April 17, 2013
One of these counter-intuitive truths is that “when you manage costs, your costs go up. When you learn to manage value, your costs come down.” There is the business case for systems thinking, if one was needed.
Thanks go to David Wilson through his fitforrandomness blog for bringing a presentation by Seddon to my attention. Makes great watching and listening. There is so much to learn from this talk on so many levels, but when I was watching the video, I kept making the link to management, leadership and new thinking. New thinking to me means a new set of assumptions about organisations and how they get things done.
I think Seddon accurately describes quite a lot of what happens in organisations today; doing the wrong things righter. We have managers who set targets for activity, who then focus people on meeting activity targets. Managers approach their work as target setters, people inspectors, people managers; when targets aren’t met, the managers try to manage individual performance. As he says, modern managers are trained (if at all) to do one-to-one, which he calls a therapy model. I would say he’s not far off the mark. If we are teaching people to be good people managers, we are training their gaze to the 5%, rather than the 95%. This is not to say there is no place for more empathy, respect and humanity in the workplace, far from it. However, in terms of getting things done, in terms of being more effective, treating people well is not the answer on its own. If the system is still set up for people to meet targets rather than work towards achieving purpose, we may just have a lot of lovely workplaces where people are still meaninglessly ticking boxes and shuffling bits of paper. If the system is still command-and-control, commanding and controlling with a smile will not make much difference to organisational effectiveness and betterment. Command-and-control with a smile is like putting a cherry on a turd. Yes, we still need control in organisations, but not as we have understood it up till now. Not managers controlling people, but, as Seddon says, people having control over their work. We need management that focuses on systems, not the people.
Loathe as I am to isolate just three of Deming’s 14 points (because he meant for all 14 to be taken on board together, not as a pick-n-choose menu), when he said:
Eliminate work standards (quotas). Substitute leadership.
Eliminate management by objective. Substitute leadership.
Eliminate management by numbers, numerical goals. Substitute leadership.
…… I believe he means substitute. Put something in place of another. Put leadership in place of targets, quotas and numerical goals, individual performance management, inspection and supervision of people. I understand it to mean that we stop doing targets, individual performance management and all that other stuff that aims to control what people do. As Deming also says, management by objective ensures mediocrity and stifles innovation. There you go, another counter-intuitive truth that Seddon speaks of, and a modern-day heresy. I think it’s important to really consider what kind of management would actually serve organisations better, and we need to get clearer on what leadership means, too. I will add that I don’t think it’s making it a semantic exercise, calling managers “leaders” and getting them to keep doing the same old stuff. The picture I have is that managers start doing management differently AND they start doing leadership as well.
My understanding is that when people like Deming and Seddon advocate for the elimination of targets and performance appraisals, they are not suggesting that we eliminate management. It can be confusing sometimes because so much is written about management and leadership and, as John Kotter and others have already observed, the two terms are often used interchangeably when they mean different things. For example, when Deming says in his 14 points, “substitute leadership”, one could easily misinterpret that to mean he is pooh-poohing management. He is not; he is pooh-poohing management by numbers. Organisations still require management. Deming himself said, ”A system must be managed. It will not manage itself.” In our current paradigm, however, we misconstrue management to mean managing people: getting people to work to targets, inspecting them and chastising them when they miss a target. Old-style management focuses mostly on the people, Deming’s 5%. The 95% is the system; I’ve seen managers who manage the system and it’s far more effective at making the work work for everyone. I see management as the set of tools and processes that people apply in their work that allow them to provide the services or make the products that the market is asking for. Every organisation will have these tools and processes, but I think the point that Seddon and other systems thinkers try to impress upon people is that, by and large, those tools and approaches to managing are oriented to managing the wrong things. I see this in my work, too. So trying to integrate Seddon’s talk and Deming’s work and my own experiences, I would say that we do away with old-style management practice and replace it with the kind of management that works on the system….AND institute leadership. Management and leadership, different things. Both necessary. Complementary. Both/and, not either/or.
So what would a manager’s work look like if they were doing system-y management things, rather than control-y, target-y management things? How would someone in a senior management role occupy themselves, then, if they didn’t have all those “HR issues” to deal with? I feel privileged to say I used to work in a place many years ago, where the senior managers did this system-y stuff, rather than the controlling stuff. I say privileged because it’s more than just a lovely thought experiment for me, and at the same time, I still need to sit and think about how to approach the work I do. I want to be careful that I don’t come across to clients that I’m inferring they should drop the “management” ball and focus solely on developing their leadership.
Interestingly, when the two senior managers of my old workplace moved on, they were replaced with people who didn’t get systems thinking. Even more interestingly, the reputation of this organisation has gone downhill, they are struggling to survive, they are struggling to attract contracts, they are seriously struggling to retain good staff. The place has turned into a paper-shuffling nightmare with little room for autonomy, innovation or real learning. People feel stifled and it’s not a nice place to be anymore. Still….as far as the new managers are concerned, it’s working MUCH better than before; after all, they have everything under control, they have the people under control (…if they only knew) and everything that can be counted is being counted.
