How to create team alignment and autonomy | Stephen Bungay

Hey everyone. Welcome to the new economy. I'm Scott Levy, CEO and founder of Result Maps, where we're on a mission to help the world be its inspired best. That means helping CEOs and leaders build healthy cultures of relentless execution so you hit your numbers and thrive no matter where your people are or what challenges come your way. One way we do that is bringing you these sessions with leaders who've learned to thrive even even as they navigated uncharted territory and thorny challenges. The idea is to get you actionable, learning you can put into practice immediately to lead and navigate at your best as you thrive forward. The most immediately useful lessons in teamwork and performance come from the worlds of military arts, performing arts and sports. In this episode, I talk with Stephen Bungay. He's a director of the Strategic Management center where he teaches in programs on strategic decisions and translating strategy into action. He's also a sought after conference speaker on topics related to strategy, leadership and thriving through disruption. Before joining Ashridge, Stephen was a vice president and partner at the Boston Consulting Group, where his clients ranged from Shell Oil to the elite Mercedes F1 racing team. His interest in strategy led him to publish two books on military history that garnered him expert historian status. And his most recent book really caught my attention. It shares lessons on how leaders thrive through high disruption environments. It's based on a study of military history and really interesting. If you're trying to make sense of all the different frameworks for how to think about strategy, how to tie that to execution, then this is a great source.

I'd love to hear your observations on the talented leader versus a learnable skill that can be propagated throughout an organization.

The origins of leading through intent, as I call it, are actually quite interesting because they happen sort of by chance. I was writing my second book on military history, which is called Alamein, and it's about the campaign in the Northwest desert in the Second World War. And as everybody knows, the Germans were commanded by a famous general called Erwin Rommel. And the British couldn't understand why it was that the Germans were able to give them the runaround for so long. They seemed to be very fast, very flexible, very adaptive, but everything they did seem to cohere and make sense. And this didn't make any sense to the Brits because the Germans are supposed to be slow, ponderous and devoted to detail plans because of something called Teutonic thoroughness. And so they had to explain this and they came up with the idea that it was all down to this guy Rommel. Rommel had, and I quote the words of one British general overcome the innate inflexibility of the German military mind. And in some way that nobody was able to explain, was able to infect 45,000 German soldiers who presumably had also got innately rigid minds in about a week and turned them into these brilliant initiative grabbing improvisers. And I thought, what a load of crap. Yeah, they had all sorts of explanation for it was because he was born in southwest Germany in Wurchenberg, and all the really rigid ones are the Prussians who are off in the northeast. So he was kind of a Brit, but born in the wrong place. This is a nonsense. That was amazing to read it. Anyway, I started to dig and what I discovered is that Rommel was actually very, very good at putting into practice a leadership system which had been created nearly 100 years before 1940 by a bunch of rigid Prussians. And he'd been trained how to lead in this way. And it was known as Aufstragstartik. And the military today call it mission command and I call it leading through intent. And the origins of that are really interesting as well because it started even earlier, at the beginning of the 19th century, when a famous writer called Carl von Clausewitz tried to explain the military genius of Napoleon, analyzed his methods and turned this into a system which later figures like Helmut von Moltke picked up. And what they did was to work out the system, the logic behind Napoleon's actions, which appeared to be intuitive but weren't, and create an organization which acted like that. So it always, it was always able to execute a strategy brilliantly, even if there wasn't a genius in charge. It's been said in fact, that they systematized military genius and institutionalized it. So if you get a bunch of very good sort of above average guys, they will outperform a lone genius. And I thought, well, that's an act of genius. And what it means for me is that as they've done all this, it ought to be transferable. And indeed, after the war, the British and American armies, bemused by how it was that the German armies was able to last so long against the two post war superpowers, the USSR and the usa, plus the remains of the British Empire, they discovered this and they thought, well, why don't we take it over? And so they did and they transferred it to their organizations with varying degrees of success. The, the Israelis took it over as well. So it's in principle transferable. And I thought, why can't we transfer it to business. And so that's what my book the Art of Action is about. It involves a certain way of formulating strategy. You don't formulate it as a detailed plan. You formulate it as what they call an intent, which tells people what to achieve and why. And then having explained to them the context made the intent clear, they then go away, have a think and come back and tell you how they are going to pay their part in the plan, how they're actually going to execute it. So it's a process that I call briefing, right? The superior briefs the subordinate and back briefing, because the subordinate briefs the superior back, which, if you think about it, a very simple thing to do. But it's an awful lot better way of communicating than sending messages from the top in ever increasing numbers and ever greater forms on PowerPoints and hoping that somebody, somewhere down the organization has maybe understood what you meant. And discovery gives you six months later that they didn't even hear the message, let alone understand it. This is how the army do it, right?

