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

Corporate Achilles heel: why strengths can be the problem with performance

The longer the organisational practice of managing strengths and weaknesses as the basis of performance is allowed to go on, the more we will see what had appeared to be healthy, robust companies, being brought down.  Not unlike steroid use, there will be a point where trying to increase strength will have a detrimental effect on the person’s overall health.

When we refer to strengths we mean something desired.  Weaknesses are something to be humbly addressed; they are identified for the good reason that they can then be eradicated.  Put these together and it is clear that the path to corporate performance is through managing the dichotomy of strengths and weaknesses.

This being the purpose of an organisation is so soundly entrenched that it is never questioned.  Nothing in the system suggests that there is such thing as a limit or a point where there is ‘too much’.  New material continuously fills our inboxes, social media posts and anywhere else we accept teachings on how to manage these days, explaining how to accomplish more strength more quickly, more accurately and more decisively.  As organisations become more complex, harder to manage and competition increases, the more determinedly companies go about lauding strengths and correcting weaknesses, putting everyone on notice that there should be no doubt about what it is the company desires and will reward.

The ‘strengths’ equals ‘winner’, and ‘weaknesses’ equals ‘corrective action required’ mindset – regardless of how this is packaged – is far too simple.  Their contribution to success is only true to a certain point, and can never be seen as a complete solution.  What we fail to recognise is not just that there are limitations, but that unchecked, the practice becomes a hazard.

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The singularity of the strength/weakness mentality blinds us to the contexts in which we have decided which attributes are strengths and which are weaknesses.  When we are presented with a job application in which personal strengths are boldly declared, instead of alarm bells sounding we conclude that these are the key contributors to how well the candidate will ‘fit’ into the company and the position.

Typically, for example, we appreciate high levels of education, good social standing, the ability to inspire respect, specialised knowledge, and professional scepticism (a questioning, analytical approach) as positive attributes.  We keenly encourage the development of these strengths by including them as criteria for hiring, promotion and salary increases.  Yet these are the same attributes that are the common characteristics found in people guilty of white-collar crime.

When we condition people to think about performance in isolation from the environment, it creates a situation in which the individual’s orientation to the self takes precedence.  The culture and social norms become the servant to the individual’s perspective.  In cases of corporate fraud, for instance, it is not unusual for the perpetrators to see no conflict between their actions and their identity as a good person.  Seventeen people were charged and 16 convicted (the 17th, Kenneth Lay passed away) following the Enron scandal in 2001.  Each of them had difficulty accepting that they had acted wrongly.  In the microcosm of their roles in the company, they believed their actions were necessary for the organisation’s survival.

Far less dramatically, but no less damaging are those corporate leaders who slowly take their companies down the path to incompetence because their strengths lose their potency as the business environment changes.  Despite the company’s evolving needs, and even if they apply new tactics, they never question the validity of their ‘strengths’.  Perhaps if they had not so assiduously eliminated, hidden or overcome their ‘weaknesses’, they may find in these the right response for their present circumstances.  Perhaps yesterday’s sluggish response or old-school methods are today’s cautiousness or traditional approach and exactly what the company needs at this time.

Failed strategy can often be traced back to a faulty SWOT (strength, weaknesses, opportunities, threats) analysis, and change programs often fail having fallen victim to leaders who undertake the change process in a way that suits their strengths.

The sociologist Robert K. Merton proposed that emphasising goal achievement of the individual, neutralises the effectiveness of the environment to inform behaviour.  In the case of fraud, the social structure and norms that should have operated to control the motivations towards misconduct, lose their power producing a state of ‘anomie’, meaning absence of moral guidelines.  In this state, rationalisation is deluded rather than deliberate.

The strengths/weaknesses focus builds a competitive mindset and one that intentionally exerts pressure on individuals to perform.  In this environment, some personalities will shift quickly from the satisfaction of achievement to the thrill of the win.  Others will not cope with the pressure of constantly living up to their strong self.  Yet others, particularly with overwork, will lack the mental clarity to see the totality of their behaviour – a little like, while watching your every step you do not notice you are heading in the wrong direction.

Instead of looking at attributes as strengths or weaknesses, we should pay more attention to the lens through which we view them.  If the organisational context plays a greater part in our evaluation of performance, we will be better at identifying, from the broadest possible perspective, the particular attributes that contributed to particular outcomes.  Strengths, we should be aware, are not an absolute and therefore cannot be managed as though they are a certain predictor of corporate success.

 

Making organisations work: Part 2

Perhaps because my first tertiary qualification was in marketing, one question about working in organisation development has continued to nag at me over the years.  If the organisation is the most significant contributor to business success then why are the professionals who design, develop and manage them, and those who manage the people who make them up, so poor at articulating their business impacts?

Instead of quantifying their results, they quantify the people who provide them.  Instead of using real measures (financial performance) we demonstrate our value using ‘indicators’.  With knowledge workers, the task of measuring personal performance has become impossible, so they create measures for inputs (such as initiative) that do not necessarily link to the desired outputs.  The equivalent would be HR using the revs of the engine to measure speed while finance uses the speedometer.

Patrick Lencioni in his 2012 book, The Advantage: Why Organizational Health Trumps Everything Else in Business, argued that companies that are consistent and complete will outperform their competitors.  The question of the role of the organisation in the success of the business has been the topic of years of research by McKinsey & Company, who share their findings in articles such as, Organizational health: the ultimate competitive advantage, and The hidden value of organizational health – and how to capture it.  In these studies a clear relationship is drawn between the qualitative aspects of management and above-average financial performance.  The question is, why do we persist with measuring things that should not or cannot properly be measured and baulk at using the measures that matter?

