Break Up Fiefdoms

Restore discipline and revive creativity.
Originally published in Leadership Excellence™ Feb. 2006.

It's an old story: Individuals or groups —feeling the need to safeguard their jobs or secure their positions—set out to make themselves indispensable. They move to protect their turf and seize control over what work gets done and how it gets done. They lay claim to resources—personnel, technologies, budget—in a relentless drive to amass power. In short, they create fiefdoms.

Fiefdoms crop up at every level— individual, team, department, division, subsidiary—and they inflict severe damage. Fiefdoms stifle creativity, as the people ruling them resist new ideas to maintain the status quo; they spawn confusion, by creating processes (such as separate financial reporting) that conflict with those set by the company. The confusion worsens when fiefdom rulers present selected information about what’s happening in their area. Fiefdoms drain vital resources away from areas that really need them. Left intact, a fiefdom can kill a company.

Leaders must take prompt, decisive steps to break up fiefdoms. Since most fiefdom rulers will fight hard to survive attempts to fragment their turf, executives must approach the process with determination and discipline.

How can you best shatter fiefdoms? You need to strike a delicate balance. Specifically, you must restore discipline while also reviving fiefdom inhabitants’ ability and willingness to generate creative ideas for solving problems and satisfying customers.

Restoring Discipline

We need specific practices to restore discipline and bust fiefdoms. These practices are designed to make visible what’s happening, simplify operations, and restore discipline in processes and structures company-wide.

Here are three potent disciplines:

1. Process: the discipline of creating lean global processes and accessible data companywide. Streamline your reporting systems so that everyone can easily gain access to and understand data about the financial performance, historical and current market shares, headcount, customer data, and personnel data. For example, reduce the number of reports to the minimum required to convey needed information. At Microsoft, we had just 12 charts that answered 98 percent of all questions about the financial performance. You could see these charts for any division, or for the company, for any time period.

2. Behavior: the discipline of avoiding fragmentation. Ensure that IT, HR, procurement, PR, and other shared-services do not get duplicated in business units. Such fragmentation increases costs and creates massive duplication and confusion. For example, consider what happens when procurement is dispersed. In one company, a vendor sent a letter to headquarters asserting that the firm must be “going under,” since it hadn’t paid the vendor’s bills for six months. The reason? Employees could procure resources by simply contacting vendors of their choice when they wanted. And the company had no central system for handling ongoing procurement and payment.

3. People: the discipline of personnel rotation. Move people in and out of a team, department, or division to prevent a fiefdom from forming—and break up one that has started. When people are left in one place for many years, the company becomes reluctant to move them—even if they would make a better contribution elsewhere. Fiefdoms arise based on long-standing members’ expertise or seniority, which also brings with it a reluctance to change. Results? Missed opportunities and antiquated approaches as the skills and ambitions of the fiefdom’s inhabitants atrophy. To avoid this scenario, rotate valued employees in different assignments to give them various experiences. If a hot-shot knows he’ll be part of the marketing group for just two years, he won’t let himself get pulled into and absorbed by a fiefdom. He’d rather make a positive impact during his time there.

Reviving Creativity

In addition to restoring discipline, leaders must revive creative thinking. You want your people to think up bright ideas for pleasing customers, not finding ways to please their boss or advocating for their own position.

One way to stimulate creative thinking is to make a particular group responsible for an unfamiliar (to them) project, product, or service area. Deep experience in a business area is massively overvalued. Most smart people need just two or three months to grasp their responsibilities and generate great new ideas. Another way to foster creative thinking is to remove the “layers of wisdom” a good idea must go through to get implemented. When the boss and the boss’s boss insist on approving every idea, they tinker with the idea and change it. They often eliminate the distinctiveness of the idea, and frustrate the person who thought up the idea. The individual then wonders, “Why should I bother?”

Let people know that you’re there as a resource. Say, “If you think I can add something to your idea, come see me. I’m not the decision maker for your idea—you are. Bring me the results of your idea, and we’ll see how well you did.” When people know there’s no one hovering around them, they do a better job. Of course, people won’t always implement their ideas and generate good results. But when they bring their results to their boss, the two can discuss what happened. The boss can say, “What did you learn from this experience?” Employees then climb the learning curve faster.

By systematically breaking up nascent or advanced fiefdoms through organization-wide discipline and creativity, leaders can stave off the havoc that fiefdoms cause.