Author: Ron Ashkenas

Is the role of the manager to make decisions, or to make sure that decisions get made? The answer, of course, is both — but many managers focus so much on the first role that they neglect the second. The reality, however, is that decision-making often is not a solo activity, but rather an orchestrated process by which the manager engages other people in reaching a conclusion. Doing this effectively not only improves the quality of the decision, but also ensures that everyone is more committed to its implementation.

There are many ways to facilitate this kind of engaged decision-making, but here are two examples:

Several years ago a new senior leader was brought in to lead a large financial services business that was in need of a turnaround. Making this happen required a series of weekly decisions and tradeoffs about deals, marketing alternatives, internal investments, and human capital that affected most of the senior management team. While it would have been easier and faster to simply weigh the pros and cons of each issue and then give directions, the senior leader realized that her managers understood the implications better than she did, and that if they didn’t fully support the decisions, the execution might be compromised. So everyone had to be engaged. The problem was that the managers all approached the problems differently and had trouble reaching consensus — so they kept pushing the decisions back to her instead of hashing them out amongst themselves. To shift this pattern, the senior leader started holding her weekly team meetings on Friday afternoons, telling the group that she was prepared to stay as long as necessary until they reached agreements. The first few meetings stretched into the night, but eventually the team learned how to make decisions together — and how to get home for the weekend.

In another example, the division president of a manufacturing firm took an alternative approach to the same dilemma. Because the business was highly functionalized, senior managers realized that decisions in one area affected the others, so they escalated almost everything up to the president. While this made sense on paper, in practice the president became a bottleneck in the decision process, and everyone became frustrated with how long it took to get things done. To break this logjam, the president began to push back on each decision that was brought to him by asking a series of boilerplate questions such as, “How will this affect our customers?”; “Who else needs to be involved in this decision?”; and “What’s stopping you from working with your colleagues to figure out the right thing to do?” Eventually, through this repeated process of Socratic dialogue, the team members began to work through the issues with each other first, and brought far fewer decisions up to the president.

Every manager needs to make sure that decisions are made and implemented, whether it’s for an entire company or a small team. And while it may seem easier to just make the decisions yourself, in many cases this won’t lead to the best outcome — nor will it increase your team’s capability to make future decisions. The alternative, however, is not to shy away from decisions, but rather to create an orchestrated process by which the right people are engaged, including yourself.

This post is co-authored with Lisa Bodell.

Over the past several years we have heard hundreds of managers talk about the negative impact of complexity on both productivity and workplace morale. This message has been reinforced by the findings of major CEO surveys conducted by IBM and KPMG [PDF], both of which identified complexity as a key business challenge.

Agreeing on complexity as a problem is one thing, but doing something about it is quite another — particularly for managers who are already over-worked, stressed, and can barely keep up with their current workload. In fact, the Catch-22 of complexity is that most managers don’t feel that they have the time to focus on it: Having the problem precludes the ability to solve it.

With this dilemma in mind, we think it’s important for managers to have a strategic framework that they can use to address complexity in their own areas, at their own pace, in their own ways. So to that end, we would like to offer a “simple” seven-step simplification strategy. While we present these sequentially, they can be implemented in any order, depending on where you might be able to make the greatest difference most quickly. Over time however, it’s important to do all seven so that simplicity becomes a core capability of your organization and not just a one-time project.