Maybe the answer is as simple as the need to justify our existence.  Shareholders and boards want results they can see.  If we do not know how to link our work to financial outcomes, we need to find some other way to justify our activities.  These become our organisational performance indicators.  A consulting firm based in Europe has identified that there are 29 organisational key performance indicators (KPIs) to monitor organisational performance, but do not go on to connect their relationship with corporate performance, such as earnings per share or EBITDA.

“The fundamental paradox of any corporation is that even though it competes in the marketplace, it uses nonmarket instruments – plans, commands, controls – to accomplish goals,” is how James Surowiecki explained it in his 2004 book, The Wisdom of Crowds: Why the Many are Smarter than the Few.  The irony is because the connection between organisational management and business results cannot be shown on a spreadsheet, we identify measure that can be shown but do not necessarily link to the business results.

How do we improve our ability to connect the work we do to improve organisational quality to long-term financial performance?  It’s a well-established truism that we do what we measure, so measuring KPIs that do not statistically link to business results may look good but wastes time and can be harmful.  Measuring payroll increase, for instance, is fruitless if it means we have lost experience and company intelligence to lower skills and less experience.

It has taken me twenty years of working with clients to see that – at least part of – the problem is there are no good models or frameworks that help us to direct and measure our efforts effectively.  Several years of thinking and developing later, I have created a model that may help connect work – not just the physical components – to results.

A changed approach begins with how success is achieved in the market – alignment of your customers with your brand promise, and the ability for demand to meet supply.  Typical measures of these activities would be operating profits or EBIT (earnings before interest and tax).

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At the core of alignment is consistency in values.  This means the answers to these questions are never in conflict, no matter which part of the business they are applied to:

1. What does the organisation value? purpose, mission, values, performance, culture, etc.

2. How does it value others? employees, supplier agreements, fairness, reward, remuneration, etc.

3. How does it offer real value through what we deliver? products, service, experience, brand, etc.

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Aligning business activities with values ensures the business delivers consistent results and this is reflected in measures such as the balance sheet and company’s book value.

The organisation connects people to the business.  We who manage organisations are responsible for optimising outcomes for the business and the people engaged in its enterprise.

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This link between the business and the organisation looks like this:

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We develop and manage:

  • The strategy to set the direction and aspirations of the business
  • The structure of the organisation needed to deliver on the strategy
  • The systems that are needed for the business to operate

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The Total Business Value or Market Capitalised Value is the sum the business would realise if it was on the market.  Most companies’ Total Market Value today is close to 80 per cent intangible assets and 20 per cent physical assets.  The S&P 500 currently values it at 88 per cent intangible assets and 12 per cent physical assets.

All intangible assets are produced by the organisation.  They are either ‘products of the mind’ (intellectual property, market research), or ‘products of the people’ (such as know-how, relationships and reputation).  Management of organisations, therefore, is responsible for the production and utilisation of the company’s intangible assets.

The model now shows the activities the organisation carries out on behalf of the business to grow the value of the company’s intangible assets:

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We develop the IAV (intangible asset value) further through:

  • A culture in which the desired norms and behaviours benefit the business
  • Performance that leads to outcomes for business and people
  • Business core competencies that become its strategic advantage

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IAV is difficult to measure, however as we move further away from the industrial economy into a value economy, we need be letting go of outdated priorities.  The assumption today, in the same vein as ‘careful what you wish for – you might get it’, is careful what we measure.  We need to remember that KPIs are only that – indicators – they are not measures of performance.  We need to get used to longer term measures based on numerous sources of value generation within and from outside the business.  Many diverse sources of value generation is only possible when the organisation lets go of its 1900s approach of homogeneity and reductionism.  Standardisation should only apply to process, not to people, not to to jobs, and as technology-facilitated personalisation becomes cheaper, not even to product and service.

The businesses that are serious about their sustainable profitability and growth will need to move on from quantifying inputs and outputs so that the activities that lead to quantifiable outcomes can be achieved.  When the majority of these are produced through the organisation creating intangible asset value, it makes it clearer where we should be concentrating our efforts and how we become more accountable to the business’s results.

Making organisations work

The decision I made to set up a company ten years ago did not entail much deliberation.  It was prompted by little more than not being able to think of a job I wanted to pursue in the work I thought I was good at.  The only thing that I spent time thinking about was the business name.  ‘Meta management’ is a management term that means the management of management to achieve overarching goals.  It is the opposite of ‘suboptimisation’, the process of achieving the goals of a division or component.  Even the most junior employee of any large organisation can tell you that optimised parts do not make up an optimised whole.  When each department has to achieve its own goals, it inevitably comes at a cost to the whole.

My experience was that most performance problems could be resolved through a systems thinking (very simply defined as “two or more parts that work together to accomplish a shared aim”) approach,  ‘Meta Management’ seemed to be the perfect name to describe my new venture.  All I needed to do was to find companies that wanted their problems solved from an organisational rather than divisional, individual or symptomatic perspective.

However, over the years I was increasingly disturbed by our (perhaps subconscious) response to what needs to be acknowledged as our lack of ability.  For all the brilliance of people like Peter Drucker, Henry Mintzberg, Warren Bennis, Rosabeth Moss Kanter and Michael Porter, and the simplicity with which their and others’ matrices, frameworks and models help us to lay out and figure out complex organisational problems, we at the ‘doing’ level, are lost  Knowing what we want to achieve is not translating into knowing how.

