Mandating new processes, like reducing meetings, is ineffective if the collective beliefs driving old behaviors (e.g., lack of trust) are not addressed. To make change stick, leaders must first surface, discuss, and realign the team's shared assumptions to support the new structure.
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Drawing on Charlie Munger's wisdom, investment management problems often stem from misaligned incentives. Instead of trying to change people's actions directly, leaders should redesign the incentive structure. Rational individuals will naturally align their behavior with well-constructed incentives that drive desired client outcomes.
Effective delegation of decision-making authority is impossible without first ensuring leaders are deeply aligned on organizational objectives. When individuals are empowered to make choices but pull in different directions, the result is a quagmire, not progress. Alignment must precede autonomy.
To avoid stifling teams with bureaucracy, leaders should provide slightly less structure than seems necessary. This approach, described as "give ground grudgingly," forces teams to think actively and prevents the feeling of "walking in the muck" that comes from excessive process. It's a sign of a healthy system when people feel they need a bit more structure, not less.
Focusing on "bad to great" is more effective than "good to great" when scaling. Bad behaviors and destructive norms are so corrosive that they make it impossible for excellence to take root. A leader's first job in a turnaround or scaling effort is to eliminate the bad—like dirty bathrooms or incompetent employees—before trying to implement the good.
The belief that people fail due to lack of will leads to blame. Shifting to 'people do well if they can' reframes failure as a skill gap, not a will gap. This moves your role from enforcer to helper, focusing you on identifying and building missing skills.
When driving major organizational change, a data-driven approach from the start is crucial for overcoming emotional resistance to established ways of working. Building a strong business case based on financial and market metrics can depersonalize the discussion and align stakeholders more quickly than relying on vision alone.
The most effective way to build strategic alignment is not top-down or bottom-up, but 'inside-out.' Engage middle managers (Directors, VPs) first, as they have crucial visibility into both executive strategy and the daily realities of their teams and customers, making them the strongest initial advocates for change.
Managers cannot just be soldiers executing orders. If you don't truly believe in a strategy, you cannot effectively inspire your team. You must engage leadership to find an angle you can genuinely support or decompose the idea into testable hypotheses you can commit to.
Gaining genuine team alignment is more complex than getting a superficial agreement. It involves actively surfacing unspoken assumptions and hidden contexts to ensure that when the team agrees, they are all agreeing to the same, fully understood plan.
Leaders readily design tangible elements like incentives, job ladders, and meeting agendas. However, they often feel uncomfortable with the idea of intentionally designing the overall "process" or "environment," fearing it's overly controlling or manipulative, despite it being a logical extension of their other design activities.
