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To have meaningful work that enables our independence and to live with dignity should be a basic human right

Month: June, 2014

Does a knowledge worker need a knowledge manager?

Here’s a thought: in a matter of years, the worker and the manager positions will be reversed in the organisational hierarchy.

There are three parts to the economics of pay and hierarchy:

1. Control of assets.

Workers have little control and authority over assets and are paid to ‘just work’.  At the low end, managers are given some control over the assets used in daily operations including stock and rosters.  Each promotion and pay rise recognises the expanding scope of assets under the manager’s control.  At the extreme high level is the CEO salary such as Charif Souki, CEO of Cheniere Energy who, according to Bloomberg, tops the list in 2014 with his $142 million salary package.

2. Contribution to results

The greater a person contributes to results, the higher the reward, such as the sales manager whose efforts directly impact the bottom line.  On the other hand, the human resources manager at the same level manages workforce costs and is generally less well rewarded.

3. Demand

As the law of supply and demand dictates, the more available or replaceable the skill or ability, the lower the pay.

In the industrial economy the hierarchical model was straightforward.  Because managers controlled more assets including the people who provided the labour, they command a higher position in the hierarchy and were paid more commensurate with that level of seniority.

Ricky Gervais in The Office

Everyone’s favourite nightmare manager, David Brent, played by Ricky Gervais

The dominance of the knowledge worker since the 1990s has been effecting a significant change for enterprises which could drastically alter how the manager position fits in the organisation.

In 1966, management guru, Peter Drucker, had already envisaged the knowledge worker disrupting the standard order of progression from worker to manager.  He wrote, “Every knowledge worker in the modern organization is an “executive” if, by virtue of his position or knowledge, he is responsible for a contribution that materially affects the capacity of the organization to perform and to obtain results.” (The Effective Executive 1966).

Wealth creation in the industrial economy came from the control of physical assets.  Industries such as mining, manufacturing and agriculture created the list of the wealthiest countries and companies.  As the knowledge economy’s growth accelerated in the 1990s, spurred on with the widespread adoption of the internet and technology, the value of enterprises has been changing in a way that most organisations are yet to fully realise.

Assets

Physical assets are owned by the enterprise, even physical labour which a company has bought the right to control through the employment contract.  The above chart shows how significantly this has changed.  While companies continue to promote and remunerate managers for their ability to control the enterprise’s assets, the majority of the company’s value is no longer in those assets.

Intangible assets are a product of knowledge work.  They include such things as brands, organisational culture, core competences, customer relationships, designs and inventions.  The fundamental difference with knowledge work is the assets do not belong to the enterprise therefore managers cannot control the greatest contribution to the company’s value.

Companies no longer need managers to sit over workers because the company does not own the knowledge.  Whether the ‘knowledge’ is a contact in the government, the knack for spotting the next big fashion trend, the ability to close a sale, or a manner that brings a team together, it will always belong to the person that provides it.  The company that maximises the value of its intangible assets will be the one that has an infrastructure developed to lease the knowledge it needs from the owners, such as through freelancing assignments, strategic alliances or employment systems that tap into the knowledge it needs when it needs it.

Taking Apple for example, a company valued at $400 billion of which intangible assets account for 96 per cent, and one of the most successful companies in history.  Innovation, design and a commitment to placing technology into the hands of people, is how the company achieved such an outstanding result.  It was not achieved through managers installed to keep the knowledge coming, checking whether the ideas were meeting KPI targets so that another market-changing concept like an iPad would emerge by the deadline set by the business plan.

So whatever managers do now, it must be something more than overseeing workers like pickers and packers, who process the company’s physical assets (and even these are being increasingly automated).  It must be something that enhances the organisation as far richer places than a collection of workers mechanically completing tasks.  A bright future would be one where the richness of people collaborating, creating and doing is allowed to happen without the oppression of pre-determined positions monitored by people who are there to manage actuality rather than possibility.  Otherwise in this world the prospect of being given a manager job might be one seen as a demotion.

Fairness – working it well

This week in the second part of our look at fairness, guest writer Geoff Callard, discusses how workplaces can be more fair.