Not knowing how is a large part of the reason we persist in using programs and practices (such as these) that do not deliver as they claim, but look as though we are making a difference to the business bottom line.  Our choice has been to limit our focus so that we work in a narrowly defined version of the organisation rather than one that accurately encompasses the business and the people who work in it.  Although the central element of all businesses is financial we lack the understanding and the language of business and finance to quantify our contribution beyond the most basic.  As the Society for Human Resources noted in The Future of the HR Profession, “the only real metric HR has established to measure its work is cost-cutting.”  Unable to quantify the outcomes of our work, instead we quantify the people who do the work.  The shrinking of the definition of the organisation to one that does not include the business and people in holistic ways is evident by the fact that most positions that hold the word ‘organisational’ in their title do not work on the organisation at all.  At best they work on programs that are implemented across the organisation.

On paper, we are upping the company’s collective talent, we are improving productivity and we are increasing worker retention.  Except we aren’t really.  What we are really doing is finding more sophisticated ways to reduce down or remove the people who bring the results down, allowing the numbers to look better.  We turn people into job descriptions because we can produce metrics on skills and outputs.  We turn people into competencies because we can link them to key performance indicators.

If we are prepared to be measured at the humanity level – and considering we make our living from the efforts of people – we should be, it is clear that in failing add real, measurable and sustainable value to business we also fail in our other priority: people.  The figures on disengagement – where in workplaces across the world the engaged are outnumbered by the disengaged at a ratio of 2 to 1 – tell us this is true.  The fact that workers who spend the bulk of their working years with one employer are now disadvantaged as job seekers tells us this is true.  The fact that those who are most likely to be unable to find meaningful work that pays enough for a decent living are predictable, tells us this is true.  We are producing organisational results by shifting the problem to individuals and communities.

The things we cannot easily measure, such as the effect of work on self-esteem, the extent to which we feel valued, our sense of identity and sense of being in control, do not have to be factored in.  This would make it more difficult to produce positive ‘human capital’ results.  The best of our profession fight for organisational practices that support these anyway, but the majority leave the ‘soft’ side of management up to the line managers.  We add these as measures to their jobs, not ours.  The organisational specialists are not meta-managers but have become as suboptimised as any other division in the business.

None of this means that companies should not be able to make decisions that maximise their bottom line.  The question is whether we are actually achieving the maximum bottom line results possible.  Perhaps it is the best we can do under our present processes.  It is not unlike the argument for recycling.  The cost of recycling, including operating costs, chemical waste and pollutants has long been argued to outweigh the benefits.  An estimate in California put the cost difference at $28 per tonne to landfill waste compared to $147 per tonne to recycle.  However this estimate was in 1995.  New processes enabled by greater automation have since brought down the costs to process recyclable waste.  The waste is not ‘recycled’, rather it is ‘upcycled’.  The change in consumer attitudes makes turning waste into new products commercially viable.

We now need to take the same approach with the management of organisations.  Like recycling, we too need a new approach so that the cost of sustainable business and people practices are far outweighed by the benefits.  Having one set of measures for sustainable business and people performance would be a good place to start.  The people over at The Relationship Economy think that would look like this:

 

The answer is as simple as building a new model.  It does not make sense that the organisation can effectively serve the business without properly understanding business, so a new model needs to be one that incorporates the wisdom of those like Drucker who have envisaged how great the organisation can be, with the practical demands of the business.

 

The ‘passion’ nonsense: why it does not predict success

There is no doubt that the internet has made it easier for people to access information to enhance their lives.  Predictably it also enables the faster spreading of nonsense presented as expert advice.  If you believe what you read you there is an undisputed key to success: passion.

Mills & Boon cover

Mills & Boon: an endless supply of bodice-ripping passion

Since when did ‘passion’, the word used to describe desire and lust, become an attribute for commercial or professional success?  A Google search of the phrase “passion leads to success” will give you 209 million – give or take a few hundred thousand – sites explaining how.  Undeniably, it is a compelling story: you loved something so much you willingly ‘went the extra mile’ until one day you were rewarded by success.  It naturally follows that if people attribute their success to their passion, it could be used as a predictor of success too.  By declaring your ‘passion’ for something you are making a statement that your performance is all but guaranteed.  If their authors were not so sincere, the résumés in which job seekers profess their passion would almost be comical.  In one example, a 19-year-old girl supplied an application for an entry-level position in which she managed to state no less than five drivers of her passion including a ‘passion’ for customer service and her ‘passionate’ desire to learn.

Claiming to advise people on how they use their passion to build success is really a free ride for many wannabe coaches and consultants.  You can give this advice with so much authority because who can prove that it wasn’t passion oil that turned the right wheels?  If someone ‘fails’ you can always make the case that they ‘weren’t passionate enough’.

What do the facts tell us?