1. Clear the underbrush. An easy starting point for simplification is to get rid of stupid rules and low-value activities, time-wasters that exist in abundance in most organizations. Look, for example, at how many people need to review and sign off on expense reports or small purchases; or how many times slide decks need to be reviewed before they are presented. If you can shed a few simple tasks, you will create bandwidth to focus on more substantial simplification opportunities.
2. Take an outside-in perspective. Simplification should be driven by the need to add value to your customers, either internal or external. So a key step in the process is to proactively clarify what your customers (internal or external) really want and what you can do to make them more successful. One manager, for example, took her team to visit a customer plant so that people could see how their product was actually used, which gave them ideas about how to improve it.
3. Prioritize, prioritize, prioritize. One of the keys to simplification is to figure out what’s really important (and what’s not), and continually reassess the priority list as new things are added.
4. Take the shortest path from here to there. Once it’s clear that you are working on the right things, root out the extra steps in core processes. Where are the extraneous loops, redundancies, and opportunities to make our processes as lean as possible?
5. Stop being so nice. One of the patterns that causes or exacerbates complexity is the tendency to not speak up about poor practices. This is particularly true when people hesitate to challenge more senior people who unintentionally cause complexity through poor meeting management, unclear assignments, unnecessary emails, over-analysis, or other bad managerial habits. To counter this trend, use constructive feedback and conflict to keep your colleagues (and yourself) honest about personal behaviors that might cause complexity.
6. Reduce levels and increase spans. Another source of complexity is the structural tendency to add layers of management, which often leads to managers supervising just one or two people. When that happens, managers feel compelled to add value by questioning everything that their subordinates are doing, which adds work and reduces morale. To reduce this kind of complexity and stay away from micromanaging, take a periodic look at the organization’s structure and find ways to reduce levels and management and increase spans of control.
7. Don’t let the weeds grow back. Finally, remember that complexity is like a weed in the garden that can always creep back in. Whenever you feel like you’ve got it solved, do steps 1 through 6 over again.

In today’s global, increasingly digital organizations, complexity is a growing drag on productivity and workplace satisfaction. Managers need to develop simplification as a core leadership capability and a critical component of the business strategy. Hopefully these steps will help you get started.

This post’s coauthor, Lisa Bodell, is the founder and CEO of FutureThink and the author of Kill the Company.

With graduation season upon us, it’s important to remember that as a manager you must often be a teacher too. A major part of your role is instruction — which means that you need to pay attention to the massive disruption going on in higher education and what it means for company learning.

The most visible part of educational disruption is the proliferation of online learning through MOOCs, or massive, open, online courses. These programs, sponsored by elite universities such as Harvard, Stanford, Berkeley, and Wesleyan, have enrolled thousands of students around the world in high-level courses developed by top-notch faculty. And although the dropout rate is high, the business model is uncertain, and learning outcomes are not yet clear, these MOOC’s are rapidly evolving new technologies that will certainly change the higher education landscape, and dramatically increase access to learning.

The other force that is disrupting higher education is the expectations of students. One of my clients recently took a trip with her sixteen year old son to visit colleges. While my client was impressed by the schools with extensive libraries and physical facilities, her son was focused on the extent to which the institutions were enabled with wireless capability, video streaming, readily available collaboration tools, and more. This suggests that higher education is also being disrupted by the demands of digital natives. Having grown up in an online world, they won’t be satisfied with traditional lecture-oriented and paper-based education, especially as K-12 schools become more digital as well.

For universities, the changing landscape will mean a fundamental rethinking of the educational experience. For example, the classroom probably will be used more to discuss and internalize content that has already been provided digitally, a concept known as flipping; students and faculty will communicate not just in person, but also through continuously available digital channels; and teachers will have access to more data about student performance and learning, giving them the ability to track progress and participation throughout both a course and a curriculum.

These same trends are likely to affect corporations and the way knowledge is transferred to employees, customers, and other partners. For example, instead of starting new hires with a traditional orientation workshop, companies might require them to complete an online preparatory course and pass a test before even meeting their new boss. The same process could be used when someone moves to a new job or a new division within a company. Digital learning tools also could be used more extensively with customers, replacing instruction manuals and help desks; while remote diagnostics and smart products, with embedded instructions (what GE calls the Industrial Internet) will replace service calls. Companies are experimenting with all of these approaches and many more — so while we don’t know the exact shape of the future, we do know it will be different.

As a result, if you’re in a managerial position today, it’s probably time to get ready. Here are two things you can do:

First, if you’re not completely comfortable with the digital world, get yourself a digital mentor — someone under the age of 25 who can teach you the language and help you understand what’s possible. GE did this for all its senior people a number of years ago when the internet was just emerging, and it accelerated their learning curves tremendously.

