Bob Herbold, who was Microsoft's chief operating officer during the company's megagrowth in the late '90s, has written a new book called The Fiefdom Syndrome, and it offers extremely valuable advice from someone who earlier in his career served as CIO and then senior VP of advertising at Procter & Gamble.
We all occasionally meet exceptional people who seem to be able to master just about anything that comes their way: the astrophysicist who's also a triathlete and dazzling piano player; the surgeon who writes children's books and is the featured singer at her church; those extraordinary Olympic athletes we watched last week who compete with such unbridled power and ferocity and moments later praise their opponents with complete spontaneity and thank their parents, coaches, and teammates with profound sincerity and grace.
Well, I read a book last week by a person who seems to fit into that rarified class, and I would urge all of you interested in improving your career, your group, your division, or your company to immerse yourself in this book. Due for release next month, the book is called The Fiefdom Syndrome, and it describes the traps lying in wait for individuals or organizations that allow complacency, risk aversion, and insularity to obscure corporate goals and customer-centric thinking. On top of describing those dangers, the book also does its readers the great service of relating in considerable detail how to destroy those insidious fiefdoms and build organizations focused on innovation, growth, and financial success.
The multitalented individual who wrote this highly useful book is Bob Herbold, who served as the chief operating officer of Microsoft from 1994 until 2001, which were years of enormous growth and change at the company: In the 6-1/2 years he was there, revenue increased 400% and profits 700%. Over that time, Herbold was responsible for finance, manufacturing and distribution, information systems, human resources, corporate marketing, market research, and public relations, so he had plenty of opportunities to witness firsthand how overly cautious and internally directed thinking could have hamstrung the company.
But that's where Herbold's singular experiences and insights proved to be so valuable: Before joining Microsoft, he was with Procter & Gamble for 26 years, handling a range of assignments from brand manager to advertising manager to CIO to--and get this title, particularly at one of the world's foremost consumer packaged-goods companies--senior VP of advertising and information services. One anecdote from Herbold's P&G days powerfully underscores the link between these seemingly disparate disciplines, and it occurred in 1987 when Herbold was CIO. Wal-Mart founder Sam Walton had invited P&G's executive team to come to Wal-Mart headquarters in Bentonville, Ark., and share their insights on "total quality" with Walton and his colleagues.
Herbold recalls that the P&G team, naturally quite proud to have received such an invitation, jumped at the opportunity and quickly put together a massive presentation that would serve as an eight-hour training program. He further recalls that Walton was more than a little jolted at the thought of an eight-hour training session: "Sam impatiently fidgeted in his chair as the trainer painstakingly droned through the material." After the first hour, Walton tried to get the P&G team to jump ahead to the conclusion, but they convinced him to stick with their program; after another hour of overhead slides, though, he had had enough: "He took the felt-tip pen and started drawing boxes on the flip chart that represented P&G computers, Wal-Mart computers, Wal-Mart distribution centers, P&G warehouses, and Wal-Mart stores. He then proclaimed, 'Why can't we just have your computers and our computers talk every night and place the order for P&G products to be shipped to Wal-Mart distribution centers automatically?'" Waving off the P&G requests that everyone sit down so the presentation could continue, Walton turned up the intensity, according to Herbold, and explained his frustration with having to deal with seven operating divisions with separate products and separate business processes, which required Wal-Mart to have separate buyers for each P&G salesperson, along with separate business processes, including invoices and purchase orders and merchandising and return policies and so on. And therein lies the critical point of Herbold's book: "Sam was asking that we break up the P&G sales fiefdoms and that he break up the Wal-Mart buyer fiefdoms that had developed to meet with the P&G fiefdoms."
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Sure, this is a classic supply-chain issue--Sam Walton drawing boxes on a flip chart showing warehouses, customers, distribution centers, and computers. But at another level, it's more about people and business processes, and the corrosive effects of insular thinking. Does any of this sound familiar? Can any of us think about our organizations and recognize the sclerotic characteristics of a group or an individual that resists change, fights to preserve the status quo, always has an excuse, and has built up an isolated workgroup deemed above and beyond the rules that exist for everyone else? If so, Herbold warns early in the book, get out the bulldozer: "The behaviors that characterize the fiefdom syndrome lead to a culture where ego and bureaucracy consistently trump common sense and innovation. They lead to turf wars. And they are almost always destructive."
To readers who are uncomfortable with frank self-analysis, the book can be more than a little discomforting: "Human nature is such that we are always trying to convince ourselves that we are more important than the rest of the group, company, or world believes we are." Or a related point: "The problem begins when individuals, groups, or divisions--out of fear--seek to make themselves vital to their organizations and unconsciously or sometimes deliberately try to protect their turf or reshape their environment to gain as much control as possible over what goes on."
But to readers who are more open-minded, the book will offer extraordinary insights into not just the problems, but also some specific ways to combat these insidious clusters and behaviors. And while "insidious" is a deeply negative term, it is nevertheless quite appropriate, according to Herbold's analysis of the destructive effects of fiefdoms, which he says (1) lead to inefficiency and ineffectiveness, which cut market share and profit; (2) stifle creativity and innovation; (3) lead to staleness and insularity; and (4) cripple execution, which leads to mediocrity.
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