  • Skills matter.  Failure occurs when a person cannot do something or does not have something needed.  A business needs cash flow, and no amount of love, passionate or otherwise, will pay the bills to keep you in business.  Whole nations have cringed at the singing performances of people whose passion took them to reality television show auditions.  If you cannot sing, you cannot sing, no matter how you feel about it.
  •  Skills can look like emotions.  Highly developed skills become automatic and instinctive.  Nobel Prize-winning author Daniel Kahneman describes in his book, Thinking, Fast and Slow, a human mind consisting of two systems.  System 1 houses our innate skills, while System 2 allocates attention to effortful mental activities.  System 1 not only kicks in when we know the right response, but often when we don’t.  System 1 will make a substitute heuristic (defined by Wikipedia as experience-based techniques for problem solving, learning, and discovery that gives a solution which is not guaranteed to be optimal) response available.  Because System 1 operates so responsively and instinctively it has all the hallmarks of emotion.  Add a dose of immediacy or urgency, and a person can easily  believe that it was ‘passion’ that guided their decision-making or overcame the obstacles to success.
  • Luck plays a huge part.  Like passion, luck can be hard to pin down, so when a person wishes to substitute, “I got lucky,” with “I was passionate,” who is to say it wasn’t true?  In a Forbes article, How to succeed, since success is random, Kare Anderson writes, “Two often intertwined instincts are our deep desire to understand why unexpected things happen, and to want control over the events that affect us or our business.  This leads to another mistaken notion, especially in business. We are eager to believe that the success of a company or individual is determined by what they are doing right.”  When what the person is doing looks like the same thing that everyone else is doing, the explanation needs something else, some personal quality – passion.
  • The strong feelings associated with passion result from the reactions of different regions in the brain.  It might feel as though we are driven to do something because we love it, but it is more likely that we love it because we were rewarded for doing it before.  For example, the mesolimbic pathway rewards new and novel stimuli with sensations of pleasure.  Our brain also draws on different areas to learn associations between certain patterns – like a special person’s voice or the coupling of red wine and chocolate – and rewards.

The ideas we have about passion could also be explained by the rope bridge effect.  In 1974, psychologists Donald Dutton and Arthur Aron conducted an experiment in which male subjects were asked to walk across one of two bridges.  Some crossed a standard footbridge and others walked a rope bridge swaying over a 230-foot drop.  At the end of the bridge an attractive female researcher approached the subjects asking them to complete a questionnaire.  Each interviewer would then hand the subject her telephone number with the offer to be available to help with any questions the subjects may have later.  After controlling for various conditions, such as with the use of a male interviewer, the results showed a significant correlation between the precariousness of the bridge crossing and the degree of sexual content in the responses and the likelihood that the subjects would call the interviewer.  The adrenaline rush triggered by excitement of the rope bridge walk was enough to stir up these subjects’ passions.

Our perceptions of passion which we think drives our actions, could in reality be how we attribute our reactions to the environments our work or business take us to; where there are plenty of novel stimuli, where we our days constantly test us as well as deliver us scores of tiny, and occasionally big, triumphs.

If this is all ‘passion’ for our business or work is all about, many would argue what difference does it make?  So what if it helps people feel better about their jobs or gets them over setbacks more quickly?  It would be the business version of the stone soup folk story (in which hungry travellers enter a village only to find none of the villagers is willing to offer them food.  The travellers take a pot and begin boiling a large stone.  They explain to the curious villagers that stone soup is delicious and if they would be kind enough to provide a few small ‘garnishes’ the travellers would happily share their soup as soon as it was ready.  Various vegetables and seasonings were provided and the hearty soup was enjoyed by all.)

It is not harmless when this advice convinces under-prepared and under-skilled people to make poor decisions.  Investing in a business or leaving a job to ‘follow your passion’ is irresponsible advice when luck and skill play far greater roles.  Teaching people that passion and success are cause and effect does give many people hope and confidence to try something they may not have otherwise.  The value of hope and confidence cannot be underestimated for those who want to make something different of their lives but it is not a technique any more than the laws of attraction promoted in the book, The Secret, is (otherwise there would be a MBA available in this too).

Perhaps our use of the word ‘passion’ has more to do with its original meaning to do with religious martyrdom: ‘pain; to suffer, submit’, hence ‘the passion of Christ’.  For many their passion was their sacrifice.

What should we do about the job problem?

Reporters, statisticians, economists and demographers are predicting the demise of jobs, millions of jobs. According to futurist Thomas Frey, 2 billion jobs will disappear by 2030. Whether you believe all the data or not it is clear that changes, mostly due to technology, in the structure of the labour market have already been significant. In Australia, across Europe and the US, the numbers of jobs lost during the GFC, for instance, have rebounded, however, mostly in lower, entry-level positions and high-level professional positions. The middle class jobs lost have stayed lost.

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It doesn’t take much thinking to understand how this has happened. The ‘middle class’ jobs came about through industrialisation. Workers needed managers to manage them, facilities needed controllers to oversee them, professionals needed assistants to administer diaries and type, file and dispatch documents, services needed agents to book and coordinate them. Now, any function that can be performed routinely, mechanically or using an algorithm has been or will be replaced by technology. This will leave many of those in the ‘middle’ to take up work that previously would have been held by unskilled workers, pushing the unskilled or marginalised worker further out of any prospects for economic security.

The significance of the implications of this global workforce restructuring cannot be overstated.  With the expectation that by 2030 only 2 billion of the 8.3 billion people on earth will hold jobs of the nature we currently recognise, protecting jobs and industries is not only futile it gets in the way of the vital work preparing for the future.  If this lack of urgency continues, the inevitable increase of people living below the poverty line will be one of history’s greatest crimes against humanity.

The 16 years between today and 2030 is only enough time for a person to finish high school, complete a university degree and gain two to four years of work experience.  Is this enough time (assuming in the future this method of progressing through education will even be relevant) for us to also understand, develop and regulate new industries?  Will it be a fight between the health, biotech and manufacturing unions over who represents the 3D body part printing industry workers, for example?

Space architects, nanotechnology, memory neuroscientists, livestock engineering, robot repairs, virtual ethics lawyers – these are just some of the jobs set to emerge over the next decade.  It is easy to think that obsolete jobs will be replaced with new jobs and therefore no need to panic.  The problem is that the opportunities favour those who are already practising their specialist field.  They will be the ones with enough accumulated experience, training and knowledge to take on these positions.  The expected shortage of qualified workers will push up the remuneration they will be able to command, increasing the divide between the wealthy and the poor.