 

For our primitive ancestors, fairness was a matter of survival.  Fairness ensured that members of the community would cooperate and share resources, especially during times of scarcity. It doesn’t take too much imagination to understand how important the concept of sharing scant resources is from an evolutionary perspective and how important it is to detect ‘cheaters’; those who promise to share but do not deliver.  In fact Stephen Pinker in the book ‘How the Mind Works’ thinks that our fairness response comes from our need to trade fairly.

While the way we live has changed dramatically, our human brains are still hardwired to respond positively to fairness and defend against unfairness. Whether we perceive we are dealt with fairly or not drives us very rapidly to treating people as friend or foe. In the modern workplace a perception of fairness will lead to cooperation and collaboration, allowing us to work together and be innovative and creative. A lack of fairness drives us quickly in to hyper-arousal, defensiveness and suspicion.  It reinforces a silo mentality where tribes are quickly formed to defend against perceived enemies.

We are at a time when there is intense interest in the health of the workplace.  There is not only evidence that an unhealthy workplace costs in employee absenteeism, turnover and disengagement, but there are also the risks of worker insurance claims and potential legal action against employer negligence.  Issues of lack of autonomy and loss of control are bound up with unfair treatment and the health impacts can be both traumatic AND without the clear types of tell-tale symptoms of other health conditions, hard to quantify and manage. This is where issues of workplace stress, anxiety and depression come to the fore.

These are three characteristics – scarcity, individual job focus and invisibility – that enable organisations to actively create and perpetuate workplaces that are inherently unfair.

1.       Scarcity

There is a distinctive ‘unfairness’ psychology that can develop in people who experience scarcity of resources.  Many workplaces deliberately create a ‘scarcity mindset’ in the short-sighted belief that it will encourage frugal (cost-cutting) behaviour, even when it is detrimental to the individual, for example, the company that publicly trumpets a constant rise in their share price while at the same time relentlessly pushing cost-saving measures on to its workers..  It sends a confusing message to workers that triggers a survival mode in which they must prepare for the workplace equivalent of drought and starvation.

Through poorly executed cost-cutting and disproportionate focus on insignificant measures of ‘improvement’ these companies make even the most basic amenities and facilities difficult to access through, for example, overly-bureaucratic and/or inadequate requisitioning processes.  Workers learn their survival depends on their ability to ‘hoard’ – knowledge, expertise, equipment, ideas, and so on.  These would be bad enough if one only looked at employee’s reactions to the inherent unfairness, but contriving the environment to exploit worker behaviour drives other highly dysfunctional behaviours.

Scarcity increases stress and anxiety and studies show that the scarcity mindset affects intelligence and the ability to make decisions that are good for us.  This is often seen in the many unpaid overtime hours that low-level (i.e. minimally-paid) managers put in to work.  Like the debt-laden person who goes on a reckless shopping spree, these managers make their position worse, as the more hours they work the lower their hourly rate drops, then the more stressed they are and the more out of kilter becomes their perception and reality of a healthy work/life balance.

As people become slower-witted and weaker-willed the scarcity mindset becomes entrenched, and they are unable to take the very actions that will improve their and their organisation’s position.  Rather than see the psychological damage being caused to individuals and the cost of an unhealthy workplace culture, these companies feel entitled to the gains they have made at people’s expense.

2.       Individual job focus/lack of inclusivity

Many, if not most, workplaces still labour under the illusion that the path to greater productivity is through a win/lose relationship with workers.  A worker that ‘wins’ a pay rise, for instance, causes a ‘loss’ to the company – one that the company will want to ‘win’ back somewhere.  The organisational approach to ensure the company ‘wins’ is to create an exclusive environment, that is, one that lacks inclusiveness.

Systems such as ‘targeted’ selection, job descriptions and competency-based assessment are specifically designed to enable the company to exclude people in a way that appears fair and therefore socially, ethically and legally acceptable.  Because the ‘exclusion factors’ are more important than the ‘inclusion factors’, i.e. the criteria are used to identify how people may be excluded not how they could be included, they promote an environment in which unfairness can thrive.

