Are Committees in Your Company Ever a Good Idea?

Committees.  Are they ever a good idea in your company? Sounds like a good excuse to make a decision to me, but hey, I'm just a type A, for-profit capitalist trying to make a dollar out of 15 cents.  People much smarter than me think they're a good idea, and I'm not talking about the non-profit down the street. 

Would it suprise you if I told you that Cisco has more than 60 committees to help run the tech giant?

First, here's a general description of what's going on at Cisco from Harvard Business:

"An article in the Wall Street Journal last week about a radical organizational experiment at Cisco Systems kicked off a fierce debate on this topic. The article described how Cisco has moved from a traditional top-down hierarchical structure to a more amorphous structure build around close to 60 different committees.

At the top of the organization sits an "Operating Committee" of 16 top executives, including Chief Executive Officer John Chambers. Twelve "Councils" with an average of 14 senior leaders report to that committee. Close to 50 "Boards" with an average of 14 less senior leaders report to the Councils (except for four Boards that report directly to the Operating Committee).

The more amorphous structure allows Cisco to bring together leaders from across its business to tackle critical problems, such as selling to small businesses. Of course, all these committees take time — It is not uncommon for top Cisco executives to serve on 10 or more committees and spend 30% of their time dealing with the issues raised there. Cisco said as it adds more businesses, it plans to expand the number of people who participate in these meetings from 750 senior employees to about 3,000. Mr. Chambers said part of his goal is to make employees rethink how they work and what they work on. The new management structure "makes everyone uncomfortable, including the CEO," he said.

Dig into what's available on the Cisco move to committees, and you'll find that much of the justification is to decentralize decision making and make the company more nimble, especially related to the need to keep growth rolling via acquisitions.  I've heard the need to keep moving fast described by others as the "zero strategy" strategy, which is meant to indicate that speed matters more than anything else at Cisco.  Of course, for those of us who look at committee structures as mechanisms that slow rather than facilitate progress, it's hard to believe the move could work.  This snippet from the Wall Street Journal would suggest the old committee profile is alive and well at Cisco, and it has nothing to do with speed:

"In late 2007...H-P started promoting a warranty for its switches that provides free upgrades and support. Under Cisco's new structure, a decision about how to respond to H-P's offering was delayed as it worked its way through multiple committees, these people said. Cisco didn't match H-P's promotion until this April [2009], and during that period Cisco's market share fell."

Whoops!  Could there be another reason for the move to committees, one that would be tied to an absolute in the business world, say, perhaps, power?  Funny you should ask that.  Here's a take on an alternative reason for the move to committees by CEO Chambers from BusinessWeek:

"Some people wonder if Chambers' strategy is being driven by ego as well as by Cisco's needs. Two former executives say Cisco's council-based approach, whatever its intended purpose, is an effective way for Chambers to consolidate power. Diluting authority by spreading it across committees may prevent any one person from gaining too much control. Sources also say that Cisco executives considered heirs apparent have rarely lasted at the company for long. "Being No. 2 at Cisco has not been a long-term assignment," says one former mid-level executive.

A Cisco spokesman dismisses any suggestion that ego plays a role in Cisco's strategy as "nonsense. John Chambers and Cisco's entire leadership are focused on driving Cisco's growth and business results." Chambers admits the council structure is unusual but argues it's the only way a company Cisco's size can move as fast as it needs to. He says the councils work and help identify talent throughout the company."

Ah, committees to consolidate power and prevent the rise of "the successor", ala Neo from the Matrix.  Now, that's a reason to have 60 committees I could believe.  It'll be interesting to watch how committees work at Cisco over the next couple of years. 

 

Comments

[Jon Ingham]

Hey Kris,

I think this is one of the most interesting things happening in HR related areas right now. More committees aren't something that's generally associated with management innovation, but Cisco are doing this in a really smart way.

So I'm watching with interest as well - but my bet is on them making this new structure and approach very successful - ie having a significant impact on their business results.

Cheers, Jon.

(Also see: http://blog.social-advantage.com/2009/08/ciscos-management-experiment.html)

[Wally Bock]

A nice and provocative post, Kris. Your question about whether "committees" become a way to keep power while appearing to give it away is interesting. And one way to keep the power is to maintain control over who sits on various committees.

At this point, the Cisco "management by committee" idea is a darling of the business press, but more PR than performance. My guess is that it will become like matrix management was for a while, a new name for the same old stuff. As such, it's likely to be as successful as the same old stuff. It will work when there's someone involved who can involve the energy of others while retaining the decision rights necessary to move quickly.

[Wally Bock]

Congratulations! This post was selected as one of the five best independent business blog posts of the week in my Three Star Leadership Midweek Review of the Business Blogs.

http://blog.threestarleadership.com/2009/12/16/121609-midweek-look-at-the-independent-business-blogs.aspx

Wally Bock