What is it?
“Catalytic mechanisms” are the term created by Jim Collins for organizational mechanisms that are extraordinarily powerful at aligning a business behind a chosen strategy. They are distinguished from other organizational tools by the following:
- Simple to implement
- Operate automatically
- Powerful – Can’t be ignored
When is it useful?
“Catalytic Mechanisms” are high leverage ways for the CEO to directly architect their organization. When embarking on a strategy that requires a broad change in behaviour, catalytic mechanisms should be the first organizational tool considered because of their power and simplicity.
They work because they force the organisation to the right thing, even when it is tough. They work automatically, so they can’t be overridden by “special” cases, managers with different priorities and “urgent” situations.
They are an alternative to complex heavyweight change programme of systems, policies, controls, procedures, and practices.
An example Jim Collins quotes is Granite Rock’s “Short Pay” whereby any customer is entitled to deduct the relevant amount from the invoice for any element that they are not happy with. This simple mechanism ensures that everyone in Granite Rock is committed to customer service, creates a corporate alignment that millions of $ spent on customer service training could never achieve.
The McKinsey “Up or Out” policy is a powerful catalytic mechanism to force organisational renewal. It inflicts short term pain – consultants perfectly able to do their job are asked to leave when they fail to be promoted to the next level by the time limit, reducing the firms short term earning capacity.
However, there are huge long term benefits:
- It forces the organisation to become very good at people development, they have to bring the next cohort through
- It forces the organisation to keep recruiting even in bad years, or face a permanent “hole” in its demographics
- The organisation has no “dead wood” of people who cannot be promoted, everyone is on their way “Up”
- The automatic rule reduces the personal element to “out” and enables McKinsey to maintain good relationships with alumni, even those managed out
I want to know more
Read Jim Collins “Good to Great”
How can you adapt this concept?
This concept is similar to “Simple Rules” concept of Kathleen Eisenhardt and Donald Sull