An experiment was conducted where three people – as avatars – played a computer game in which a ball was tossed between all three.  Halfway through, two of the participants began to toss the ball between themselves, excluding the third.  Excluded players registered high levels of activity in the area of the brain  that responds to pain.  The brain creates a fear response to exclusion that can cause a whole range of reactions, the human equivalent of an animal baring its teeth just wanting to ‘get out’.  In the workplace the fear response can manifest in ways such as passive-aggressive behaviour, departmental rivalry or office politics.  Status plays a huge role here and managers can easily create cliques that exclude those who don’t quite ‘fit’.

On the other hand, being treated fairly and inclusively means people have much greater capacity for thinking, planning and collaborating.

3.       Invisibility

It is not just that there are no immediate symptoms of unfairness, many workplace systems are designed to normalise unfairness, so that effectively unfairness gets to hide in plain sight.  Hiring practices are inherently unfair because they do not allow any person that can perform certain job requirements equal access to the job.  They are designed to filter out all but a select group of people such as those that are already working, those that are unencumbered by carer responsibilities, those that are native speakers of the local language, for instance.  The same goes for people selected for redundancies.

The thing that is most interesting about unfairness in the workplace is that unfair practices are meted out by people – people who are as susceptible to the pain of unfairness as the next person.  We humans seem to readily develop a blindness to empathy and remove the human element out of the equation – perhaps as a defence to being subjected to unfair treatment. It is a frequent criticism of ‘Human Resources’ that the ‘people’ function of the organisation is often characterised by its focus on policy and programs rather than empathy and genuine flexibility.

However unfairness does not have to be the ‘default position’ for organisations.

Look at ‘Valve Corporation’, the video game company who made the news when its employee handbook surfaced.  In this they say; “We’ve been boss-free since 1996.  Imagine working with super smart, super talented colleagues in a free-wheeling, innovative environment – no bosses, no middle management, no bureaucracy.  Just highly motivated peers coming together to make cool stuff. It’s amazing what creative people can come up with when there’s nobody there telling them what to do”. 

Or the case of Bob Chapman, who ran a large manufacturing company in the Midwest USA called Barry-Wehmiller, described by Simon Sinek in his recent TED Talk:

“In 2008 Barry-Wehmiller lost 30 percent of its orders overnight, and needed to save 10 million dollars, so, like so many companies today, the board got together and discussed layoffs. Bob refused. You see, Bob didn’t believe in head counts. Bob believed in heart counts, and it’s much more difficult to simply reduce the heart count. So they came up with a furlough program. Every employee, from secretary to CEO, was required to take four weeks of unpaid vacation. They could take it any time they wanted, and they did not have to take it consecutively. But it was how Bob announced the program that mattered so much. He said, it’s better that we should all suffer a little than any of us should have to suffer a lot. Morale actually went up, they saved 20 million dollars, and most unexpectedly and quite spontaneously people started trading with each other. Those who could afford it more would trade with those who could afford it less. People would take five weeks so that somebody else only had to take three.”

It seems when people feel safe and protected by the leadership in the organization and there is an explicit message of fairness backed up by action, the natural reaction is to trust and cooperate.

 

Making ‘People’ Work thanks Geoff for his two-part series on fairness.  I hope you enjoyed them as much as I did.

Connect with Geoff on Linkedin.

Fairness – it’s all in your head

This week’s post comes courtesy of guest writer, Geoff Callard.

 

I recently worked on a large IT implementation project with a team including a hand selected group of ‘Subject Matter Experts’.  These were eight of the organisation’s young stars – selected as part of their career development path.

Within two months of the project ending, five of the eight had left the organisation.

Why?  Predominantly because their sense of fairness had been violated by the organisation’s inability to keep to its promise; of the eight, six had been returned to jobs that were much the same as those they had left to join the project, despite two years of taking on significant responsibility and developing their skills and experience.

This is just one example of how organisations (often unwittingly) betray their people’s sense of fairness. In fact issues of fairness are pervasive and can be triggered by many things including a perceived inequality of treatment, lack of respect, lack of consultation, work not being recognised, unwillingness to help with special circumstances or apparent low concern about employee well-being.

What does Brain Research Tell Us About Fairness?