So, it’s not about getting rid of management in favour of leadership; organisations need both. The role of someone in a management position, however, is to provide the kind of support that people need in order to do their jobs well, not to keep tabs on them while they do it. Taking away targets does not mean living in lovely fluffy, cloud-land. It doesn’t mean, for example, that people stop having fierce conversations with one another. It’s just that they stop being fierce about which numerical targets people haven’t reached yet and which behaviours they need to stop and, instead, are fierce about quality. Quality freakery, not control freakery.
If we get managers to take up that system-y support role (making sure everyone has what they need blah blah blah), we can get rid of the target-y stuff. I like the roundabout/traffic light analogy. If the traffic people build a roundabout, they are implying, “We trust that drivers have all the information, experience and training they need to make the right decisions about who goes next.” The role of the traffic mangers, then, is to ensure that the system is built and maintained that promotes good flow and that people have learnt what they need to about responsible driving etiquette. Their job is not to keep tabs on individual drivers. Traffic lights, however, infer that drivers don’t need to do anything but what they’re told. Red means stop, green means go and amber means speed up or else you’ll have to wait for the next green. They then set up cameras to inspect whether or not people are breaking the rules and if they do, they get a fine in the post.
So management is about making sure people have all the knowledge, information, learning, resources and relationships necessary to get the job done and that the system is designed to make the stuff or provide the services that the market actually wants. If you haven’t yet, watch that Seddon video to hear some good examples of what shouldn’t be happening and what is starting to happen differently, illustrating how costs come down as the work gets done better for the benefit of the “market”.
So what is the leadership stuff? In my old workplace, the senior managers managed like systems thinkers (working on the system, not on the people) and they also role modelled leadership stuff. Leadership is often associated with providing a vision. Once again, the assumption is often that the few people “at the top” will craft that vision and then apply a bunch of management techniques (individual performance management, targets, standards) to get people to do stuff. I believe there is a disconnect. Why should the senior managers have the joy of working to achieve a grander purpose while all the workers get to see is their activity targets? Even if those “at the top” put together a vision, it will not necessarily come to fruition just because we tell people, “This is what you have to do.” I believe it comes to fruition when everyone in the business is a part of it, when everyone connects with it, when everyone is enlisted into it. I will do something really well if my will is engaged in it, not just because I have to. Best way of engaging my will? Include me in something bigger and bolder than a numerical target. In any case, if I’m a good boy, I may just try to meet my target and go no further or I may try to find creative ways to play with the numbers so it looks like I’ve met my targets.
To get leadership, I believe we need to emphasise purpose: what are we here to achieve for our “market”? Depending on the organisation,the market is someone buying our products and services or a social housing tenant who needs repairs done or a patient who needs good treatment. If targets are set, then, as Seddon suggests, the people work as if their purpose is to meet the targets. I believe organisations have other, more useful things as their purpose. I’ve used the example before of grave-diggers. The activity they engage in is digging and tending graves. However, I believe they are part of a wider system whose purpose is to assist families through bereavement. It is not just semantics; it makes a difference to how they carry out their work. It also makes a difference if they are connected to that purpose because rather than have to be carrotted or sticked to do their jobs well, they can see how they add value to the purpose, how they add value to those they are there to serve. The purpose, then, is not about meeting targets for how many graves they have to dig or tend. They already know how to do that well and don’t need beaten to make it happen. If the managers spend their time working on the system to make sure the grave-diggers have everything they need to do their jobs and the processes are clear, they can let them get on with it, and if there is leadership, everyone will be connected to purpose: making a difference to families in distress.
As Gregory Gull says, leadership must transcend self-interest. That, to me, seems self-evident. If someone is “doing leadership”, they are cognisant of those around them and the wider system. Operating purely out of self-interest is self-defeating in the long run. Good leadership is about seeing possibility; having the vision of how things could be. It’s about making a difference to others; having a deeper sense of why everyone really comes to work. Gull also says that leadership is related to one’s personhood, not one’s position. I believe the same. Good leadership development is good personal development.
I agree with John Kotter, that there are very very few organisations that have sufficient leadership. They may have managers who have re-styled themselves as “leaders” because it’s just what you call yourself these days. Without a shift in thinking, however, what we end up with a bunch of “leaders” still applying old management tools and looking for the people to blame when things don’t get any better.
Am I adding anything to the wider conversation? Not sure, but pondering and reflecting on all these things has helped me to get clearer in myself. As I’ve said before, I primarily write for myself; to help me integrate and seek to be of some use to clients. I do, however, welcome comments that build on this conversation and which may give me pause for further thought.