In this scenario it seems incredible that governments are focused on progression from the past rather than preparation for the future.  ‘Saving industries’ and ‘creating jobs’ is great for political cachet but the reality is a marketplace that simply does not want commoditised goods and services produced and sold using old industrial/traditional methods (especially due to cost).  Government does not have a say in whether these industries or jobs are saved.  All we are achieving is a constant state of tension between the desire to cling to the past and the looming approach of the future.  In a state of tension action is stymied by the pain of movement and the paralysis from no clear plan of action.

The projected imbalance between the working and the non- or intermittently working must put ‘work creation’ on the priority list.  How will the working minority ever be able to pay enough taxes to support the rest?

What should be done?  There are many ideas that have been proposed to improve employment such as the reduction of red tape, revision of unfair dismissal laws and removal of penalty rates.  Many good ideas are made difficult because they are unpopular.  These ideas endlessly argued in parliaments, courts, the media, social media and organisations are only improvements on the master-servant relationship enshrined in English common law.

It’s time to debate some new ideas that will help societies enable more people to work in fulfilling and productive enterprises.  Here are mine:

  1. More people will be working as freelancers and small business operators than employees within the next 5 to 6 years.  As more Gen Y and Millennial Generation workers enter the workforce the growth of this sector will continue.  Why then, are schools still preparing students for jobs they may never hold?  The focus on ‘preparing’ students for the future writing résumés, applying for jobs, career advice are akin to the compulsory subject I was forced into for two years in high school.  I am grateful that I can touch type but the chances that it would be how I earned a living was, even then, dubious at best.
    How many in the school system still operate, even subconsciously, on the premise that the ‘smart’ ones should be groomed for university, the ‘non-academic’ encouraged to find a trade and the non-conformists to find a job.
  2. Whatever funds government is pouring into employment should be adjusted so that at least the equal amount is made available for solo and small business operators.  Not only are they going to outnumber employees, there will be more opportunities for the at-risk of unemployment in their own enterprise than in jobs.  You might even consider self-employment the new entry-level job.
    This option will give government far better return on their investment.  Companies are increasing their use of outsourced work, while average earning for freelancers and solo business operators have been increasing on average year on year.
  3. What if governments paid the first five hours per week up to 30 weeks, say, for any worker employed by a micro or small business?   How many more people would get a starting chance at work?  How many retiring workers could mentor new workers?  How many businesses might be encouraged to reconsider their (non-tax paying) unofficial operations?
  4. What if there was tax incentive for workers to change jobs?  A social policy version of Tony Hsieh’s initiative where Zappos’ new hires are paid $2,000 to quit.  This would relieve employers of workers who would rather be elsewhere but force them to get serious about providing a decent work environment if they want decent workers to stay.
  5. With all the smart technology available, payroll administration should become the responsibility of the individual.  Payroll administration is an expensive burden for large employers, and a nightmare for small employers.  It’s the workers’ money, why don’t they look after its administration?  The employee registers once as an individual tax payer, then as they are employed to work, links up their account with the employer’s.  It then becomes one tax payment on the employee’s total monthly earnings, one tax return.
  6. One of the main arguments against employment reform is that workers need protection.  Putting restrictive practices in place such as minimum hours and penalty rates to discourage poor employer behaviour disadvantages decent employers and employees while the rogue employers simply flaunt the law.  What if employers were required to apply for a licence that comes with basic employer training?  When registration and licences are required for rights like driving a car and owning a cat, it does not seem unreasonable to register for rights that give employers so much control over the economic and in many ways physical and mental well-being of their workers.  Plus it would be a nice windfall for government coffers

The objective for society must be work, not job, creation.  To do this we need to focus on where most of the work will be available, and if this is NOT in employment, then we need to make it easier for independent operators to set up, to operate and to become good employers themselves.

What other ideas do you have?

Let it go! HR practices we know don’t work but use anyway

In 2014 we have the benefit of technology that allows us to see inside a working brain and compute massive amounts of research data to give us a never-before-available understanding of human behaviour.  This has significant benefits for those of us who are responsible for improving the outcomes from people at work.

If the main responsibility of human resources, other than employment administration is the implementation of programs that improve productivity (although this objective is due for a review too, but I’ll save it for another day), new knowledge about the circumstances under which people’s performance will improve should be of great interest to the human resources professional.

Rather most HR programs continue to cling to outdated models.  Here are five errors upon which human resources bases programs that cost thousands of dollars, and countless hours of managers’ time to implement even though they do not do what they claim to do.

1. Financial incentives improve performance

Wrong. Dan Pink in his book, Drive: the surprising truth about what motivates us (Riverhead Hardcover, 2009), described the work of researchers from MIT, the University of Chicago and Carnegie Mellon University who undertook a series of experiments to test the impact of financial rewards on performance.  The researchers were able to demonstrate that for all but purely mechanical tasks (i.e. where no thought process whatsoever is required), monetary rewards have a detrimental effect on performance.

Money does affect performance, of course.  It communicates a management desire for certain outcomes which can imply (the organisational culture plays a significant role in this) a sanctioning of behaviours that will facilitate these outcomes.  The obscene bonuses received by bank employees even while their employers were receiving billions of dollars in taxpayer bailouts is such an example.