In an experiment by Golnaz Tabibnia and M.D. Liebermann at the University of California, participants were split into pairs and given money. One participant was given the responsibility for dividing the money (e.g. 50/50, 60/40 and so on); the other could choose to accept or reject the split depending on whether they thought it fair or not. If the offer was rejected the participants would receive nothing.

Rejecting the offer occurred more frequently as the split became less, well … fair. Why? It seems our brains are wired for fairness and we would rather no one benefit if both people can’t be treated fairly.  In this experiment and many others like it, the reward centre in the brain (the striatum) will light up more when the offer is fair even when no additional money will be gained.  On the other hand unfairness activates the anterior insula, the part of the brain associated with feelings of disgust.

The research also suggests that the neural mapping for fairness is similar to that of the more ‘primary circuits’ in the brain for things like food and sex.

In a twist to this experiment, participants at the California Institute of Technology took part in a simulation in which they were asked to distribute food to a group of orphans in Uganda. (As a sidebar they actually did raise thousands of dollars from the research).

When they were able to give food to the children, the study participants’ orbital frontal cortex, the reward region of the brain, lit up. When instead they had to take food away, the insula region was activated.

Steven Quartz the author of that study suggests, “…the emotional response to unfairness pushes people from extreme inequity and drives them to be fair”.  This observation, he adds, suggests that “our basic impulse to be fair isn’t a complicated thing that we learn.”

In yet another study variation ‘rich players’ were asked to distribute money as they saw fit to ‘poor players’.  The brain activity of ‘rich’ players indicated they preferred to close the monetary gap, while the ‘poor’ players seemed to prefer transfers that boosted them up toward the other players’ monetary level.

“Overall, it looks like these regions were responding most when the outcome would be the most fair, and the least when the outcome would be the least fair,” said the author of the study, Elizabeth Tricomi, a professor of psychology at Rutgers University in New Jersey.

It seems even animals have a rudimentary preference for fairness.  In one of Frans de Waal’s experiments Capuchin monkeys reject being ‘paid’ with cucumber when they see another monkey paid in grapes.  Take a look at the YouTube clip; the rejection is a wonder to behold.

The experiment has been replicated many times.  In a Nova Science YouTube clip: ‘Do Animals have morals’, Peggy Mason, a neuroscientist at the University of Chicago, demonstrates one rat setting another free so they can share a snack of chocolate chips.

What are the Implications?

Issues around fairness can cause emotions to run high; whether its trigger is political (look at reactions to the 2014 Australian federal budget); or more personal (our reaction to when someone wants to cut into OUR lane during peak hour traffic).

David Rock in his wonderful book ‘Your Brain at Work‘ warns that we often underestimate the importance of fairness and can be blindsided by the intensity of our response to unfairness.

He confirms that perceiving unfairness generates intense arousal in the limbic system which essentially tracks your emotional relationship to thoughts, objects and people.  It reacts to unfairness the way it does to a primary threat and impairs your ability, basically, to think straight.  Accidental connections, for example, become easier, causing you to misread someone’s intent leading to an altered perception of events in turn leading to a rapid downward spiral.

On the other hand fairness is rewarding. The human brain responds to being treated fairly in the same way as it responds to winning money and eating chocolate.  Being treated fairly turns on the brain’s reward circuitry and is connected in the brain to relatedness and increased trust.  It makes you more open to ideas and more willing to connect, creating a great state for collaboration.

Tabibnia and Liebermann suggest that social reinforcers like fair treatment are more likely to increase intrinsic motivation, which predict better job performance and satisfaction.

So, if the desire for fairness is in fact a fundamental driver for humans what does this mean for the way organisations are structured?  If our reaction to unfairness is so strong and has such a limiting effect on our ability to reason, connect and perceive, then what are we building in to our culture and infrastructure to help ensure fairness in all our dealings with staff, customers and suppliers?  How much impact does a perception of fairness have on customer satisfaction, for example?

How much do we expect fairness in our dealings?  Are we really transparent in how we work?  Are we still playing favourites and being sucked in to office politics?  As leaders, how accessible are we? Do we, for example, give credit generously?  How fair are our systems and processes?  Is evaluating performance a few times a year ensuring fairness?