Second, take an online course, either in your own company’s virtual university if you have one, or through one of the MOOC providers such as Coursera, EdX, or Udacity. There are an astounding array of topics already available — from “Introduction to Artificial Intelligence” to “Aboriginal World Views” to “Songwriting” — so pick something of interest and go through the process at your own pace — both to get exposure to a new subject and to get familiar with a new way of learning.

Disruptive transformation is always painful and challenging. But when you know it’s coming, it’s usually better to be a few steps ahead than a few gigabytes behind.

Although it doesn’t show up explicitly in any personality test, some people seem to be more prone to creating complexity than others. Instead of cutting to the heart of an issue, they tangle it further; rather than narrowing down projects, they allow the scope to keep expanding; and instead of making decisions, they defer until there is more data and better analysis.

These behaviors are characteristics of people that I call “complexifiers.” Like Pig-Pen, the Peanuts character who carries around his own cloud of dust, complexifiers seem to leave complexity in their wake, making it more difficult for subordinates, colleagues, customers, and even family members to get things done. Here’s a brief (disguised) example:

Due to changing market conditions, price compression, and the slow introduction of new products, a billion-dollar consumer products unit was starting to see erosion in market share and profitability. To turn things around, senior management brought in a new general manager, an industry expert named Phillip who had previously run the consumer products practice for a large consulting firm.

Phillip turned out to be a classic complexifier. At every meeting with his team he asked for additional data and berated his people for not knowing the answers to every detailed question he could think of. And although he seemed to be dissatisfied with some members of his team, he kept telling HR that he wanted more time to evaluate them, so no changes were made. Eventually he reorganized the unit into a functional/geographic matrix that he explained through an intricate series of slides that most of his people didn’t fully understand. He also created additional metrics that required people to spend more time on reporting. The net result of all this work was that people in the unit were busier and under more pressure than ever before — but market share and profitability continued to decline.

Obviously Phillip represents an extreme example of a complexifier with his insatiable hunger for additional data and inability to make fast decisions. But all of us fall into this category from time to time. If this kind of pattern seems all too familiar to you, and you want to learn how to think more like a “simplifier,” here are four questions that you can ask yourself and/or discuss with your team:

How much data is enough? Complexifiers always want more information, with the hope (or fantasy) that the next bit or byte will answer all questions and hold the key to success. Simplifiers understand that there will never be complete data and that it’s necessary to create hypotheses and action plans based on an intuitive sense of how much is enough.

Have we agreed on the key priorities? Complexifiers like to hedge their bets and not commit to a definitive course of action, particularly since some new information might surface that will change the plan. So rather than get locked in to a few things, complexifiers ask their people to keep multiple balls in the air. Simplifiers on the other hand narrow the focus to a few key things and give their people permission to stop doing things that don’t make the cut.

Do we have an efficient process for rapid review and course correction? Complexifiers like to spend their time in long meetings, sorting through reports and analyses, and trying to manage lots of disparate and unfocused work streams. Simplifiers have focused reviews of the key priorities and hold people accountable for their commitments and results. They also learn as they go, continually testing their hypotheses about what should be done against the reality of what’s working and what is not. This allows them to shift course whenever it seems appropriate or necessary.

Can we explain our plan to others? Complexifiers have a hard time communicating their plans to colleagues and customers, relying on intricate charts and diagrams and convoluted slides rather than simple, straightforward messages. One of the key characteristics of a simplifier is the ability to tell stories that convey the situation, the goals, and the plans — in a way that helps people understand what they need to do and how their work fits with everything else.

Some people are naturals at simplification. But for the rest of us, asking these questions can help keep us honest about whether we are slicing through complexity, or creating it.

As a recognized discipline, change management has been in existence for over half a century. Yet despite the huge investment that companies have made in tools, training, and thousands of books (over 83,000 on Amazon), most studies still show a 60-70% failure rate for organizational change projects — a statistic that has stayed constant from the 1970’s to the present.