This is how we do it in remote work. I mean, this is what we've been doing. Like, what's fascinating is I've never heard it named that way. There was an old way that was more command and control of here's my spec. You guys give it back to me and you do it exactly as I said. And what we found is we had to to survive. Here's my initial spec. But I need you to come back to me with your concerns and your recommendations.

What you do, you use this method to get alignment right, and that creates focus. And that means unity of effort. The military call it unity of effort. I call it focus. Right? But when you get going, as one of the father of this method said, no plan survives first contact with the enemy's main body. So you've got to be able to adapt. And of course, most people think this is impossible. You do one or the other. And what they realized is that no, you don't. In fact, the more alignment you have, the more autonomy you can give people. And you give people a freedom of decision and action within set boundaries and encourage them to use that. So I understand the higher intent. I go out, I look around at the situation, and I'm assessing it all the time. And I make decisions based on how the situation's developed. And if what we agreed no longer makes sense in terms of how I'm going to do it, I still try and act in line with the intention, but I do it in a different way. And I don't have to ask permission because I've already got it. Because I know what my boundary conditions are, right? So if the intent is cross the river and I said, okay, I'll build a bridge, but when I get out there I find, oh, actually there's a load of boats, we can use those, it'll be quicker. Or I go upstream and say, actually we don't need a bridge or boats because we can ford the river here. That's what I'll do and I'll tell the boss when I've done it. Got over the river quicker than we thought at lower cost. Aha. That's the basic, the basic principle. So you have high alignment and high autonomy. If you've got lower low alignment and you give people autonomy, you get chaos. I'm afraid a lot of organizations that are trying to introduce agile at scale are finding that, you know, they're very agile, they're really fast, but because they're not aligned, they make an even bigger mess faster than they would have done had they used the waterfall method. Because agile is more effective, right? And if you have, if you assume that the only way to align is through high control, then you've only got one decision maker, it's the boss. Everyone goes to the boss. Boss gets overwhelmed and the organization's very slow and totally inflexible, totally unable to adapt.

Right?

So actually this is the best of all possible worlds. And you don't have to make a trade off between alignment and autonomy, which is the other mistake people make. Once you've got high alignment, you give people as much autonomy, as much freedom of action as you can. And so you move around like this, but you're always going in the same direction, Right. If you want to go north, you're heading north, but someone may go, oh, north, northwest for a bit and then come back for a bit because there's some obstacle, there's something else. You all end up in the same place. And this creates a high level. If you do this across the organization, it creates a high level of trust between people. It's a great silo buster because if people in their silos, one of the rules is you have to think two levels up. So you've got several departments reporting to the business unit head and the business unit head reports into exco. So the guys in the departments are going to think business unit level. So all of them in their various functions, whether it's ops, sales, hr, marketing and so on, are all going to be trying to optimize the performance of the business unit and they know that each other knows that that's what they're going to do. And so when they get together, they make sure that there are no gaps and no overlaps between them. In the back briefing process, I try and do these things cross functionally all at the same time rather than individual by individual. And one of the exercises we do is to get proper alignment. Have we made sure there are no gaps and no overlaps between us? What are our interdependencies? Where do we rely on each other for support and so on and so forth and then off you go and people sort out problems for themselves as they go.

It's super interesting that this predates scientific management because I always thought of this as scientific management. Okay, we're going to let that go and evolve. But you've actually. It's more cyclical is what this implies.

