented to a group which includes the Executive Review board, the other GMs, and the FMs. The other GMs have as an explicit review purpose the task of identifying opportunities for powerful integration across product families.

If a GM identifies an opportunity for powerful integration, a team is established to assess the cost/benefit of that integration (in the simple case, this team is just the GM who identifies the opportunity and the GM who is presenting the plan). If the Executive Review Board decides the benefits to the company are great enough, the profitability targets will be lowered to accommodate the additional development cost needed for the integration.

The Executive Review Board and the GMs also have an explicit purpose to identify efforts which are being duplicated across product lines. When such duplication is identified, the GMs and the Review Board must resolve the duplication. In complex cases, the resolution will require the development a corporate strategy; the team to create the strategy would include participants from each interested product family.

Often, the seeming duplication of effort across product lines may be appropriate, due to real differences in needs and goals. At other times, it could be appropriate to cancel one of the efforts, levying upon the surviving project the requirement to meet the needs of the other product families: this solution is really viable only when the requirements for the product families are very similar. Finally, a combined team may be brought together to build a solution viable for all the product families. When R&D is required, such a combined team could as a default be placed in the Advanced Technology organization for the duration of the development effort, though other reporting structures are possible. There would be a good incentive on the GMs to use such a shared solution, since the development costs would not come out of their budgets.

Weekly Meeting of Al's Staff

There will be a weekly meeting of Al's staff, which includes the GMs among others, to work on conflicts, discuss processes, and identify strategic issues. Each week one GM will give a more complete review of activities and changes in his/her organization.

Tact as a Component of Management

Surprising as this may be to some people, concepts of tact were invented to increase the clarity of communication: by using tact, one can avoid arousing defensive emotions which inhibit successful understanding and agreement.

I would like to present two examples of communication between a product line and a service organization, since this is where communication is most at risk. And, I would like to look at both tactful speaking, and tactful listening--there is art to tact, at both ends of the communication.

Example 1:

The GM or the PM runs into the service organization and says, ``I must do X,'' where X is a significant change from the plan as of the day before.

Often the truth is a bit more subtle. A statement that is both more truthful and more tactful at the same time is, ``We have a set of requirements which, if we do X, will be fulfilled.'' It is probably worth a thousand misunderstandings for the GM to take two seconds to consider whether the second phrasing is more effective.

Communication is a two-way street: if the GM uses the first phrasing (perhaps because he/she has been working too hard and is not quite up to par), it will often be to the advantage of the team for the person in the service center to ask about, or perhaps even assume, the second phrasing.

Example 2:
The FM of the service center runs into the product line offices and says, ``You can't do Y,'' where Y is the thing the GM or PM most desperately wants to do. Often a more correct and more tactful statement would be along the lines of, ``Here are some issues with doing Y. I am interested in working out the issues with you.'' It is worth a few seconds for the FM to choose a clear and correct, but perhaps ever so slightly tactful, phrasing.

Once again, the listening GM has the latitude to understand a poorly phrased comment by a harassed FM in a way that does not need a strong emotive reply. The GMs really will have the authority to do what they really need to do; assertions that they can't do Y will not succeed as vetos; they need not fear someone will prevent them from succeeding. They can afford to respond with politeness and tact, since they won't need baseball bats to be effective.

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Editor: John Walker