February 21, 2013
Individual performance management is rubbish. Not only that, it’s patronising and disabling. I’ve said it before. When people aren’t performing, it’s extremely probable that it’s not a behavioural problem; it’s the system. It’s not that performance management as a concept has been sullied because it’s been ineptly carried out. It’s just that it’s pointless and in some cases counter-productive to actually getting good performance. Deming’s 95% percent rule.
Sure, some people are not performing well enough. They aren’t doing their tasks. They are not meeting targets. Targets. That’s another, connected conversation. Stop looking at the individuals and look at the whole.
There is a mindset that says, “an individual’s performance must be monitored/managed/reviewed”. What’s a mindset? I like Bob Marshall’s treatment of this: “a set of ideas, assumptions, beliefs, heuristics, etc. (e.g. memes) which interact to reinforce each other.” In most cases, we are unconscious of the mindsets out of which we operate and see the world. We just behave out of them. So there are a whole set of these (mostly) unconscious things that coalesce in our minds. It’s a reflexive thing, too. We have a set of beliefs and assumptions, we then have a bunch of experiences. We give meaning to these experiences out of the beliefs and assumptions that we bring, which in turn reinforces those assumptions. An example of a self-preserving, self-reinforcing mindset:
“Why do you keep that rabbit’s foot?”
“Because it keeps the elephants away.”
“But there are no elephants anywhere near here.”
“See? It works.”
Like Bob, I believe that “attempting to simply swap out selected memes, one for another, on an incremental basis appears infeasible.” Granted, this also comes out of my own mindset and I could be shooting myself in the foot by saying this. At the same time, I have come from “individual-performance-management-land” and it was found wanting. Back in the old days when all this was fields, I also used to assume that someone had to monitor and manage my performance because that’s just what happens in the workplace. Then I grew up and realised I don’t like being “told off”; it’s demoralising, it’s disrespectful, it’s limiting. Counter-productive to being productive because it often leads people to withhold any kind of effort beyond what they are instructed to do by the all-knowing, all-seeing bossman (though in one case for me it was a woman).
The “individual performance management” meme was also blown out of the water by experience. Many years ago, I had first hand experience of “effectiveness-land” and it worked. By this I mean that the work was far more satisfying for everyone, we were incredibly effective at what we did and we all brought our creativity to the table, making for a culture of genuine continuous improvement. We knew we were effective, not because our managers told us we were or that we achieved X% of our KPIs. We knew we were effective because our stakeholders told us so. They included the clients we worked with directly, the statutory government agencies to whom the agency reported, the media and our peers in other agencies. And if the quality of our work was substandard, we had good feedback systems in place and were told about it, and because we already had in place a culture of learning, we sought to adjust our working practices….
…..and we talked about our performance all the time.
In recent years, with growing awareness of the need to humanise workplaces, some have advocated for a more humanised performance management process. This means, in many cases, that managers have been trained to structure performance reviews as more of a mutual conversation than a top-down, Manager-driven assessment of performance against a pre-determined set of targets. Often, though,the mindset has still not changed. Forms are filled out, the conversation revolves around targets and KPIs, only the employee is invited to speak first and evaluate themselves against the same old criteria. The assumption that monitoring individual performance is essential still underlies what goes on, it’s just done in a friendlier way. I’ve used the expression before: you can’t polish a turd, but you can roll it in glitter.
You don’t get a flower to grow by pulling on it. You create the conditions within which it will flourish and do what comes naturally to it. If we hold to a Theory X mindset, then we will be oriented towards a carrot and stick approach to getting better performance. If we hold to a Theory Y mindset, then we will be oriented to crafting a structure within which people will flourish and do well. I read a very short but very delightful article this week by systemthinkingforgirls entitled, “The only question a manager should ask in an appraisal.” That question is, “What stops you from doing a good job?” Behind this question sits the mindset that it is the system which stops people from doing well at work, not their individual skills, knowledge and attitudes. Performance appraisals as we currently understand them focus on people’s individual stuff. Tarting them up so that they aren’t as scary or rejigging them so they are “two-way conversations” still doesn’t address the underlying assumption that they are useful.
This notwithstanding, I am not suggesting that managers suddenly stop talking to anyone about anything they do at work. I’m also not suggesting that people just stop having conversations about performance. I’m suggesting that conversations that presume managing and monitoring an individual’s performance is essential will not necessarily lead to effectiveness or a high-performing organisation. It’s specious logic to say that we’ve always done it, look at that business there, they do it and they are successful, therefore…. That’s Monty Python logic: we’ll throw her in the pond and if she floats, she must be made of wood and therefore, a witch.
