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Neil Smith, CEO of Promontory Growth and Innovation, helps Fortune 750 companies dramatically improve performance by increasing profitability.

Avoiding Controversy

business man thinking imageA publishing company had two analytic units that essentially did the same thing. Each provided market research for the company’s extensive prospect mailing program to solicit subscriptions. The analytic units used research and statistics to determine the type of people who would buy a particular type of magazine. They then located appropriate mailing lists and monitored the results. They also created, implemented, and monitored the success of different types of offers (such as buy one, give one free as a gift).

One of the units reported directly into the flagship magazine division. The second unit reported to the centralized marketing division, which supported the other two publishing divisions. This duplication of effort stemmed from a situation many years earlier when the central analytic unit did a very poor job of supporting the flagship magazine. As a result, the flagship magazine division created its own unit. Since then the circumstances had changed. An executive who was considered an industry leader was running the central unit, and service levels had increased tremendously. Now both heads of their respective divisions agreed there should only be one group doing analytics, but each believed that his own unit could do the job better. The executive vice president (EVP) to whom both division heads reported did not want to address this issue for fear of demoralizing either team member, each of whom was a high performer. As a result, both analytic units were left untouched–and there was duplication.

Clearly it would have been far more efficient to have one unit performing the analytics function. But the two executives in charge of the units were fiercely protective of their own units. Neither believed that you could have one combined analytics center of excellence that reported to the other.

The EVP who oversaw the two divisions didn’t want to look like he was favoring one manager over the other. Each of them had a large degree of autonomy and responsibility, and it was important to him that each was in control of his own resources. He knew there should only be one unit, but he didn’t want to dictate the answer to them–he wanted them to figure it out for themselves. If he chose a winner, by default, there would be a loser. This was a zero-sum game, and the EVP didn’t want to demoralize either of his high-performing executives. And he had another concern. One of the potential losers was very close to the EVP’s boss, the CEO. If, as a result of his decision, the company lost an executive for whom it had high hopes, the EVP didn’t relish the thought of facing the CEO’s wrath.

Have there been times in your career when you went out of your way to avoid controversy? What was the result?