Horizontal Thinking

Larry Allgaier and Grant Reid

Think Horizontal
The case for organizing your company in teams.
52 T h e C o n f e r e n c e B o a r d Re v i e w
November/December 2008

o, top executives aren’t omnipotent—not even you. Having authority, a dedicated assistant, and a lovely window view don’t make you an expert on everything on which you need to make decisions. You can rely on your managers,but even you can’t peer inside their hearts to see if their counsel is impartial and comprehensive. One answer: teams. In Great Business Teams: Cracking the Code for Standout Performance (Wiley), management consultant Howard Guttman lays out guidelines for bringing together small groups, with members holding each other accountable for results, and best using their recommendations. The ultimategoal is what Guttman calls a horizontal organization, one whose key decisions are made by layers of teams, most of which come together to solve particular problems or answer questions—and then dissolve. “This is all about speed, moving things quickly,” he says. “It’s not about creating bureaucracy—ground rules, secret decoder rings. It’s not about creating teams for the sake of creating teams. Idon’t want to be the Johnny Appleseed of teams.” In working with companies over the years, Guttman has turned a number of executives into advocates for teambased decision-making, and two of them—Larry Allgaier, CEO of Novartis Global OTC, and Grant Reid, president of Mars Drinks—accompanied him to The Conference Board’s New York offices to speak with TCB Review editorin-chief Matthew Budman.

NJames Leynse

We’re supposed to be in the middle of a leadership crisis. Where do teams come in? Howard Guttman: Leadership is no longer about one-person rule. Today’s organizations are too complex and far-flung for the “leader” to make all the decisions. That doesn’t mean that organizations should be ruled by consensus—that’s dysfunctional, because it’s virtually impossible to get everyone toagree on every issue. Effective leaders balance the need for speed and a quality outcome with the need to involve members of their team. Grant Reid: My thought process around leadership used to be that I would make decisions, everyone would come in, I would give them the charter for the day, and they would all run off. Now I recognize that it’s not about me—it’s about getting the right team together,with the right expertise in that particular area, and getting the best out of that team. No one is as smart as everyone.

To a lot of people, setting up team meetings will unavoidably sound like, well, setting up more meetings. Don’t you two already spend enough time in meetings? Reid: Strangely enough, I actually spend less time. Larry Allgaier: It’s definitely less. Reid: There are lots ofmeetings I no longer need to go to. If you’re command-and-control, you have to be there to command and control; no major decision, no major recommendation can move forward without you there. When you have teams capable of making decisions, there are a lot of things you can let go. When I took over Mars Drinks, we were meeting globally, as a management team, every month. People were flying in fromAmerica and different parts of Europe; it was very time-consuming. Now we meet four times a year. We have scheduled telephone conversations with the whole team once a month so everybody’s clear on what they’re
November/December 2008

doing, and then we get on with it. Allgaier: High performance definitely goes with fewer and shorter meetings, because people are accountable—they know what theyneed to do, they come to the meeting, and they’re in and out. Guttman: But remember that this is not Pleasantville. We’re not all sitting around a table agreeing on things. That’s not the way it works. I was with my own core group of consultants this Saturday, in my office, discussing some contentious issues we had to deal with as a firm. In the end, we assigned a subteam to handle the issue—and...