Scott Halford, author of ‘Be a Shortcut’ says, “There are exceptions to the fairness rule.  Some people are numb to its effects no matter how fairly you play.  They are the exceptions and you may need to play hardball with them, but it’s doubtful that you’ll feel good about it afterwards.  Practice playing by the fairness rules and most of the time you will win — and so will they.  Fair enough?”

 

Connect with Geoff Callard on LinkedIn.

Some things change; some things never change: future work imagined

future

Fast forward fifteen years from 2014.  The robot has not completely taken over but they and automation have definitely changed the landscape of work.   This post is not meant to be a crystal ball into our future world; rather it attempts to extend what we already see happening in work and imagines the movement of these practices from the fringes of ‘innovative workplaces’ to the mainstream.  Being a worker in this future world might look something like this…

Tish wakes up to the alarm she set so she can make it to her department meeting.  It’s been a while since she has attended one because she has been on the ‘bench’ of her company for the past few months.  As the company needs different skills it changes the work group members to suit.  “I hope there are some new people to meet,” she thinks as she waits for her computer to start.  As the staff arrive for the meeting, Tish scans the map that appears on one of the screens in front of her.  She sees attendees joining from several countries including China.  “Great!” she says to herself, “I need to practice my Mandarin!”  Tish has been studying Mandarin through online videos for three years.  She uses a combination of the course available from one of the US’s leading universities which give proper structure to her progress but she also likes the YouTube videos that give her a better sense of the colloquialisms used by present-day speakers.  Unlike the university videos many of the YouTube ones are hilarious.

After the meeting, Tish plays with the idea of contacting her Mandarin learning leader but she knows it is more important that she spends time with her Business Ethics learning leader as she needs this to finish the tasks in her current contract.  This course also gives Tish credits towards her professional status for which she has been studying.  According to Tish’s mum ‘studying’ used to mean reading books, writing about the things you would be doing and then sitting an exam to see if you can describe how they should be done.

Before Tish gets ready to go to work, she checks her clearing account.  Last month she earned money through four different sources (she is amazed that the online business she started while at high school is still paying – it’s only a tiny amount but, then again it was seven years ago and she was only fifteen).  Her clearing account already has her earnings sorted into her net pay, remitted her income tax and topped up her pension account.

Tish walks to work at her ‘third office’.  The coworking space is where she meets with some of the team on the community project her company sponsors.  The community project is more than an industry collaboration, it also serves as a development program for young people leaving school.  Her manager has been encouraging Tish to improve her coaching skills so this program came up at a good time.  Although they are working on testing one of their competitors products, it is a product that her employer does not sell and for a market her employer does not service.  Tish loves these community projects because it has given her the opportunity to practice new skills and learn from people who have more experience than even her own manager.

During a break, Tish wanders over to an open session being held by the coworking host looking at the style of a renowned designer.  Artists have been ‘safe’ jobs since robots began dominating industry.  Manufacturers using licensed art and design work to apply to their goods has become the norm.  Even though Tish does not have an artistic bone in her body, she still finds herself contributing her opinion on some of the designs discussed.  She strikes up a conversation with the person sitting next to her – someone who obviously does know a lot about design – and is delighted to learn that he is a freelancer who can help her organise and upgrade her online professional portfolio.  She takes a scan of his freelance profile and promises to submit her brief to him in the next week.

Tish wraps up her session and waits for a friend coming to meet her.  They first met at work and discovered a common interest in driving.  Almost no one drives on the roads anymore as driverless cars are faster, cheaper and easier to use.  Tish had already qualified for her probationary driver’s license when nearly all vehicles switched over to automated technology.  Her brief time as a driver gave her the bug so she joined a car club with her workmate where she can drive recreationally.  Today she might try the mountain track again.

Before her day ends Tish has one more task she needs to complete.  She spends the next hour working on the peer reviews she has promised to submit.  She does the easy one first – this was for her last project leader who achieved the great result of coming in on time and under budget.  The next one is trickier.  Unfortunately this team member made a lot of mistakes but worse, would not take suggestions to fix them never mind how he could have avoided them in the first place.  Tish accesses her company’s knowledge bank and follows the guidelines for giving difficult feedback.  Finally she is satisfied that she has met the required standards of honesty, practicality, transparency and context.