Given this evidence, is it possible that everything we know about change management is wrong and that we need to go back to the drawing board? Should we abandon Kotter’s eight success factors, Blanchard’s moving cheese, and everything else we know about engagement, communication, small wins, building the business case, and all of the other elements of the change management framework?

While it might be plausible to conclude that we should rethink the basics, let me suggest an alternative explanation: The content of change management is reasonably correct, but the managerial capacity to implement it has been woefully underdeveloped. In fact, instead of strengthening managers’ ability to manage change, we’ve instead allowed managers to outsource change management to HR specialists and consultants instead of taking accountability themselves — an approach that often doesn’t work.

Here’s an example of this pattern: Over the course of several years, a major healthcare company introduced thousands of managers to a particular change management approach, while providing more intensive training in specific tools and techniques to six sigma and HR experts. As a result, managers became familiar with the concepts, but depended on the “experts” to actually put together the plans. Eventually, change management just became one more work-stream for every project, instead of a new way of thinking about how to get something accomplished.

Obviously, not every company lets its managers off the hook in this way. But if your organization (or your piece of it) struggles with effectively implementing change, you might want to ask yourself the following three questions:

1. Do you have a common framework, language, and set of tools for managing significant change? There are plenty to choose from, and many of them have the same set of ingredients, just explained and parsed differently. The key is to have a common set of definitions, approaches, and simple checklists that everyone is familiar with.
2. To what extent are your plans for change integrated into your overall project plans, and not put together separately or in parallel? The challenge is to make change management part and parcel of the business plan, and not an add-on that is managed independently.
3. Finally, who is accountable for effective change management in your organization: Managers or “experts” (whether from staff groups or outside the company)? Unless your managers are accountable for making sure that change happens systematically and rigorously — and certain behaviors are rewarded or punished accordingly — they won’t develop their skills.

Everyone agrees that change management is important. Making it happen effectively, however, needs to be a core competence of managers and not something that they can pass off to others.

You probably can think of something in your company that should change. We all can — but often look the other way. There are plenty of good reasons for inaction: It’s not my responsibility, I have lots of other things to do, someone might get angry at me for stepping on their turf. While we value the concepts of making active decisions and empowering ourselves to make a difference, they’re often ignored. In fact, most of the time we wait for someone else to empower us first.

But every once in a while, someone doesn’t wait. This kind of person doesn’t focus on the excuses and tries to change something anyway, no matter how long the odds. Understanding someone like that can give us clues (and maybe some inspiration) about what it really takes to be self-empowered.

In this case, the person I’m referring to is Dirk Beveridge, who has a small firm that creates sales strategies for wholesale distribution companies. In the United States, wholesale distribution is a $4.8 trillion industry that employs 5.6 million workers — but is mostly comprised of entrepreneurial, family-run businesses with fewer than 500 employees. Over the last few years, Dirk began to realize that the business model for wholesale distribution was dramatically changing as manufacturers increasingly sell direct to consumers, and large firms like Amazon and Grainger use their technology and scale to squeeze out the traditional middlemen. Yet most industry leaders were either in denial or didn’t know what to do. As one of his clients said to him, “A train wreck is coming at us.”

Obviously Dirk could have simply observed this phenomenon, commiserated with his clients, and continued to run the traditional work of his business. Instead, Dirk decided that it was time to bring new thinking to the wholesale distribution industry through a series of conferences and videos that he called “Unleash WD.” The idea, as he described it, was to catalyze industry leaders into action by giving them exposure to ideas outside of their traditional world.

After bouncing the concept off of several industry CEOs, but still unsure whether he could pull it off, last summer Dirk began to recruit speakers for what he called a Provocation Summit. Offering not much more than the chance to make a difference (and travel expenses) his line up eventually included Fast-Company Founder Bill Taylor; Saul Kaplan, who runs the Business Innovation Factory in Providence; Whitney Johnson, founding partner of Rose Park Advisors; Lara Lee, the Chief Innovation and Operating Officer of Continuum; and a dozen others (including me). The main criteria were that the speakers came from outside the industry, and would be able to tell stories (sort of like TED-talks) about how other companies went about innovation and reinvention.

