1. Many designers, narrow designs - Siloed management system designs come back to bite us, increasing organizational drag.
2. Layering over, not uninstalling - The importance of understanding what's already there and uninstalling old behaviors (and culture) in favor of consciously-designed distinctive choices to support our Where to Play and How to Win choices is paramount.
Excellent article on the critical relationship between management systems and strategy. I particularly appreciate your point about management systems growing in layers without thorough analysis or systematic redesign of the whole system.
I'd add that in this AI-accelerated learning age, the challenge extends beyond developing decision protocols for humans - we must also design frameworks for synergistic human-AI decision-making.
I agree that CEOs should act as chief architects of management systems and culture, embodying integrity and setting the organizational tone. However, this isn't a solo endeavor - it requires partnership with the entire executive team. While strong CEO leadership is essential, true excellence emerges when the C-suite operates as a unified force, aligned on values, direction, and collaboration.
One of my best lessons about Management Systems is that they must be dynamic. It came from Malcolm Coster who went on to lead Unisys but was at the time running Consulting for Coopers & Lybrand UK. The firm was merging in the UK with Deloitte, Haskins and Sells and I was responsible for developing the monthly reporting of the direct reports to the Managing Partner of the newly merged firm. The leaders of the other divisions (Audit, Tax, Insolvency, Corporate Finance) proposed conventional reporting that would be comparable between divisions and consistent from month to month. Malcolm had other ideas. One of which was that his monthly report to his boss was going to be about what he wanted to discuss that month. He gave examples: when the business was booming he wanted to talk about how the Managing Partner could help him to increase recruitment, and ease staff transfers from other Division and from overseas offices, and the value of premium pricing even for core clients; in more regular times he wanted to discuss with the Managing Partner the trade-offs between investing in clients and in services, strengthening relationships with other Divisions and third-parties, and short-term profitability; in weak times the discussion would be about stopping recruitment, transferring staff overseas, organising secondments to clients, and cutting fees to win work; in dire times it was about cutting staff and preserving cash. It was a good lesson, I have applied many times.
I tend to think that exceptions should be decided as close to where the problem happens as possible since only there people will know the details and can make the judgement call but will they feel comfortable "over-ruling" the chief system designer (especially if it's the CEO)? Is it even a good thing they could ? On the other hand the CEO and the chief system designers below can't imagine all the exceptions and allow them upfront when they design the EMS.
So what's the solution? Empower the front-line like with Four Seasons and escalape otherwise?
These two points can't be overemphasized:
1. Many designers, narrow designs - Siloed management system designs come back to bite us, increasing organizational drag.
2. Layering over, not uninstalling - The importance of understanding what's already there and uninstalling old behaviors (and culture) in favor of consciously-designed distinctive choices to support our Where to Play and How to Win choices is paramount.
Excellent article on the critical relationship between management systems and strategy. I particularly appreciate your point about management systems growing in layers without thorough analysis or systematic redesign of the whole system.
I'd add that in this AI-accelerated learning age, the challenge extends beyond developing decision protocols for humans - we must also design frameworks for synergistic human-AI decision-making.
I agree that CEOs should act as chief architects of management systems and culture, embodying integrity and setting the organizational tone. However, this isn't a solo endeavor - it requires partnership with the entire executive team. While strong CEO leadership is essential, true excellence emerges when the C-suite operates as a unified force, aligned on values, direction, and collaboration.
One of my best lessons about Management Systems is that they must be dynamic. It came from Malcolm Coster who went on to lead Unisys but was at the time running Consulting for Coopers & Lybrand UK. The firm was merging in the UK with Deloitte, Haskins and Sells and I was responsible for developing the monthly reporting of the direct reports to the Managing Partner of the newly merged firm. The leaders of the other divisions (Audit, Tax, Insolvency, Corporate Finance) proposed conventional reporting that would be comparable between divisions and consistent from month to month. Malcolm had other ideas. One of which was that his monthly report to his boss was going to be about what he wanted to discuss that month. He gave examples: when the business was booming he wanted to talk about how the Managing Partner could help him to increase recruitment, and ease staff transfers from other Division and from overseas offices, and the value of premium pricing even for core clients; in more regular times he wanted to discuss with the Managing Partner the trade-offs between investing in clients and in services, strengthening relationships with other Divisions and third-parties, and short-term profitability; in weak times the discussion would be about stopping recruitment, transferring staff overseas, organising secondments to clients, and cutting fees to win work; in dire times it was about cutting staff and preserving cash. It was a good lesson, I have applied many times.
I just happen to have re-read your post "Exceptions & Rules" (here https://rogermartin.medium.com/exceptions-rules-9d2a20ec89ba) and I can't help bu connect both posts.
I tend to think that exceptions should be decided as close to where the problem happens as possible since only there people will know the details and can make the judgement call but will they feel comfortable "over-ruling" the chief system designer (especially if it's the CEO)? Is it even a good thing they could ? On the other hand the CEO and the chief system designers below can't imagine all the exceptions and allow them upfront when they design the EMS.
So what's the solution? Empower the front-line like with Four Seasons and escalape otherwise?
Great article that has so many gems, it deserves a re-read.
Likening management systems to the nervous system, gives them a dynamic & responsive sense.
The chief system designer is my favorite new role, and no one other than the head of the company should/could have overall responsibility for it.