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leader you must resist the world’s drift toward complexity by
simplifying your organization’s structure, systems for measuring
progress, and rules for decision-making. You must pare away
the distractions and focus on the relatively few principles
and practices that make a vital difference in |
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creating superior value. Loyalty to a clear and
simple set of principles is the basis for flexibility and speed.
Keep score
If you want your partners to act according to simple rules, you
must help them track their progress with simple scorekeeping systems
that can be trusted to remain stable over time. Keeping score is
one of a leader’s most powerful tools for clarifying the rules and
focusing the energies of his or her people. Therefore, loyalty leaders
try not to change company rules because this creates confusion and
complexity.
Outsource effectively
One of the greatest opportunities to simplify in the interests of
organizational speed and flexibility is to outsource all functions
for which you cannot provide uniquely outstanding customer value.
The advent of the Internet has opened up even more opportunities
to outsource effectively.
Utilize small teams
Loyalty comes naturally within a small team. Thus many loyalty leaders
utilize small teams as the molecular structure of their organizational
design. In many cases they have the smallest headquarter operations
in their industry. When you build an organization of decentralized,
locally managed teams, and when you outsource all non-strategic
functions to best-in-class partners, there is very little need for
a large headquarters organization.
The axiom of loyalty leaders is to “keep it simple” because they
know that loyalty depends on simplicity and that simplicity does
not come naturally in most human organizations. So they constantly
reaffirm the company’s simple values and operating principles. They
obliterate hierarchy. They break teams into small units with local
leadership and direct accountability. They initiate simple, breathtaking
challenges that concentrate minds, focus energy, and inspire their
people to achieve more than they ever dreamed possible. This is
your simple challenge.
Examples of
Bain's work
Strategy
is the science and art used by leaders to acquire resources and apply
them to solving a problem. In business, strategy is often misdefined
as part of the array of specific tactical decisions made by a firm,
such as setting prices or choosing suppliers.
Client
Success: Spiraling costs and organizational mayhem. MediaMiracle
had expanded rapidly, and its creative department was burning through
resources at an unsustainable rate.
Client
Success: A dated corporate center gets a lean, new look. A building
supply manufacturer needed to update and rationalize the role of its
corporate center.
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