Based on this roster of speakers (which he called “storytellers”), Dirk found a company to partially underwrite the conference and ended up with over 40 senior industry leaders in Chicago in November — not a great turnout, but what he calls a “good start.” And the participants agreed: “I might be an old dog, but your event has my tail wagging,” “I feel I can truly be a disruptive agent,” and “You have changed my mindset.”

Of course, this one event didn’t change the wholesale distribution industry, and it cost Dirk a fair amount of time and money. But the experience seems to have made him even more committed. He’s distributing videos of his “storytellers”, sending around whitepapers, and getting ready for a second and larger Provocation Summit (now called the Innovation Summit) later this year. As he says, “It’s the right thing to do.”

Most of us see opportunities that are “the right things to do,” but unlike Dirk don’t have the courage, energy, or time to do anything about them. But imagine what could be accomplished if that pattern was reversed and more of us empowered ourselves instead of waiting to be empowered? According to several CEOs who I’ve worked with, this is the most significant cultural and business challenge that they see in their organizations.

So perhaps it’s time to try a modest experiment: Identify one possible improvement in your organization. Pick something easy such as changing a meeting or streamlining a report; or find something more challenging, such as speeding up customer response time. Whatever the issue, make a commitment to do something about it in the next week. Join forces with other colleagues. Reconfigure your workload so that you can carve off some time. Identify all the reasons why you can’t do this little project, and then do it anyway. Then learn from your experience and do it again. Just remember: Nobody can empower you as much as you can empower yourself. In that way, everyone can be a Dirk Beveridge.

While most managers complain about being overloaded with responsibilities, very few are willing to give up any of them. It’s one of the great contradictions of organizational life: People are great at starting new things — projects, meetings, initiatives, task forces — but have a much harder time stopping the ones that already exist.

Take this example: The CEO of a large consumer products company was concerned that the organization was becoming too complex and unwieldy — which was adding to costs and slowing down decisions. After a long discussion with her senior team, everyone agreed to identify committees, projects, and studies that could be stopped across the firm. However, when the executive team reconvened the next month to review the ideas, everyone pointed out activities that other teams should stop instead of opportunities in their own domains. They then spent an hour justifying why everything that they were doing was critical and couldn’t be stopped.

There are several deep psychological reasons why stopping activities is so hard to do in organizations. First, while people complain about being too busy, they also take a certain amount of satisfaction and pride in being needed at all hours of the day and night. In other words, being busy is a status symbol. In fact a few years ago we asked senior managers in a research organization — all of whom were complaining about being too busy — to voluntarily give up one or two of their committee assignments. Nobody took the bait because being on numerous committees was a source of prestige.

Managers also hesitate to stop things because they don’t want to admit that they are doing low-value or unnecessary work. Particularly at a time of layoffs, high unemployment, and a focus on cost reduction, managers want to believe (and convince others) that what they are doing is absolutely critical and can’t possibly be stopped. So while it’s somewhat easier to identify unnecessary activities that others are doing, it’s risky to volunteer that my own activities aren’t adding value. After all, if I stop doing them, then what would I do?

The final reason that unnecessary tasks continue is that managers become emotionally attached to them. We see this often with “zombie projects,” activities that are seemingly killed or deprioritized but somehow keep going because managers just don’t want to let go. Once people have invested in creating projects, committees, or processes, they feel a sense of ownership. Getting rid of them is like killing their own offspring.

Given these powerful underlying dynamics, what can you do to stop excessive activities in your own organization? Here are a few guidelines to keep in mind:

Separate cost-reduction from work-reduction. Since people are naturally (and understandably) protective of their livelihoods and careers, it’s difficult to ask them to do things that will result in the loss of their own job. So if cost-reduction is a key driver, try your best to eliminate jobs first. Only then should you work with the “survivors” to eliminate the unnecessary work.

Make work elimination a group activity. While managers are hesitant to point out stoppage possibilities in their own areas, they often can see opportunities elsewhere. By bringing teams together across different business units and functions, you stand a better chance of surfacing activities that can be brought to a halt.