That's right. Well, you've got it. So why isn't it common practice in business? And I think the reason is scientific management. There comes Taylor in 1911 and tells everybody, right, and says everyone, managers think workers do keep them apart. Gets out these, you know, the stopwatches and all the rest of it. And then Henry Ford makes his Model Ts and it's fantastic release of productivity and all the rest of it. And that haunts the corridors of businesses even today. And of course it's fine if you're making Model T faults and they're all black.

So much of management theory comes from industrial production of automobiles and manufacturing between Frederick Winslow Taylor up through Toyota, up through electronics and semiconductor manufacturing. And it's like that advanced certain things, but we got stuck.

Yes, it dominates our minds. And of course, I mean Taylor, bless him, he's one of those classic people who has a great idea and thinks he's discovered the whole truth. And actually what he's done is discover a half truth. If you want reliability and quality and all the products to be exactly the same and you want to hone efficiency, that's it. And the workers that turn into robots, well, of course, if you look at any car plant or any manufacturing facility today, there aren't any works anymore. They're all robots. They're real robots. And so we tailorized everything that can be Taylorized. However, there's a whole load of other stuff that goes on in businesses which human beings have to perform. And we don't want them to perform like robots. We want them to switch on their brains. That's why we pay them these vast salaries, because we want them to think and Exercise what the Germans call independent thinking, commitment independent. They have to understand what really matters and exercise judgment over what to do in the light of that. And no robot as yet though maybe Google's working on it can do that. So we need the other bit of the story and we're all held enthralled to Taylor. I think it's very subtle. We don't talk about him, but he's there. The backs I don't know himself.

Sometimes you know what goes into executing successfully the way you view it.

I analyze the problem in terms of three gaps. So the first one is the knowledge gap. That means we never know as much as we'd like to know, so we can't make perfect plans. So what matters most? So to close that gap, you've got to think hard about what you do know. And here it's a matter of using common sense, business judgment and get into the fundamentals. You know, people often took talk about trying to look forward a long way. It's pretty difficult. Strategy is not really about the long term, it's about the fundamentals. So think deeper what drives success in this business and therefore what matters most now. Or as I say to people, an executive has to answer the Spice Girls question, which is tell me what you want, what you really really want and then please shut up. Don't go on into detail because you'll only confuse me. So what matters most and the way, and that is how you formulate an intent. This is we must achieve and why. And to make an intent clear, it has to be a choice. You know, I know we'd all like profitable growth, but if I, Aspen, am sitting in front of a customer offering me a very large deal at a very low margin at the end of the year, do you want me to take it on and get the revenue or do you want me to walk away and protect our profits? Well, it could be either depending on but if you haven't told me which one it is, what the hell am I supposed to do? So you senior executives has to make choices. They'd much rather send out a whole list of initiatives and work plans and targets and KPIs and all that crap. But actually it comes down to making a choice. What you then do, you have to close the next gap, which is the alignment gap. And the way you choose, you close that through this briefing back briefing process. So I understand your intent, I come up with my own, which is yours, plus a level of specificity about how it's going to work in my area, be it A function or a country or whatever. And then off we go. There's another gap waiting for us. And I call that the effects gap, which is the difference between what we'd like our actions to achieve and what they actually achieve in terms of outcomes. And that exists because when we take action and the external world, we encounter independent wills on the part of our customers, for example, or on the part of our competitors who are trying to make our lives difficult. And so when we launch this new product and are predicting 50% uptake in sales revenue, it may turn out that our customers are less enthusiastic than we think they ought to be, or that our competitors come in and undercut us, the bastards. And so we got to be able to react to this gap as well. And that's where the autonomy comes in of giving people that freedom of action to say, ah, no, okay, this ain't going to work, so we're going to go another way. And in your reviews, the first question should not be, let's have a look at the numbers. How well are we doing? Oh my God, they're bad. Who's to blame? Let's get back on track. The first question should be, has the situation changed? In other words, don't assume the plan we had was correct, but first interrogate the plan. Is the plan still valid? And if the answer is yes, then you can get onto the numbers. If the answer is no, the situation has changed, then you need to say so. Do we have to do things differently in future from the way we were expecting in order to still achieve our intent? And that way reviews become forward looking rather than backward looking and action orientated rather than just trying to hold somebody's feet to the fire and give them a grilling, which is what most of them tend to be.

