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Outside the world of academics popular culture splendidly captured the corporate imperative with the clarion call of “Show me the money!” That demand is more incessant today with an ever increasing need in corporations to streamline operations and focus on activities that enable sustainable growth.
Unfortunately in many companies not all stakeholders and participants are personally interested in streamlining and sustainable growth and in an intelligent and seemingly constructive way are actually counterproductive to corporate goals. The role of Chief Devil’s Advocate at the top of the management structure is to be the “watchdog” of the company’s business interest, as a formal and institutionalized function. To prevent this person from becoming de facto CEO or alternatively lacking real power, he/she should work on a non-renewable fixed term basis like an ombudsman for business interest.
During an era of recession or slowing growth, in global corporations where operation is complex and influenced by different interests (typically at the sub-regional and regional levels), finding the right focus of management thinking and ensuring that management decisions are executed as they are meant is essential to hold companies on the right track.
The main challenge is to get the necessary, honest, constructive feedback; the challenge becomes more difficult the more senior the manager. This is the underlying reason for the three interrelated management issues in malfunctioning corporations.
The first issue is that too many contradictory interests influence the decision making process itself. The different stakeholders, especially at sub-regional and regional levels or between product lines or company functions, often pursue personal gain and do not mind if corporate ones come second or third (they have to take care of their buddies, “allies” on lower levels, as well). The second issue is the execution of tangled decisions, as this is the last chance for all affected parties to advance their hidden agendas by neglecting the actual decision or by disguising their agenda to make it look like the correct one in the light of a higher decision. The third issue is the defective or missing feedback loop. The defects of the feedback loop come from the above detailed motives. If there was a way to influence the decision for personal interest or to manipulate the execution with same personal gain in mind, the only thing to do in order to come clean and walk away is the fine-tuning of the feedback loop. Managers, top managers with hundreds of emails per day in their inboxes eat what they are fed with, until the bubbles burst. This is why fixing the feedback processes is the key to transparent and well functioning corporations.
Top managers are often lonely. Though teamwork and team spirit are emphasized and trained in multinational companies, in truth personal ambitions, goals, and hidden agendas are not off the table. Managers cannot share their doubts and fears with colleagues inside the company. Subordinates might see it as a weakness and would lose trust in their manager or may be motivated to supplant him. Sharing with subordinates may create a false “he is one of us” feeling that makes it even harder for the manager to motivate colleagues afterwards. Peers are mostly seen as competitors, sharing of fears, doubts, weaknesses and similar ideas is understandably not an option. Also higher level bosses do regular performance evaluation of their subordinates; it is a delicate issue to share fears, doubts and real weaknesses with one’s superiors. This implies the need of an institutionalized function for managers supporting them with feedback, impartially.
There is lot of talk about the personality and personalization of corporations. If you look at companies as “persons”, you can see that they are lonely, as well.
Upon inspection it is evident that different, conflicting interests impact corporate governance and stakeholders often follow their own interests, not that of the company. Internal politics, especially for managers below CxO level, lessen the ability and likelihood to stand up for the interest of the company. In the U.S. whistleblowers have enjoyed great recognition; they were celebrated as the saviors of corporate America. This phenomenon shows the need for protection of corporate interests. If we assume that malfunctioning and ambivalences inside companies are just as frequent as anywhere else in life then the relatively low number of whistleblowers is also a proof of difficulties in coming forward with problems concerning corporate governance.
A new top level management function should be created to address the above problems, that of the Chief Devil’s Advocate. The CDA should be a non-renewable fixed term position with the main responsibility of ensuring the highest possible level of transparency in management decision making, execution, in accordance with corporate processes and procedures. The CDA’s scope crosses all levels and internal boundaries of company activities. To make it clear, this unlimited scope does not mean decision making or executive authority, the CDA’s mandate ends with the right to take any issue to the boardroom for consideration.
Two questions arise instantly with the concept. What does the implication of the devil mean and what should the term limitation add to the solution.
The devil in the name of the title does not mean by any chance that this person is evil or is the origin of evil actions inside the company, to the contrary. The Chief Devil’s Advocate takes the delicate position of having to know about everything that influences decision making, execution or feedback. The nature of this position is to be doubtful, like the devil’s advocate who always takes the opposite side of an argument. What we have to keep in mind is that this senior manager plays the devil’s advocate for the sake of the company.
Term limitations are not a new invention, the consuls of ancient Rome come to mind as a first example. History knows consuls who even sacrificed their life for the republic and ones who used their office to accelerate their personal enrichment. Thus, term limitations do not guarantee that no CDA will follow his/her personal interest. It only makes this less likely and easier to eliminate. The aim is to make a powerful institution not to create more powerful people inside the company.
Trust is increased inside the company. Efficiency will be higher. There will be less hidden agendas, unnecessary projects and activities.
Because the introduction of the Chief Devil’s Advocate function is a major change in the life of any company, deep change management is required. As a first step, I suggest to implement a pilot project with a limited scope to quantify and evaluate the concrete challenges and to customize the function for the needs of the given company.