Insert a “sunset clause” in the charter of all new committees, teams, and projects. Instead of swimming against the tide in trying to stop ongoing endeavors, make the shut-down process a natural event in the life cycle of organizational activities. If people know from the start that there is a beginning and an end, then managers will start to expect that things will be turned off at a specific time and can plan accordingly.

All organizations need to periodically hit the “off” button on activities that add unnecessary costs and complexity. Doing so however requires that you deal with the psychological dynamics that make it easier to get things started than to get them stopped.

I was recently perplexed when I received a request to speak to a group of senior managers about reducing complexity — mostly because I had worked with their company fifteen years earlier on the same subject; and they had since developed a reputation for being good at simplification. Why did they want to revisit what was already a core competence?

Once I met with the senior management team, the answer became very clear: Whatever institutional knowledge about simplification that had once resided in the company was now lost. Over the years, despite a number of well-meaning efforts, the focus of senior managers had shifted, the original training had been forgotten, and many of the messages on the subject had become empty rhetoric. In fact, astoundingly I was one of the main repositories of institutional memory about how to master simplification — an external consultant who had not worked with the firm for a number of years!

Although this is an extreme example, it’s not unique. Organizations spend a lot of time and resources developing knowledge and capability. While some of it gets translated into procedures and policies, most of it resides in the heads, hands, and hearts of individual managers and functional experts. Over time, much of this institutional knowledge moves away as people take on new jobs, relocate, or retire. Knowledge also degrades when a new senior executive or CEO introduces a different agenda that doesn’t build on earlier knowledge, or contradicts what was done previously. And knowledge disappears even more rapidly when a firm reorganizes or merges with another and there is a subsequent reshuffling of the cast of characters.

Most large organizations today regularly experience these dynamics. The result is that the informal, people-based institutional knowledge that is so critical to organizational effectiveness seems to have a shorter and shorter shelf life. As one colleague commented after visiting a long-time client that had gone through three mergers and multiple CEOs: “It feels like ‘Invasion of the Body Snatchers.’ The names of the department are all the same, but the people act differently.”

So what can you do to overcome the rapidly accelerating loss of institutional knowledge?

First, build an explicit strategy for maintaining institutional memory, even in your own team. Don’t assume that it will happen by itself. On the contrary, if you don’t pay attention, the knowledge base of your team or business unit will potentially atrophy.

Second, as part of your strategy, identify the few key things that you want every member of your team to know or be able to do — and figure out how to turn this from an implicit assumption to an explicit expectation. You might for example, build the mastery of this core knowledge into the onboarding process for new team members, and have refresher sessions as part of your off sites or leadership meetings.

Finally, use technology to create a process by which your team continually captures and curates institutional knowledge — to make it a living and evolving body of useful information that is accessible to people as they come into the organization. Intel for example has an internal wiki (called Intelpedia), which gives employees a way of both capturing and accessing important terms, procedures, historical incidents, and more.

In this day and age of Alzheimer’s Disease and dementia, everyone knows that an individual’s memory is fragile. What we often don’t recognize is that organizational memory is much the same — and if we don’t actively preserve it, we put ourselves at risk.

What’s striking about Fast Company’s 2013 list of the world’s 50 most innovative companies is the relative absence of large, established firms. Instead the list is dominated by the big technology winners of the past 20 years that have built innovation into their DNA (Apple, Google, Amazon, Samsung, Microsoft), and a lot of smaller, newer start-ups. The main exceptions are Target, Coca Cola, Corning, Ford, and Nike (the company that topped the list).

It’s not surprising that younger entrepreneurial firms are considered more innovative. After all, they are born from a new idea, and survive by finding creative ways to make that idea commercially viable. Larger, well-rooted companies however have just as much motivation to be innovative — and, as Scott Anthony has argued, they have even more resources to invest in new ventures. So why doesn’t innovation thrive in mature organizations?

