Business Transitions, Inc.

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Newsletter October 2001

Managing for Results through Dynamic Consensus

   Jay Kalawar, CEO, Business Transitions, Inc.

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Challenges in Getting to Consensus

Executives and managers need to make decisions on a daily basis that may require teaming up with experts in sales and marketing, operations, or technology, to name a few.  The effectiveness of such joint action depends upon how much of a common understanding the manager and the expert have of the problems and solutions at hand.

The challenge most managers face is getting to and maintaining common understanding – consensus – especially in inherently dynamic situations. What has become evident is unilateral decision-making, without consensus input from managers and team members, substantially increases the likelihood of failures in implementation and execution, often resulting in cost overruns and missed revenue targets. Many medium and large companies under pressure to maintain and grow markets and revenues, frequently end up here because they lack a basic productive consensus based problem solving and decision making process.

Getting to consensus is often costly and time consuming – is there a viable alternate method?

This article suggests one, in the context of an executive at a multi-state bank, who implements a plan to increase revenues and profitability while forced to make costly decisions at the pinch points she and her team encounter in the process.

Pressure to Meet Targets - North Eastern Banc Corp

In the summer of 2000, Christine Howe, a senior executive responsible for four regions of the multi-state North Eastern Banc Corp (NEBC), was struggling to meet her revenue objectives for the last two quarters of the year.

Of immediate concern was the limited time and budget she had, to implement 5 new ATMs by the end of the year. How she allocated the budget among the four regions could potentially determine a decrease in costs and an increase in revenues.

Howe kicked around ideas on how she could manage the project.  As regional president, a few years before, she had employed a well-known consulting practice to help her with two successful ATM implementation projects, which had brought her to the senior executive position at NEBC.  This time around, her tight budget would not allow for similar expenses.

As she evaluated the regions for best markets and excess branch costs, her thoughts kept coming back to Charles Blum, President of the tri-state counties region. He alone, of her 4 regional presidents, had a successful track record of getting a complex team of in-house and vendor experts working together to get things done –by coaching and facilitation, than by fiat.

Tri-state counties, a distant second in market size and growth potential, had a good balance of branches and ATMs in place.  Though there were limited opportunities to add ATMs in this region, Howe believed Blum had the capability to get the project through within the next two quarters, to help meet her performance objectives for the year. Once successful, Howe believed she could justify an increase in the ATM budgets next year, for the other regions.

Howe knew that while Blum was not an expert, he was a consensus builder.  A complex project like ATM implementations was fraught with trials and tribulations of rationalizing locations and technology, and would require Blum’s past experience and success in bringing a team together. 

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Implementing ATMs in Tri-State Counties

In early August, the project was launched with a team of location experts who would determine the right ATM location, from the perspective of traffic patterns, security and serviceability. A real estate specialist, traffic patterns expert, operations, security and technology specialists were rapidly brought in to regional HQ, as were security and technology specialists representing vendors. 

Together, the team spent the week understanding requirements, collecting relevant data with some preliminary analysis. A week later, upon completion of their individual analysis, the experts returned to HQ to present findings, recommendations and action plans.

On Monday morning, Blum embarked on the team meeting on a high note. Time was running out and he and Howe expected to nail down recommendations and begin preliminary work on the implementation plan by the end of the week. As the meetings progressed, it became clear that there were wide differences in the perspectives of the experts and no one was willing to come to a meeting point.  Towards the middle of the following week, despite his efforts to meet each expert individually and facilitate consensus amongst them, both Howe and Blum could not find any process to bring them together. With Howe’s reluctant approval, Blum called his friend, Robert Goetze, for a possible solution.

Reaching Out

Robert Goetze, Blum’s buddy from business school, was an engagement manager with McCain & Co, a well know management consulting firm. Blum shared his difficulty in bringing his team of experts to consensus on recommendations.

Goetze indicated that the challenge Blum was facing was common enough that McCain regularly had to help their clients through the consensus building process. “The key“, Goetze said, “is to bring together your diverse knowledge sources of real estate, safety and security, operations and technology and apply it rapidly to come to a cost-effective and practical solution. You know, we can help you.  Why don’t I write up a proposal for Ms. Howe?” Blum agreed to take a look.

McCain’s proposal detailed they would bring in their consensus building and problem solving process, an experienced engagement manager and two associates, to lead the NEBC team and facilitate the ATM project. The total cost would be approximately $200,000 plus expenses. 

Blum felt he had little choice but to present the proposal to Howe.  Given their time crunch, involving outside advise would be the most viable way to get the stalled ATM project off the ground.  Disappointed with Blum’s strong recommendation to bring them in, Howe also knew that McCain would help the NEBC team reach their goal, at a cost. To meet her targets this year, she would have to spend more than she had anticipated and, having championed this project to her CEO, she could not give up at this critical juncture.

Consultants Bring It Together

It was well into the end of September when the McCain consultants came up the learning curve.  Howe’s goal was had been to get the ATMs in place by December.  McCain’s engagement manager did not think it was feasible; his team would need 4 weeks to develop a practical implementation plan. 

Over the next four weeks, the NEBC team was shepherded through the McCain consensus problem-solving process. They developed and rationalized a common set of criteria and spent a day discussing how they should be weighted. This laid the foundation to analyze potential ATM locations, technologies and the servicing levels that each location required.

Howe and Blum, in the loop at critical stages, helped fine-tune the criteria and the short list of locations and technologies selected by the experts. The team reported back with consensus recommendations on locations and technologies. Now, all that remained was to get exact quotes from technology vendors and real estate owners to develop detailed cost-benefit analysis. 

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