Do you think of that as if the situations change? Is that a tactical change or a strategic change?

If it's a tactical change, we change how we are doing what we'd originally intend to do. If it's a strategic change, we may have to come back to our intent and say, actually we're not going to get this. This is no longer realistic. We're going to have to change that. But I can, I can space it because I'm doing this at each level. Remember, each level is more specific. I'm as, okay, so in the, in the sales function here, we're not hitting our targets. So, so why might that be? Because we're trying to launch a new product, or maybe the new product's no good. But then when we go into it we discover, oh, well, actually we've been making all these sales calls as we were asked to, but we haven't been talking to the real decision makers because for this product, it's a different kind. So we're going to go back and do that, but the product's okay. If we were to reach the conclusion, oh, actually look, this product's a lemon, we were wrong about that. Then we have a bigger level change to undertake and we're going to have to go up a level. But if it's tactical, we can do something about it. And you have lots of debate, you know, constructive debates about that. I've been at many, you know, so what, why is this going wrong? And instead of, well, you didn't do that, right, you, you get people starting to debate different hypotheses which you can then test to make sure the diagnosis is right rather than R and D say, well, sales screwed up and sales come back say, oh, the product's no good or the pricing's wrong or whatever.

Is there a cadence of checking in on that tactical situation?

I think that checking in, people need to adopt what I call an operating rhythm. And that's like heartbeat. And some animals, heartbeats like an elephant, are like boom, boom, boom. And others like a mouse. A boom, boom, boom, boom, boom, boom. And you've got to decide what kind of an animal your business is. So if you're in big pharma and you've got a 15 year time horizon, you've got an elephant's rhythm, right? So let's review once a quarter, maybe every half year, right? Let's see how the clinical trials are getting on and so on and so forth. If you're in retailing, you probably want a weekly one because you're a mouse. Boom, boom, boom. But I just stick to, well, everyone has monthly meetings and quarterly. That may not make sense. So decide what your rhythm should be and make it your heartbeat.

I know that you've done some work with, I think it was a Formula one team, for example.

It was the Mercedes formula.

Okay. What type of rhythm do they have? How often are they checking?

They're a fascinating organization. One of the reasons they're fascinating is that they cover extremes. So they have a highly, highly creative side, designing the car according to regulations that change every year. And they want to get started working on that as soon as they can. Each season they have then the, the other extreme, the pit stops that you see, which take place in seconds. And it's all about Taylor, it's about honed Perfection. Cutting a tenth of a second off the tyre change is going to be really important in situations like this, so you don't want some genius coming along two seconds before Lewis arrives saying, I've just come up with a new way of changing the tyres. Why don't we try this one, please? Right, so you've got this rigid stuff and you've got the highly creative stuff, and in the middle, you've got the racing season, which of course is determined by the number of races. So you got three heartbeats. And what. What we try and do is to see whether we can get the enough points in a season to be able to switch resources onto next year's car, rather than putting upgrades on this year's one before everybody else, because in the long run, that'll give us an advantage. One of the slogans we adopted was advantage is relative rate of learning, because there are all sorts of things you don't know. Despite the huge amounts of data you have, tests and everything, when the car goes on the grid for the first race of the year, nobody really knows what's going to happen. And when they leave the grid with Lewis and Paul, nobody really knows what's going to happen at the first corner. Maybe Vettel or Jumpus, you know, or is it going to rain or is there going to be a crash? And the safety, there are all these uncertainties. So they're highly attuned, but also highly adaptive and very, very, very fast indeed. I mean, there are no questions. I mean, another interesting paradox is that they're almost fanatical about being one team. It is always the team, the team, the team, the team, the team. When Lewis says that when he comes on tv, everyone thinks, oh, yeah, but it's true. Actually, at the same time, they have a very precise sense of individual accountability and who is responsible for taking any decision at any particular point in time. And everybody does what they say. So, for example, when the car's in the garage, the final call about anything that happens is the chief engineer. There's a line at the edge of the gap. When it crosses the line, the final call is taken by the chief strategist. They just switch. Now you're in charge. It's like pilots saying, you have control. And they always confer, I have control, now I'm handing back control to you. I have control. They do that all the time. No arguments, because they got to make decisions just like that.