To get some perspective on this question, I recently talked with Steve Blank, a serial entrepreneur, co-author of The Start-Up Owner’s Manual, and father of the “lean start-up” movement. As someone who teaches entrepreneurship not only in universities but also to U.S. government agencies and private corporations, he has a unique perspective. And in that context, he cites three major reasons why established companies struggle to innovate.

First, he says, the focus of an established firm is to execute an existing business model — to make sure it operates efficiently and satisfies customers. In contrast, the main job of a start-up is to search for a workable business model, to find the right match between customer needs and what the company can profitably offer. In other words in a start-up, innovation is not just about implementing a creative idea, but rather the search for a way to turn some aspect of that idea into something that customers are willing to pay for.

Finding a viable business model is not a linear, analytical process that can be guided by a business plan. Instead it requires iterative experimentation, talking to large numbers of potential customers, trying new things, and continually making adjustments. As such, discovering a new business model is inherently risky, and is far more likely to fail than to succeed. Blank explains that this is why companies need a portfolio of new business start-ups rather than putting all of their eggs into a limited number of baskets. But with little tolerance for risk, established firms want their new ventures to produce revenue in a predictable way — which only increases the possibility of failure.

Finally, Blank notes that the people who are best suited to search for new business models and conduct iterative experiments usually are not the same managers who succeed at running existing business units. Instead, internal entrepreneurs are more likely to be rebels who chafe at standard ways of doing things, don’t like to follow the rules, continually question authority, and have a high tolerance for failure. Yet instead of appointing these people to create new ventures, big companies often select high-potential managers who meet their standard competencies and are good at execution (and are easier to manage).

The bottom line of Steve Blank’s comments is that the process of starting a new business — no matter how compelling the original idea — is fundamentally different from running an existing one. So if you want your company to grow organically, then you need to organize your efforts around these differences.

Watch for Steve Blank’s upcoming article in the April issue of the Harvard Business Review.

Are acquisitions part of your company’s growth plan? Odds are the answer is yes. In the first half of 2012, thousands of merger and acquisition deals were announced globally, worth more than $900 billion. And this was a slow year. Predictions are that 2013 will be even more active as companies that have stockpiled cash look to invest in new growth opportunities.

But acquisitions can be risky business. Studies show that as many as two out of three deals do not realize their originally stated goals. And of course some of these fail spectacularly and end up hurting more than helping. HP’s acquisition of Autonomy is a recent case in point in which a transaction that was supposed to be transformative ended up in a multi-billion dollar write-off and messy accusations of fraud.

Given the fact that acquisitions and mergers are critical pathways to growth, companies will continue to pursue them, no matter what the potential downsides. To reduce the risks however, there are two steps that managers can take to make sure their firms are ready for the challenges of integration before committing to an actual deal. So if you and your colleagues are contemplating an acquisition, here’s a possible game plan.

First, create a high-level picture of what you want a combined company ideally to look like one year after a successful integration — not just in terms of finances, but also in regard to operational practices, strategic initiatives, organizational structure, and culture. This thought-process will smoke out your assumptions about how much change you think the company needs. More importantly, it will give you a basis for dialogue with other managers about their expectations for change, which might be different than yours. In fact, one of the reasons that integrations falter is the lack of alignment among managers about what will actually happen.

In a certain integration at a healthcare services organization, for example, senior leaders were ambivalent about whether they wanted to allow the newly acquired company to continue its own care standards or adopt their more stringent policies. In the absence of a clear decision from above, product managers and caregivers all made their own choices, which led to quality and compliance problems. The real issue was the extent to which the management team was willing to devote time and resources for training, documentation, communication, and all the other aspects of a major change effort. Knowing this ahead of time would have made the leaders think twice about what they were getting into.

Once you have a picture of the combined company, the second step is to do what we might call “backward resource planning.” This means starting with the vision and then working backwards to see what will it take to achieve it — what resources will be needed (e.g. teams, leaders, investments), what oversight and governance might be required, what skills would be essential.

