The Hindu Business Line : Decisions by Darbar

As no feedback is given and no explanations offered as to why a few ideas clicked and most were dismissed, the larger team continues to flounder and bad ideas linger in the system.

An arbitrary, Darbar-style approach to planning and approval makes for a bewildered and bitter team that may be no wiser for all the effort.

A worried business head, let’s call him Arun, confided in me the other day his utter disappointment with his management team’s inability to come up with a strategic blueprint for the future. “They are fine when it comes to business-as-usual,” he conceded. “They know the current businesses inside out, so when it comes to planning and executing growth for the existing products, they are both aggressive and realistic. But new businesses ...?” He shook his head sadly, and went on to describe the last stratplan meeting with weary resignation: in a nutshell, the team came up with a laundry list of new ideas, most of which were dismissed by the Executive Board as being unsuitable. “I don’t get it,” Arun went on, “some of these ideas have been chucked out so many times in the past, but they simply rehash them and bring them up again. And of the others, many were simply out of sync with our strategy. Maybe I need to overhaul the team itself.”

I continued probing and placed some questions before him.

Has senior management (read Arun) articulated growth expectations for each horizon (near-term, medium-term, long-term)?

Have the growth expectations been converted into clearly articulated goals for revenue and profits?

Have the boundaries of business been explained to the management team so they know what fits and does not fit with the corporate DNA?

Is there a structured process to new opportunity identification, showing the management team how to make a business case for each idea, how to filter ideas for strategic fit, how to slot ideas into time horizons?

Is there a feedback loop explaining to them the logic on which ideas have been rejected?

There were more such questions and to each of them, Arun’s response was an increasingly thoughtful negative. At the end of the session, he mused over my diagnosis: The problem, I told him, was not in his team, or at least, not entirely, but in the rather cavalier approach he and his Executive Board had taken towards new opportunity identification. It was their approach that needed an overhaul.

Arun’s modus operandi had emphasised top-down decision-making at the cost of capability-building, in what I call the Darbar approach to strategic planning.

In a Darbar approach, pretty much as in the emperor’s courts of yore, top management sets itself up in the role of arbiter – it does not engage in the process of ideation, in the process of inquiry and discovery, in alignment and communication, and focuses only on judgement. Instead of articulating and communicating the overall strategy to the larger team, and defining the linkages to the innovation and new opportunity goals, Arun assumed that his team would figure things out by some sort of magical osmosis. That’s like throwing a bunch of non-swimmers into the pool and looking surprised at their floundering.

Instead of using a dialogue to highlight the strategic issues and generate meaningful options, the team was expected to arrive at high-quality options from its limited understanding of the universe that lay outside its areas of expertise. And finally, when the inexperienced and under-equipped team produced a host of alternatives, Arun and the top management used their superior knowledge of both the strategic imperatives of the organisation as well as cross-sectoral experience gained from elsewhere to rapidly sift through the options, dismissing the unsuitable ones with no explanation.

The result: top management disappointed with the generation of poor-quality alternatives, junior management puzzled and bitter at the arbitrary dismissal of its work. As no feedback is given and no explanations offered as to why a few ideas clicked and most were dismissed, the larger team continues to flounder, bad ideas linger in the system, and the stage is set for a repetition of the sorry spectacle at next year’s Darbar. Meanwhile, the organisation is starting to believe that decisions are made arbitrarily, based only on what Arun “likes”, leading to cynicism and low morale.

Yes, decision-making on new opportunities is finally the purview of the top management, but an imperialistic Darbar approach will not create a team that is skilled in thinking up ideas for profitable growth. To break out of this vicious cycle, Arun and his top management team must communicate the organisation’s innovation goals afresh, given the very specific elements that ricochet around in the organisation’s embedded DNA, as also the competitive imperative of that time.

The team must be given the frameworks to evaluate its ideas for itself, and the Executive Board has to coach it through at least a couple of iterations. Together, they must articulate, communicate and get buy-in for the growth strategy from the rest of the organisation. Only then will each side measure up to the other’s expectations.

(Radhika Chadha is a consultant in strategy and innovation and co-author of Innovative India: Insights for the Thinking Manager. Karate-gy is the proprietary name of thestrategic exercises conducted by Paradigm Management Knowhow Ltd.)