Do Not Stop at First Glance

Understand what goes on in different departments and how they are interconnected. Understand what goes on and what it is like to work on the “floor”.

by Palle Ellemann Knudsen

Great leaders understand their organizations vertically and horizontally. Vertically, they understand from a business perspective what goes on in the “machine room” of the company and what buyers of the product or service want. From an organizational perspective, great leaders understand what it is like to work on the lower levels of the organization and what the key drivers for motivation are for employees. Horizontally, great leaders understand all corners of the organization and how different functions and departments are connected in order to foster a dynamic and collaborative culture. A traditional career pattern, can build a vertical competency when a leader works his or her way up from “the bottom” of an organization. It often gives credibility to a leader, if he or she has been “one of them” (although some people will claim that leaders quickly forget what it is like to work on the “floor”).

Dancing. Photo by David Drebin. Courtesy of Torch Gallery.

It is more challenging to build insight and understanding of the organization horizontally, because it requires a lateral approach to career building. In many cases neither employee nor company pay much attention to the horizontal perspective, because the employee is so focused on specializing and developing core competences within one field. In the lower levels of organizations the horizontal perspective is not really valued. Some companies are addressing this challenge by building job rotation into their talent programs to ensure that the future leaders have broader experience with the organization before they are pushed up to top level positions. A company like American Express has created a Global Finance Rotation program for the most talented MBA/Master’s graduates in the company. The participants in the program are recruited internally as well as externally and placed into rotation to explore different Finance roles and functions. This high-profile development program is designed to create future Senior Finance leaders. Assignments are available in various countries, and offer continued exposure to the American Express Finance leadership team. The global construction company Skanska has a similar rotation program, where junior employees over a 24-month period are given the opportunity to develop their skills and knowledge of the company by working in several areas of the business (Safety, Project Accounting, Project Controls, Project Engineering, Assisting Superintendent, Marketing/Business Development & Preconstruction). “This is a formal program that goes far beyond moving employees through different areas of our corporate structure. Each employee in the program is under the instruction and guidance of senior personnel during the program and is assigned a mentor who keeps in regular contact with the participant,” says Heidi Burkett, HR manager at Skanska USA Building. In addition, the highest level of management will follow each employee’s progress in order to develop people in the shortest practical time into capable, productive managers, well versed in all aspects of the construction business. The company gains a loyalty from the employee by having such an opportunity. The expanded knowledge helps the participants become future leaders of Skanska and reinforces a pipeline of key talent. For whatever position the participant falls in after the program is completed, there is a greater understanding and empathy in appreciating the many roles that exist within the organization. From the employee’s perspective, they get to interact early in their career with many senior managers and different management styles, which helps mold the employee in creating their future business philosophy. Heidi Burkett stresses that “many of the company’s senior managers and corporate officers started from entry level positions within Skanska, corporate predecessors or one of our subsidiaries, and are effective due to their particular abilities as shaped by the training and leadership of their seniors in the company.”


Flasher. Photo by David Drebin. Courtesy of Torch Gallery.

Job rotation programs tend to be designed for top talents and are thereby limited to a few people. Some companies have developed other practices to reach out more broadly and build a horizontal perspective into the culture and mindset of the company. The Norwegian video technology company Tandberg has since the early days been very aware of fostering a horizontal perspective within the organization. The organizational structure is extremely flat and people have very high level job descriptions. On the contrary, people are encouraged to do what they feel is right for the business. They should try out new things and “ask for forgiveness rather than permission.” Events and trainings are designed to make people from all parts of the organization connect and their own video technology allows people to be instantly “face-to-face” connected at any time. Before the organization became too big, all employees – not just the sales reps – attended the same sales training and all employees went together to the largest technology fair in Europe. The company still gathers newly hired people from all over the world and all different departments to the same new hire three day training sessions in Oslo – receptionists, sales reps and country managers all together. The same practices of gathering people from all parts of the business to the same events, trainings and new hire orientation is also in place in another recognized Best Workplace, Admiral Group. The UK based car insurance company Admiral Group is the only large company to be recognized ten years in a row as one of the Best Workplaces in Europe. With the fast growth of the organization, Admiral has realized that it needs more systems to make sure that people move around in the company and build the horizontal understanding that is necessary to lead. Part of the strategy for building horizontal understanding and keeping people with the organization is to have a proactive talent spotting program. HR works closely with operation managers to be constantly focusing on talent spotting and encourage people to move to another department, if that is what it takes to help them grow and develop themselves. “Obviously, it is difficult for a team to lose a talent, but it is much better that we keep the talent within the organization and make sure the person is continuing to grow and be happy working for Admiral,” says People Services Manager Ceri Assiratti. The talent spotting program also identifies people who have the potential to do more than what their existing job can give them. Some of these people may be invited to take part in a so-called business dilemma group, where talented people from different parts of the business regularly meet to work on a real business dilemma and try to come up with a solution. There is no specific timeline for the task, because the company wants the group to really get to the bottom of the dilemma. When there is a recommendation for a solution, it is presented to the top level of the company.

Heather. Photo by David Drebin. Courtesy of Torch Gallery.

Admiral Group certainly also takes the vertical perspective into account, when it comes to building managers and top leaders. The vast majority of their managers and executives are recruited internally and all managers and executives are trained to have an “inverted triangle” mindset, which is that managers need to focus on supporting the people working in their team instead of having people reporting to them. The hierarchical pyramid is in other words inverted and requires a totally different approach to management than traditional management models. Senior Managers are on a rotation to work weekends and sit with the call center employees taking weekend-shifts, a practice that includes the CEO Henry Engelhardt, who emphasizes the benefits of the interactions with the staff because “when you sit with staff you never fail to learn something new about the business.” When Admiral Group expands into a new market, the new country manager starts out by working 7-8 months in the headquarters, where he or she tries out all functions of the business including selling car insurance on the phone or receiving claims from customers. Other great workplaces have similar practices, such as Belgian shoe retailer Schoenen Torfs, where the CEO Wouter Torfs often joins the team in one of his 61 stores on Saturdays and services customers like any other sales person in the store. This practice is helping him to keep a very close relationship with employees like it has always been the tradition in the old family-company, where he is third generation management. Similarly important, it is giving him better insight to what customers want, better than what the sales figures can give him. This is crucial information, when he decides what shoes to order for the next season. Great leaders like Henry Engelhardt and Wouter Torfs are role models for the leadership behavior they want to foster in Admiral Group and Schoenen Torfs. Despite not working themselves up from the bottom, they do show a particular vertical understanding. While role modeling from the top leaders is important for fostering a particular culture in the organization, it is equally important how Admiral Group, Schoenen Torfs, Tandberg, American Express and Skanska build systems and practices that give employees the opportunities and encourage them to build a strong insight and connection to the entire organization.

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Published in the hard-copy of Work Style Magazine, Winter 2011