One of the fundamentally flawed assumptions that companies make about integrating acquisitions is that managerial and professional time is infinitely expandable. The reality is that the best people — the ones that need to be assigned to diligence and integration teams — already have full-time and important jobs. So when they are asked to also take on integration assignments, they end up making choices about what not to do. When that happens, all sorts of other things start falling through the cracks, which is why we often see, during integrations, a degradation of customer service, increases in cycle time, and other performance shortfalls.

Some executives deal with this problem by hiring armies of consultants to do the heavy lifting. What they don’t realize is that managers still need to work with these consultants, give them direction, share information, and make sure that the work is being done properly. More importantly, unless managers are deeply involved, they won’t own the eventual outcomes of the integration process. So there’s no getting around the resource issues. What you as a manager can do, however, is prepare. Go into the integration process with a clear sense of the tradeoffs: Given the resources needed, what else can be stopped or delayed? What priorities can be reset? What goals need to be deferred? What work can be eliminated? What managers can be freed up to contribute to the integration projects? And will the eventual outcome be worth the effort?

Combining all or parts of two companies will always be challenging and entail a certain amount of risk. But before chasing the shiny new deal, it’s important to take a hard look at what it will take to succeed, and what it will take to get ready.

For more advice from Ron Ashkenas and others on this topic, read The Merger Dividend and Integration Managers: Special Leaders for Special Times.

To work out differences and get things done, people in organizations need to work together. To foster this kind of collaboration, managers need to develop personal relationships — and some amount of trust — with potential partners. Without this foundation, negotiations often become adversarial; parties question each other’s motives and neither side truly listens to the other.

Sound familiar? The struggle to reach consensus in Washington over spending, taxes, debt limits, and other issues is a case in point on how the absence of relationships constrains compromise. Clearly the issues involved are divisive and emotional, but watching these leaders try to find a middle ground is painful and discouraging — largely because they have so little relationship capital to draw upon. According to recent news reports, Republican leaders routinely turn down invitations from President Obama to come to the White House for social events, whether they are state dinners or movie screenings. And President Obama, for his part, has indicated that he prefers to spend time with his family instead of schmoozing with members of Congress.

Nobody is suggesting that President Obama, Speaker Boehner, and Senate Minority Leader McConnell become close personal friends. They do, however, need to understand and appreciate each other’s points of view and be willing to look for middle ground. Getting to that point takes hard work. As one manager at the World Bank once said to me, “Building relationships requires a thousand cups of tea.”

A number of years ago, many of the big commercial banks and private corporations encouraged their officers to build relationships by providing special executive dining rooms (with gourmet meals). While there was a certain amount of elitism involved, the practice gave managers a chance to get to know each other and create an underlying support structure for doing business. Similarly companies also organized regular offsite team-building retreats, and social events for managers and their families.

Today companies tend to be more egalitarian, and more concerned about costs and perceived boondoggles, so that many of these relationship-building vehicles (some of which were excessive) no longer exist. However the need may be greater than ever, since managers often do not work in the same locations as their peers, spend more time traveling, and usually do not have the luxury of extra hours to just “get together” with colleagues. The result is that many managers simply do not have relationships with a wide network of people across the company (and outside) and therefore struggle to resolve conflicts. In fact I’ve been in a number of senior management conferences in the past few years in which top-50 managers are meeting each other for the first time.

The bottom-line is that whether you are the president of the United States or a mid-level manager, it’s worthwhile to be strategic and proactive about building relationships. To do so, here are two steps you can take:

First, identify the people in your company, or in adjacent organizations (e.g., customers, thought-leaders, partners) with whom you might need to collaborate at some point. In particular, focus on managers who are likely to hold divergent views or may see the world through a different lens.

Second, develop a tailored way to reach out to each person on the list — a few at a time — with the simple goal of getting to know each other. I know one manager, for example, who commits to setting up 10-minute calls with three people each week, just to “say hello.” Another manager makes sure that he contacts people on his list whenever he’s going to be traveling to their city or country. And still another uses social media to connect to some people and builds an email dialogue with others.

Most people understand that building relationships with potential business partners is a critical strategy for success. But it’s a strategy that often won’t happen by itself.