2. Setting goals leads to greater motivation

No, they don’t.  Most organisations operate on the basis that giving individuals goals to achieve will encourage motivation, in turn leading to more outcomes being achieved.  The ‘logic’ is we can create a level of dissatisfaction in the employee with their current state; and if we draw a direct link between current/immediate performance and goal attainment the employee will work harder to achieve that goal. Motivation is affected by too many other factors, such as goal conflict, a sense of fairness, unconscious biases and the environment in which problem-solving occurs, to expect that a hypothetical future target can override all other influences.

Progressive achievement towards a goal is far more effective for stimulating motivation.  (Learn more about this from Dr Jason Fox).

3. Goals work if we choose the ones that will make us happy

We are terrible predictors of what will make us happy.  Goals are usually linked to personal ambitions on the theory that if the personal goal is attainable via the achievement of the work goal, a win-win situation is created for everybody.  In his book, Stumbling on Happiness (Knopf, 2006), Daniel Gilbert provides three reasons why this is flawed reasoning:

  1. We think we can imagine the future as a whole. The classic example is the number of people who swear that winning the lotto would guarantee their happiness, yet subsequent studies show that winners are usually no happier than they were before their windfall and in some cases disastrously miserable.
  2. Our vision of future is based on our present. We might think that our longed-for promotion, or spending the rest of my life with this person, will make me happy forever, but we cannot include in our imagined future the changes that will happen.
  3. We are not good at recognising our future situations and how things look when they actually happen. For example, the person who is convinced cosmetic surgery will fix the source of their unhappiness, only to believe that they have not gone far enough in judging the level of correction they should have made and need to keep ‘fixing’ the problem.

4. We are Visual, Auditory or Kinaesthetic learners

Totally unproven.  Identifying VAK learning preferences has become a foundation principle of adult learning theory.  It suggests that individuals are more likely to learn if teachers change their teaching method to suit the learning style of the individual.  The VAK model was developed by teachers for early school learners and was never developed scientifically and has never been proven scientifically.  While people may prefer material to be delivered to them in a specific format, there is no evidence that changing the method of delivery has an impact on learning.  It ignores the role that the type of content plays in learning.  For example, learning geography is going to be more effective if you can see maps, images of terrain and climate, and how these may have affected culture such as food and dress.  Learning to ride a bicycle will be a ‘kinaesthetic’ process no matter how much your ‘learning style’ says you are an ‘auditory’ or ‘visual’ learner.

There is proof, however that learning needs a change in the brain, and this change requires physical activity.  Learning is therefore not going to happen with people sitting in a classroom passively taking on information, no matter how brilliant the presenter may be at VAK-oriented delivery.

5. Feedback helps people to improve performance

Here is a typical explanation how performance appraisals work: “Effective and timely feedback is a critical component of a successful performance management program and should be used in conjunction with setting performance goals. If effective feedback is given to employees on their progress towards their goals, employee performance will improve. People need to know in a timely manner how they’re doing, what’s working, and what’s not.”

Only this explanation is wrong. The performance appraisal system works by helping individuals understand where they have gaps between their current performance and their target performance, and what they can do about them.  This means that all feedback is, in essence, negative (even when it is positive it is still presented in the context of “this is good, but still more is needed”).

Neuroscientists have clearly identified that our brains are fundamentally protective.  Even though threats in the workplace are rarely about survival, our lizard brains are hard-wired to protect us from threats.  We instantly develop an ‘away’ response which may mean rationalising or rejecting the information we receive. If the information is in conflict with our self-image we will change the information, rather than change ourselves. It is not merely a case of ego or vanity. Research shows that a cohesive understanding of our self is vital to our health and well-being.

The brain also recognises facial expressions the eye cannot see.  It guides our instincts about the intentions of others.  When managers rate conducting performance appraisals as the task they dislike most other than firing an employee, it is no surprise that neuroscience shows physical pain is caused to both the receiver and the giver of the feedback. It is no wonder that a meta-analysis conducted by psychologists on 607 studies of performance evaluations concluded that at least 30% of the performance reviews ended up in decreased employee performance

When you consider how much of the work of human resources is based on these five flawed approaches alone you would think some major overhaul is overdue.  The question is whether companies are able to admit that so much that they have set store by is so wrong.

Goodbye, Papino

Last night we had our dog put to sleep.  His already weak heart suddenly gave out and we knew it was time to say goodbye.

Papino came to us through a series of, as it turned out, fortunate events four years ago.  I had undertaken some work for his owner, who a few months later decided to move to Italy.  Amongst all the possessions he left behind was his dog, Papino.  Papino was handed around to a succession of carers as his owner repeatedly failed to pay each of them the boarding fees.  We decided to rescue Papino from going to what would be a sixth carer in as many weeks.  His owner never came back for him.

Papino


Goodnight, Doggy

Despite the limitations of his physical heart, Papino was a dog who was all heart.  Loving and placid, being close to us and being allowed to have his bone inside was all he needed to sink into contentment.  At the same time, if there was ever a dog that wanted to prove himself, that was Papino.  At the time he came to us we kept chickens.  You can watch as each hen quickly establishes herself in the pecking order.  Each time we acquired another chicken, Papino would attempt to stare her down only to back down in resignation soon after.  He must have subscribed to the theory, “If you can’t beat them join them,” because he learned how to be one of the chickens including sleeping in their chicken coop, scratching in the dirt with them, and attempting to eat chicken grains (followed by hilariously comical gagging).  He never quite mastered the knack of pecking grains but he acquired a taste for bread and would fight for his share if any was on offer.

