Peer Councils

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This general concept of a council of peers, is specifically addressed by Prof. Jeffrey Nielsen as a tool for Peer-Based Management in corporations.


Prof. Jeffrey Nielsen:

"Paving the Way With Peer Councils

We need to see an organization as a portfolio of goods and services, not as an assortment of jobs organized functionally and separated divisionally. We need to see managers playing the constant role of cross-fertilizers of ideas and best practices, not as agents of top-down command and control.

One effective way to do this is to create peer councils. When an organization charters peer councils, composed of individuals from all ranks and areas of the organization, employees get out of their hierarchic roles and are able to see things differently. People from all over the organization get to know one another and learn how to communicate genuinely. People productively work together and cooperate when they share common goals, receive proper information, have the skill sets and are able to recognize, utilize and balance each other’s strengths and weaknesses. Many of these necessary elements are missing in the traditional rank-based organization with its centralized authority and top-down command structure. With peer councils, a greater sense of community is developed that fosters increased competency in all members of the organization. Councils provide the vehicle for this development. The goals of peer-based councils are as follows:

• To foster a sense of equal standing and genuine communication among all employees

• To allow everyone in the organization to contribute to strategic thinking and decision-making

• To ensure that everyone in the organization begins to think like an owner

• To provide everyone in the organization with knowledge-based skills that do not become obsolete

Striving for and achieving these goals, the peer councils tap into the whole intelligence and talent latent within the organization, giving it strength over any rank-based rival. In my consulting practice helping develop peer councils, I discovered four key peer councils that can be chartered to leverage the competitive advantage of our organizations. These councils are related to key areas of organizational decision-making:

• Vision

• Performance

• Results

• Culture

Vision: Strategy Council

The vision of the organization is manifested by the strategic direction decided by those with a thoughtful eye on the business horizon. The foundation of competitive strategy is aligning an organization’s strategic capabilities with the present and future needs and wants of both current and hoped-for customers.

One key to establishing this strategic direction is to have your strategy council answer the following questions:

• What does this organization want to be?

• Who are our customers and what do they need and want?

• How do their needs and wants match up with our shared values and greatest strengths as an organization?

• What can we do better than any one else?

• What products and services will we contribute to our customers’ needs and wants?

The strategy council constantly reviews the organization’s strategic capabilities, along with present and future customer needs and wants, in order to determine the best strategy to serve customers.

Performance: Tactical Council

After determining strategic direction, an organization must focus its energy to engage rivals in the “intelligent clash of wills” in serving customers. Marshalling the people and resources to meet and defeat competitors through superior performance while creating value for customers is referred to as tactics. It is bringing the organization’s strategic vision into clear focus in the present. It requires transparency and full knowledge of how what each employee does contributes to strategic and tactical success.

One key to establishing performance success is to have your tactical council answer the following questions:

• How will we achieve success?

• How can we best design, produce and deliver those products and services to our customers?

• What are the key moments and activities in our delivery systems?

• What are the crucial skill sets we will need to be successful?

The tactical council keeps reviewing how best to engage both customers and competitors.

Results: Operations Council

Operations is where the rubber meets the road. It’s actually doing the work and generating results. However, in competition and interaction with others, nothing ever goes as planned! The best strategy and tactical plans break down; it’s inevitable. So, in the actual performance of an organization’s strategic and tactical plans, expect the unexpected. The key to operational effectiveness and success is constant review of business processes. The operational council constantly reviews how to do this more profitably. It also stays watchful for high-level ridiculousness, where reality and the opinions of senior management grow apart.

The operations council can accomplish this by asking these questions:

• How can we improve customer and employee satisfaction?

• Where can we increase revenue without sacrificing customer satisfaction?

• Where can we decrease costs without sacrificing employee satisfaction?

Everyone in the organization needs to have permission and opportunity to talk to anyone else in the organization. The operations council can ensure that this happens.

Culture: Values Council

For any organization to be successful in the long run, it must be aligned with the basic desires and values of all individuals who have a stake in the life of the organization, and it must create a culture that values people. These are not only customers and equity owners, but all employees, suppliers and vendors.

One key to establishing a meaningful culture is to have your values council answer the following questions:

• Who are we?

• What basic values and desires motivate and inspire each of us individually?

• What common shared values and desires do we possess?

The values council constantly reviews how best to develop, reward and compensate the organization’s people, with individual and shared values and desires in mind."

More Information

Compare Rank-Based Management to Peer-Based Management

See Prof. Niesen's proposals on Peer-Based Compensation

Recommended Book: The Myth of Leadership