It was 1992, and I had just been hired by a mutual life insurer, allowing me to escape the clutches of AIG. I settled into my new work and felt a lot more healthy and grateful. Within the first month, the best boss I ever had wandered into my office and said, “Sorry that I didn’t tell you before now, but we divided the entire division up into four cross-functional teams to analyze the problems of our division. Senior executives are excluded. You, a junior executive are included, but we ask that you don’t enforce your authority on your group.”
The division had 3 senior executives, 4 junior executives (1 inactive due to a sickness of which he eventually died), and 30 rank-and-file. That were four task forces, and so my group had 8 members, including my friend Roy, who was invaluable to the division — a kind of “Radar O’Reilly.” Medium rank, but a lot of implied authority. He had received a similar charge from the boss not to impose his authority.
Our team gathered together, and we learned that we were to analyze and improve the marketing of our division, which was a big task. I had my ideas, and Roy had his experience, but we had been told to be quiet. Let the rank and file show their competence.
We held the meeting and the group shared their ideas, summarized them, and then asked who would present them to the division next week. One guy who was young and inexperienced raised his hand. No one else did. He was chosen. The next week, he gave our presentation, and it was an embarrassment. We came in last of the four groups. (One year later, the guy was collecting tolls on the Pennsylvania Turnpike.)
I hate losing. I particularly hate losing when it was avoidable. So while the other three cross-functional teams went into hibernation, I got to work. (My boss said, “See, we knew the cross-functional teams wouldn’t amount to anything, we just wanted to prove it.”) Shrewd judge of human nature, bad judge of me this time.
When the group got together, I said, “What does the field think about our products and services?” I got the intelligent equivalent of a mumble. I suggested, “Let’s survey the field and tell them what we think are issues, and ask them what they think are issues.” Agreement, nods, and we are on our way after a short meeting. (Free-form surveys are a great way to start.)
Two weeks later, we met again — the field has responded, and more than we expected. They are frustrated. They want new funds and help in selling those funds to pension clients. By the time we are done with the meeting, we have 24 possible action items — too many to act on. I suggest, “Let’s do survey #2, asking them how important each of these ideas are, and how urgently they are needed.” (Structured surveys are a great way to ferret out deeper thoughts of players.)
Two weeks later, we meet again — we have a pretty good idea of the needs of the field, but we are not perfectly sure. What is most important, and what are representatives really asking for? So I said, “Let’s do survey #3, which is deceptively simple but deeply informative.” The survey would take the list of priorities, and say, “Pretend that we have made you the director of marketing. You have a $100,000 budget. In units of $1,000, allocate your marketing budget to the various priorities.” One member of the team said, “But should we give the same weight to the opinion of little producers versus big producers? If not, how do we track that?” The room was in favor of tracking, so I said, “Random typos on the surveys we hand out. We keep the list of random typos, and so we know who is who — worked on catching cheaters back when I was a TA.” The collective reaction of the room was “Cool, let’s do it,” and so we did. (Note: good surveys force respondents to prioritize within a constraint, but few do such rigorous surveys.)
There were representatives that chose one option, those that chose a few, and those that allocated something to every remotely deserving idea on the sheet, but when we were done, and weighted the ideas by representative, it was clear — there was one main need, four smaller needs, and everything else was negligible. So I asked the room, “Okay, by now you know the other three cross-functional teams are dead, but we got to the end of the process. Who should present this to the marketing department?” They pointed at me and Roy. Great. Actuaries telling marketers what to do. It should always be so sweet.
One week later, after Roy and I turned it into a presentation, we arranged to show it to the senior executives. At the end of the presentation, the Chief Marketing Officer said, “That makes so much sense, that’s how we should go.” My boss, and his boss (who was the boss of the CMO) agreed. Woo-hoo!
We went back to the team, and told them that we had won. A job well-done. We congratulated each other.
But what was the result?
The marketing department followed our advice, and sales improved dramatically, profits improved more dramatically — the division as a whole did well and became the star of the company. Low required investment, high returns, and high growth.
What did the cross-functional team get? The satisfaction of a job well done.
What did my boss get? He left for a much better job elsewhere, after he got his CFA Charter.
What did the boss’s boss get? A comfortable retirement.
What did I get? After my boss left, I was assigned to clean up another division, which I did in 18 months, before I left to join the investment department of another insurer.
What did the rank-and-file get? The company was merged into another mutual insurer, and most kept their jobs, but the work we did was made obsolete by the merger.
The merger might not have happened without our unrewarded efforts, because it increased profits so much. Yes, there may have been some small bonuses. As my boss said to me, “Your team surprised us. You were the least promising, but the most determined to succeed. How did you do it?” Roy and I were determined not to tip our hands, so we just said that it was dogged persistence, which was the truth, but not the whole truth.
But what I learned from the experience was different. I am not a natural leader, and neither was Roy. I learned that someone had to direct and encourage the observations of others, and get real data, in order to make effective changes. Leadership is not always delegation, but co-ordination with foresight. I did not impose my rank in the division to make it all work, but enabled their insights through structure that they themselves could not impose.
So did I disobey my boss’s charge to not lead the group? Formally, no. Practically yes, with Roy grinning, and with the gratitude of the senior management team at the end.
My firm view is that middle management is the most critical aspect of how a company works. Motivate them well, and you have a good company. So it was in our division, aside from the experiment. But that experiment accidentally propelled the division to great success, not that it will ever be remembered.