He had many other idiosyncrasies including his ability to position his bed next to his water bowl in a way that he could drink just by turning his head while still lying prone, his eye for any escape chance so he could take himself for a walk to the end of the block and back then knock on the door to come in a few minutes later, and his personality change every time he came back from dog grooming, as if to say, “How could you let them do this to me?”

We watched last night as within the space of an hour his breathing became increasingly laboured and he could no longer perk up and wag his tail whenever his name was called.  As he laid his head down for the last time, we told him he was off to the place where there is never a shortage of doggy bones.

As these things often do, it prompted a reflection on the fragility of life and the hope that we all have enough moments that count while we are still here to make them.  In the context of this blog, our work – I don’t mean ‘job’ – is where most of us make our mark.  It is irrelevant whether that mark is in teaching, health, entertainment, administration or as a part of a group that makes things, or whether it is paid or not.

I still hear people decide which job they should accept, whether it is time to do something new, whether a pay rise is better than a promotion, how a job title sounds, which level they report to, if a position with fewer direct reports is a demotion, on the basis of ‘what looks better on the résumé’.  Really, who cares?  You résumé matters only when you haven’t actually achieved something that does.

So go out and do things that are your best you because it’s all that counts in the end, and even if that thing is just being a loving pet dog, it is more than good enough.

Why businesses should work like not-for-profits

This week as I pause while Encompass prepares for the next stage of the #encompassproject, here is why not-for-profit (NFP) organisations have an advantage over business.

There are still some who believe the world of business has not changed.  At least this is what their business practices would lead you to think.  Admittedly when you have benefited so much for so long from one formula, it is a big ask to let it go.  The formula that I am referring to here is selling to mass markets.  Quick recap: the industrial revolution of the late 1800s/early 1900s was borne of the invention of the steam engine that allowed machinery to out-produce anything that was previously achievable.  Along with steam-powered transportation, the invention of the telephone and wireless telegraphy around the same time allowed suppliers to to develop national and international markets and sell goods at prices even the working class could afford.  The business practices that developed to take advantage of these markets hungry for goods could not be any more entrenched today than if they were mandated by law.

Position descriptions, competency-based systems, performance appraisals, fixed organisation charts, top-down management and bottom-up reporting are all organisational practices designed to maximise efficiency for mass market selling.  The businesses that continue to battle it out for the mass market dollar become increasingly commoditised as they compete primarily on price.  There are many segments that are dominated by few providers because most, especially the small operator, have been unable to sustain the squeeze on prices.  Goods sold in supermarkets and variety stores, insurance, magazines and travel services are examples.

Today’s markets, in direct contract to mass markets, are fragmented, marketing is becoming ‘democratised’, and consumers seek personalisation – even if it means more self-service and trading personal information.  This new environment favours the small business operators that are not tied to contracts of scale (e.g. minimum order and shipping quantities) and where decision makers have direct conversations with their customers and suppliers as a matter of course.

http://tomfishburne.com/site/wp-content/uploads/2012/09/Slide05.jpgNot-for-profit organisations are in an even more advantageous position because they already organise around the markets’ changing expectations.  Generally, they:

  • Organise to serve a mission or community interest rather than shareholders;
  • Focus on customers who are interested in the organisation, not just the products and services they deliver;
  • Incorporate highly participatory processes that include members of the community;
  • Expect their people will build skills and contacts within their sector not just within their position in the organisation.

Many corporate organisations have adopted some of these practices trying to stay relevant to their customers – with mixed results.  In 2009 Kraft felt the ire of their customers when it asked for suggestions for a new name for Vegemite.  48,000 ideas later, the iSnack2.0 hit the supermarket shelves and soon after the new name hit the rubbish bin.  On the success side, the restaurant chain, Chipotle, created a series of videos to support their ‘Food with Integrity’ values.  The videos attacked industrial farming practices succeeding in convincing the public that the business considered itself part of an ‘ethical ecosystem’ (ironically promoting sales of fast food).

(Aside: You have to admire the cleverness in bringing up the issue of fast food and re-framing it.  The last line in the video states: “Those people died of eating, not of starving. That’s progress!”)

If NFP organisations find themselves sitting in the position where the market has evolved around to matching their basic make up, how do they use this to their advantage?  The first important step is to abandon the mass marketing practices they have been emulating.  Look at the practices adopted by many tech and online start ups.  Tech industry founders consider themselves part of a community not an industry; in fact many go out of their way to avoid corporate practices and the risk of losing their agility and market-responsiveness.

Build practices around your strengths and your relationship with your community and if it looks like no one else’s structure and practices, all the better because it becomes your own ethical ecosystem.  That will be something all business will have to learn to do.

#encompassproject – when good ideas become reality

Last Thursday it was my privilege and pleasure to be invited to Encompass Community Services by CEO, Elaine Robb, to attend the launch of the Encompass Revolution.  Staff gathered to hear Elaine, and Board Chairperson, Dr Alyson Miller, explain the purpose of the ‘revolution’ and to watch the launch of Encompass TV.

Elaine gave an impassioned speech on the remarkable work that the team of loyal and committed Encompass staff performed every day and the difference this made to the lives of many.  BUT, Elaine continued, there was more work to do.  Times change and new challenges continue to arise, prompting the need to ensure Encompass was always adapting.  Elaine told her team that the Encompass Revolution would be many things, including new ideas, better systems and more services, however it would not be reducing staff or removing positions.  The team at Encompass, she concluded, was the ”best staff in the world” and the Encompass Revolution was about removing barriers that prevent them from doing more for disability services, not-for-profit organisations, Geelong and wider community.

