New leaders of organizations almost always face at least one significant hurdle – understanding the intricate web of roles, projects, and methods that interact to produce its results. This combination of skills, culture, assets and processes form the bedrock on which their decisions are built and outputs achieved. This analytic challenge is especially critical in troubled organizations, where the gap between promises and actuality can be glaring. A good historical example of this is Microsoft’s Windows group turnaround.
Microsoft’s Windows group turnaround was the work of Steven Sinofsky who tells the story in his book Hardcore software. Sinofsky spent more than 20 years at Microsoft, successively in charge of development for Office, then Windows. When he took charge of Windows in 2006, the project was in dire straits. The backlog was considerable, and delivery dates were regularly revised. He arrived just as the team was finishing Windows Vista, which would be considered a mediocre vintage, and he had to prepare the follow-up.
Sinofsky did a very simple thing: he created an Excel spreadsheet listing all the team members. Incredibly, no such list existed! And yet, the team was large: over 3,500 people. He then created a list of tasks. For each one, he indicated exactly what each person spend their time on. He didn’t start from what people said, but from what they did, with evidence to back it up. Simple in theory, very complicated in practice, this effort took several weeks. The verdict was clear: there was a huge difference between the image a team projected and what it actually did. In essence, the team and its managers literally didn’t know what they were doing. They lived in a parallel world. They’d created an imaginary double. The project was in disarray, but the feeling was that “we’re almost there”. Knowing at last what his team was really doing, Sinofsky was able to reallocate staff to focus on difficult, strategic tasks.
Sinofsky’s action can be compared with that of Steve Jobs when he returned to Apple in 1996, which I mentioned in a previous article. The situation was catastrophic and the company was on the verge of insolvency. The reality of Apple’s situation was well known, but not accepted by the company, which lived in denial. Jobs’ job was to remove this denial, bringing the company and its partners back to reality. The reality of Windows at Sinofsky’s arrival was unknown; it was less a question of denial than of ignorance, and it was to its establishment that Jobs set out first and foremost.
Key Performance Indicators
In organizations, reality is often measured by key performance indicators (KPIs). Criticism of these indicators is longstanding and well-founded, as they often serve as a substitute for knowledge of reality. They contribute to the creation of a double imaginary, a world of numbers that is seen as reality rather than a translation of it.
Sinofsky’s example offers a more nuanced view. There can be no management without objective data. The question is not whether to have indicators or not. They are necessary, but they must be intelligently defined. That is, they must be specific to the organization, not generic. They also have to be defined according to the problem that needs to be solved. Sinofsky leads a team that develops software, so he needs to know who is coding what for what purpose. He admits, “I had a top-down view of the organization, and I knew a lot of people, but I had to learn a lot in between. One of the lessons of his work is that there are far too many managers (a third of the team) and too many levels of hierarchy. The classic way to deal with an initial dysfunction was to add managers; that addition increased the dysfunction, which led to more managers, and so on. By the time Sinofsky arrived, the ratio of “doers” to “managers” had become very unfavorable. Another lesson from his study is the large number of cost centers (or budget units). 300 in all, while the office had only 30. An important finding, since he estimated that a budget unit costs the company about $100,000. Gradually, he built up a clear picture of the reality.
Knowing objective data is essential, but not everything boils down to quantitative indicators. Often the objective data that counts is not quantifiable, and what is quantifiable is not necessarily what counts. What’s more, many quantitative indicators are lagging: the effects of an action are often visible in the numbers long after the fact, making it difficult to establish causality. Gathering objective data must be guided by attention to the specifics of the organization and the situation, not by an obsession with quantitative indicators. It’s about highlighting the reality of the organization and what really matters within that reality. For Sinofsky, the reality was a misallocation of resources. Once that problem was solved, he could move on to another and redefine a new measurement system.
The journeys of leaders like Steven Sinofsky and Steve Jobs remind us that engaging with reality is the cornerstone of effective leadership. Sinofsky’s simple yet profound act of creating an Excel spreadsheet exposed the dichotomy between projection and practice within his team, underscoring the critical importance of knowing what your team is really doing. Only then can the team be properly managed and perform.
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🇫🇷French version of this article here.