What do you see hold teams back the most when they're trying to get systems like this in place and really Lean into them.

Well, they're legacy systems, of course, but you know, what I'm tempted to say in answer to your question is what's going on in their own minds and the barriers that they believe exist and that they've made up, they, they won't let us. Oh, we'd love to do this, but they won't let us. Anyone's point up. And you wonder who they are. And gradually, you know, you move up the organization. I'm going to meet them at some stage. And then you get, you get to the board and you can sort of, you think, well, I can smell the sulfur coming out now. They're all going to have little horns. Then when they come in, it's them. I found them at last. You go into the board and say, well, you know, we, yeah, we'd love to do these investments, but I'm afraid they won't let us. And they talk about the investors, the shareholders and the pundits and the press and the regulators and the politicians and that everyone's constrained by them. And when you talk about pushing, you find that they usually don't exist. I case at a pharmaceutical company, recruitment was going very badly in Europe and very well in the U.S. and so somebody came up with the idea, why don't we, we're going to do it 50, 50. Why don't we have 70% in the US and 30% in Europe? We can't do that. Why not? Why? It's in the plan. 50, 50. And it's been approved in any way. If we do that, the US will be overburdened. They'll be spending more recruiting patients than they said. Well, who set the budget? Well, we set the budget, actually. Well, why don't we change the budget? Who's going to stop us? What's the problem? So it's approved. So we'll tell them we're doing it this way. What's more important, waiting another six months before we file and having a load of patients whose lives we could save die in the meantime or the fucking budget? So they just changed it and lo and behold, nobody was upset and they filed early. Things like that go on all the time.

Is there something that gets in CEOs ways when they make this transition that.

You see as the same type of mindset thing?

Yeah. So what holds people back? Well, there are, there are two people things that hold people back. One is senior people who are actually control freaks, and the other is junior people who won't step up and accept responsibility for decisions. And the reason for both of those is fear. Senior people get very nervous when they're not in control and they have to sort of learn to trust. And junior people are fearful of making decisions. Some people just want to follow due process and not be responsible for any outcome. Because by saying an outcome, we are, we're saying this is something you don't control. You can only influence actually what matters in business. It's not what we control, which isn't very much what we can influence. And getting over that, I don't have control, but I'm going to try and influence things hurdle can be very bad. The other thing is the organization itself. Now this occurs in big corporates and there are two things that can stop you. One is if the organization structure is so opaque that, that you cannot assign clear accountabilities for decisions in the way that the Mercedes F1 team had got honed down to the nth degree of position. If all decisions are taken by committees and so on, then you don't know who you asking to do what anyway. And the other is processes. And if the processes are so convoluted and so numerous that effectively no one, none of your management can take any decisions about anything because the organization has a process for it, you can't do this either. You know, you typically you get, you talk to people who have budgets of $100 million, but they have to get permission to order a sandwich lunch for a business meeting. You know, I mean, I've actually had that because it's on some expense thing and says some expense policy, you know, or travel permissions or this sort of garbage which has accrued over years. And quite often I've been for some organizations where nobody actually knows where these processes come from or why they're there or where they start or where they finish because nobody's in charge of the process. No one can stop it. And they're sort of prisoners. The, you know, we talk about empowerment and assume that power rests with some people in the organization somewhere and they can give it away to others. But sometimes nobody in the organization is empowered. The organization itself has sucked all the power away and put it into processes and structure or there's some plan somewhere which has sucked all the power away from the managers, your senior vice presidents, you know, your board members done can't decide on anything because it's all been laid out and this way it works there.

You can learn more about Stephen's take on strategy in his great work the.

Art of Action, available on Amazon.

For more information, visit resultmaps.com latest.