Although this task took longer than Tish had planned she is really pleased with the outcome and decides it is worth a few minutes to share the experience with her followers.  Unlike a lot of her friends, Tish did not care for sharing every detail about her life on social media, but the social mentoring platform was different.  Among her mentoring followers are people from emerging industrial economies and students.  However Tish gets the most satisfaction from her followers who are people who entered the workforce during the industrial age and who became underemployed through the old ‘one job’, ‘one employer’ paradigm.  They also missed the shift that they, not their employer, were now responsible for maintaining their professional knowledge and skill assets.

The last of her jobs completed, Tish is looking forward to the end of the seven-day, 10-hour days stretch of work that she planned for herself.  She can now have that five-day break to attend her friend’s wedding.  Tish is excited because it will be her first overseas trip without at least one of her parents.  Instead of wedding gifts, the guests are going to work for two days as volunteers with the charity her friend supports.  With the whole village attending the wedding after the two days, it will also be the biggest wedding Tish has ever attended.  Tish lies in bed wondering what she would do for her wedding one day.  Her last thought before drifting off to sleep is whether she would have a retro wedding where the guests just turn up for a ceremony then eat and drink at the reception.

Tish is, of course, a character from the Millennial generation.  Based on this narrative she would have been born in 2007.  For Tish this world of work is not new or different.  There is nothing described here that is not already changing employment as we currently understand it.

  • Virtual teams are already the norm for many industries, but now ‘traditional’ work including surgery, manufacturing and warfare, are being performed remotely by dispersed co-workers.
  • Leading universities including Stanford and Harvard already offer courses free online.  All MIT courses are now open and free.  As far back as 2007, futurist Thomas Frey was describing the shift of expertise online where teachers would no longer act as topic experts but coaches and guides.  Today coaching is the second fastest growing industry in the world behind IT.
  • Management thinker and author, Charles Handy, had proposed the concept of ‘portfolio careers’ in the mid-1980s.  As work fragmented, choices other than ‘having a full- or part-time job’ or ‘not working’ were becoming mainstream.  Today’s younger generation have been encouraged to follow many courses of interest in their early years as we encourage them into sports, arts, hobbies, community activities and other interests.  They are simply continuing this into their professional lives – which is fortunate given how work is becoming more a series of projects than labour carried out along a predefined continuum.
  • Innovators and start-ups are coming up with new ways to make process-driven activities easier on a daily basis.  The technology to aggregate personal income can now probably be programmed by a high school student.  Government policy and economic infrastructure must move ahead of the potential for us to be more productive as a nation.  Worryingly few governments seem to have anything even closely resembling a plan that will maximise the potential of more people working at fuller capacity.  Instead they sit fiddling with unions while Rome burns.
  • Coworking spaces are growing at an ever-faster rate.  Start-ups are no longer the only users as large companies realise it is cheaper to reduce their office footprint and support their staff in spaces that offer convenience and the opportunity to interact with a broad range of people.  A recent Deskmag report found that 71% of workers in coworking spaces believed they were more creative, 70% feel healthier and 62% report improved work output.

We have spent the past 100 years mechanising work and in the process have created whole generations that are prepared to submit themselves to, while civilised, no less inhumane conditions where compromising family needs, over-regulated work practices, relentless demands, goals and targets that bear little resemblance to the benefits the workers are supposed to be enjoying (career, progress, satisfaction, etc.), has become not just accepted, but expected.

The younger generation are being brought up by parents who tell them personal fulfilment is their right but with it comes responsibilities to society, to those less fortunate and to the environment.  They are highly confident, highly social and unlike their parents need reasons for not changing more than they need reasons to change.

We have a great intersection of opportunity before us: the automation that will remove the inhuman part of work and a new generation of workers that can clearly distinguish work that is uniquely human.  We have very little time to take advantage of this window of opportunity.  Unless we stop training our young for careers that depend on jobs that will soon no longer exist we will soon have an enormous problem of too many workers with the wrong skills.

The only guarantee I can see that we can solve our future mass unemployment problem is to fix it now.  Today.
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