The Idea in Brief
Your company has a compelling product, a clear strategy, and talented management. Yet your unit leaders can’t seem to execute: They don’t collaborate; your products go to market late; excessive costs erode profit margins.
Why the struggle? You’ve likely made managers accountable for delivering certain results—without giving them sufficient resources for the job. How to correct this misalignment? Reconfigure four dimensions of each manager’s job:
- Control: resources over which the manager has decision rights
- Accountability: measures used to evaluate his performance
- Influence: extent of the network of people with whom he must interact to do his job
- Support: help he can expect from people in other units
When you calibrate these dimensions in ways that match resources to responsibilities and support your strategy, managers execute successfully.
For example, to deliver low prices, Wal-Mart standardizes store operations. Store managers have limited control over hours of operation, merchandising displays, and pricing. By contrast, managers at corporate headquarters—accountable for implementing best practices and consolidating operations to capture economies of scale—control purchasing, merchandising, distribution, and even store lighting and temperature. By correctly designing each key job, Wal-Mart consistently delivers on its low-price promise.
The Idea in Practice
Designing Jobs
Envision each job dimension as a horizontal sliding button you can move along a “span” ranging from “narrow” to “wide.” For instance:
- Control: Set span of control based on your company’s strategy for delivering value to customers.
Example:
Food company Nestlé reformulates products to satisfy regional tastes. Thus regional business managers have a wide span of control over the many resources they need to customize products. Head-office managers have a narrow span of control covering only logistics, global contracts, and accounting.
- Accountability: Set span of accountability based on behaviors you want to see. For example, to ensure compliance with detailed directives, hold a manager to narrow measures, such as head count or line-item budget expenses. To encourage creative thinking, hold him to wide measures, such as customer satisfaction and market share.
- Influence: Set span of influence based on a job’s interdependence (how much the manager must cross boundaries and persuade others to help him). The more interdependence, the wider the span. To widen span of influence, place a manager on a cross-functional team, require him to report to two bosses, or assign him a stretch goal beyond his span of control.
- Support: Set span of support based on how much commitment from others a manager needs to implement strategy. Jobs whose individual contributions can be easily calculated (think traders in financial institutions) have narrow spans of support. Jobs where cross-functional collaboration is vital to strategy implementation (e.g., in exclusive hotel chains where staff must move beyond their job descriptions to help others satisfy customers) require a wide span.
Matching Resources to Responsibilities
By “tuning” all four buttons correctly, you ensure that a manager gets the resources he needs to fulfill his responsibilities. Example:
A software company’s marketing and sales manager has a wide span of accountability: He’s responsible for revenue growth, profit, and customer satisfaction. But he has a narrow span of control: He depends on sales, alliances, technical support, and communications—none of which reports to him. To get the job done, he needs at least a moderate span of influence: He must cross some boundaries and persuade people in other units to help him. To ensure he gets help, his job has a wide span of support: His company defines customer satisfaction as a shared priority and encourages collaboration by including an equity component in managers’ compensation.
You have a compelling product, an exciting vision, and a clear strategy for your new business. You’ve hired good people and forged relationships with critical suppliers and distributors. You’ve launched a marketing campaign targeting high-value customers. All that remains is to build an organization that can deliver on the promise.