Alyson spoke simply of the opportunities ahead for Encompass to pursue greater things using a community of the motivated, talented and skilled people who were sitting in the room.

Encompass TV launch

Encompass CEO, Elaine Robb, addresses her team

The inaugural episode of Encompass TV was launched to the delight of the team.  Its producer (and for now director, program manager, sound and camera person and editor), Fritzie, managed to capture the spirit of Encompass and some stellar grabs of team members and clients.

Elaine generously allowed me to speak to the team to explain the background the #encompassproject and the work I had done with the organisation over the years.  One thing that Encompass and Elaine has achieved that many organisations never do: every person in the room knew word-for-word the Encompass Vision and knew exactly what it meant to them and their work.

Organisations regularly implement programs, policies or procedures to increase employee participation.  There is always a new trend; twenty years ago it was flexitime.  Ten years later we had employer of choice with massages and birthday days off all the rage.  Casual Fridays is still considered a ‘bonus’ in some workplaces.  The success of initiatives that interfere with positions and status, particularly for full time workers, are typically the least successful.  The ability to work outside what is still for many organisations the ‘backbone structure’ of rigidly managed full time work often ends up little more than good intentions; they like the idea but not the changes needed to allow them to happen.  As one industrial relations lawyer once wryly remarked to me, “Employers are happy to offer many flexible initiatives, but they’re always surprised, sometimes resentful, when anyone tries to use them.”

In this, the 21st century, employers need to understand their workers differently.  The platitudes of being the “most valuable asset” will no longer wash.  Perhaps once when people were human-powered production – basically the parts of production that could not be performed with a combination of electricity, mechanical parts and computers – there could be some argument that the employer owned (an asset being a resource that an entity owns or controls) the labour which is how a person came to be a legal entity’s ‘asset’.  In the knowledge economy, the workers own the assets – their knowledge.  The organisation leases this knowledge.  In place of rigid positions and inflexible rosters the organisation creates a positive workplace culture to promote innovation, considered risk-taking, and the ability of staff to continuously self-evaluate and self-moderate.  The organisation ‘partners’ with the knowledge asset owners to maximise the value of intellectual and social capital, resulting in on-going opportunities for both.

It’s a paradigm shift that few understand, for a large part because it has only had a few years to develop, against the 150 or so years of the industrial economy.  The companies using what software company Atlassian calls ‘Ship It Days’ (giving time to employees to work on any project of their choosing for a set amount of time) have been the progressive ones.  Encompass, to its enormous credit, took a giant leap last Thursday, making a commitment to its staff to become a partner to the vast untapped resources of its employees for the good of its community.

#encompassproject – bring on the community

It’s a risky topic, ‘strategic communication’.  Too many times we have experienced the rounds of ‘strategic communication’ that ends up being an impenetrable garble of consultant-speak or heartily expounded calls to arms to achieve goals that bear no resemblance to the daily work of most of the audience.

Strategic communication is an intricate process of masterfully breaking down an agenda to turn it into messages that are ‘pushed’ out through a delivery system that will result in people taking a particular course of desired action but when it comes to internal communications many organisations seem to spend most of their efforts on the higher-up agenda and expectations of changed behaviour.  Far less effort is spent on breaking down the agenda so that the messages are relevant to the different audiences, and on devising delivery systems that enhance the message and its acceptance.  For instance it is invariably assumed that the dissemination of information should be top-down and that emails or group meetings are the best forums..

You may have seen a version of this joke before:

Memo from CEO to General Manager:

Today at 11 o’clock there will be a total eclipse of the sun. This is when the sun disappears behind the moon for two minutes. As this is something that cannot be seen every day, time will be allowed for employees to view the eclipse in the car park. Staff should meet in the car park at ten to eleven, when I will deliver a short speech introducing the eclipse, and giving some background information. Safety goggles will be made available at a small cost.

Memo from General Manager to Department Manager:

Today at ten to eleven, all staff should meet in the car park. This will be followed by a total eclipse of the sun, which will disappear for two minutes. For a moderate cost, this will be made safe with goggles. The CEO will deliver a short speech beforehand to give us all some background information. This is not something that can be seen every day.

Memo from Department Manager to Supervisor:

The CEO will today deliver a short speech before the sun disappears for two minutes in an eclipse. This is something that cannot be seen every day, so staff will meet in the car park at ten or eleven. This will be safe, if you pay a moderate cost.

Memo From Supervisor to Team Leader:

Ten or eleven staff are to go to the car park, where the CEO will make the sun disappear for two minutes. This doesn’t happen every day. It will be safe, but it will cost you.

Memo from Team Leader to Employees:

Some staff will go to the car park today to see the CEO disappear. It is a pity this doesn’t happen every day.

The word ‘communication’ is derived from the Latin noun communicatio , which meant a sharing or imparting.  ‘Communicatio’ descended from ‘communis’ (common, public), the same root word from which comes ‘communitatem’, Latin for community, society, fellowship.

As community-building is at the heart of the #encompassproject the strategic communication program needs to achieve the essential meaning of the word in its purest form: mutual exchanges between people listening and speaking.  In today’s world this is a far easier objective – at least technically.  The profusion of low or no cost software platforms provides the means by which Encompass Community Services could develop its very own television ‘channel’: Encompass TV.

Encompass TV will be video content created for and by the Encompass Community.  Whether the content originates from management, from the news, from staff, clients, families or the broader community its purpose is not to tell but to engage.  A small team has been working on content for its inaugural launch this Thursday March 27.  I can’t wait to post a link from this blog so everyone can see it!

I think they should call the channel enTV – it has a certain ring!

Communication

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