Perhaps a more useful performance conversation is done with a view to offer coaching and support or to detect noise in the wider system. ”What stops you from doing a good job?” Lack of knowledge or technical expertise? Poor relationships with peers? Inadequate or impenetrable policies and procedures? Outdated or insufficient information? Poor resourcing? Lack of experience in the organisation? Breakdowns in communication between different parts of the organisation? All of these questions point to the clues as to where we would find the barriers to high performance, and it’s more than likely it’s not an individual’s inadequacies. Deming’s 95% rule.
By poo-pooing individual performance management, is the inference that I’m anti-performance, anti-effectiveness, pro-lovey-dovey-nicey-nicey? You might as well say I’m pro-crime because I think our current criminal justice system is broken. I realise it’s heresy to suggest that managing individual performance is useless. To reference Bob again, he wrote a great list of invalid premises that businesses would do well to jettison, one of which is that an individual’s productivity and performance is down to the individual. Related, yes, for if you have someone in a job who doesn’t have the technical skills necessary to carry it out, they are likely to do poorly. ”Related”, but not “down to”. If the system is screwy, it will be hard for any individual to excel.
A bad system will beat a good person….every time. Deming
Let’s get good performance, yes. Let’s also look at how we get it and examine the assumptions we make about how it happens. Are we doing the wrong thing righter? Or are we establishing the fertile ground from which high performance will spring? Let’s have performance conversations, yes. Let’s look for the systemic causes of poor performance in the organisation. Let’s talk about the organisation’s performance, not that of individuals.
What do we do if individual performance management is abolished?
What would we find in a high-performing organisation, then? A 2007 AMA study, “How to Build a High-Performance Organisation”, sets out five domains they observed in their survey of businesses that excel. It acknowledges that external factors impact on performance and looks at what they do to navigate an environment which is volatile, uncertain, ambiguous and complex. The five drivers that most heavily influence performance are:
- Strategic approach: clear vision supported by flexible plans
- Customer approach: clear focus on engaging and maintaining good customer relationships
- Leadership approach: clear goal-setting, coaching and mentoring when necessary and appropriate, ensuring people have a clear line of sight that that vision stuff
- Processes and structure: ”good enough” policies and procedures that facilitate the work, not create busy work that takes people away from their real work. Structure that eases information flow and good relationships across businesses
- Values and beliefs: easily understood set of values that are lived by everyone, not laminated
If we default to old mindsets, some might read in there that we still need to manage individual performance, otherwise, how would we achieve that stuff? I believe it’s more about creating the conditions within which let people do well. If we could substitute leadership for performance management, perhaps we would get there. If those who lead the business did some reflection and committed themselves to adopting Theory Y as their touchstone, perhaps energy would be spent on making sure people had all they need to do their jobs well and then getting out of their way.
November 25, 2012
Don’t ask a systems thinker for advice on managing performance or staff engagement. They will probably say something pretty fruity and you’ll wind up frustrated by how fervently they trash conventional wisdom on the subject. Of course performance, engagement, recruitment, they’re all connected, so your systems thinking friend will sound like a fruit loop because they’ll see the whole picture and proceed to suggest that you are asking the wrong questions, when all you wanted to know is “how to get people to do stuff”. You go to them as a sounding board because there is something you like about the way they think; when you’ve talked previously, they come up with ideas that seem counter-intuitive at first, but are actually surprisingly on the money. However, when it comes to a sticky situation you are actually dealing with, you don’t want to hear them bang on about the system, the system, the system. Isn’t that just lovely sounding theories that academics spout? (…wouldn’t work in the real world) In an effort to get them to answer your simple question, you keep repeating “Yes, but they are SUPPOSED to fill out their daily task logs,” quietly tearing your hair out while they insist it’s not a behavioural problem; it’s a systems issue.
One of the most important things I learnt from my past life as a therapist is that if you want behaviour change in an individual, you work with them as a whole being and you work with their whole system (family, friends, peers, environment). You don’t focus on their “problem behaviours”. Similarly, if you want behaviour change in an organisation, you work on it as a whole. You don’t focus on the dysfunctional parts or the underperforming individuals. In my present life as a sociatrist, I apply my understanding of systems to organisations and organisational change, not merely the individuals within them.
We can’t blame individuals for doing what the system expects them to do. As disturbing as Milgram’s experiments were, one thing I observed (and I may be entirely off the mark here) is that people behave in ways which surprise themselves and which sometimes go against what they know to be right and true. We do this when our environment, our system, sets up conditions which compel us to behave in particular ways. The system also punishes us for not doing what it wants us to do, just to keep us in line. We do what we’re told.
What we need if we want organisational transformation, if we want more effective organisations, if we want people to find the work they do meaningful: we need to work with the whole system. A buddy of mine in England recently observed that most people seem uninterested in effectiveness. Sad but true, I fear. Still desperately clinging on to “scientific” management mythologies, many folks just seem to want the numbers to add up and people to do what they’re told. A scary prospect if your business has just appointed a new global CEO who is a bean-counter by background and disposition and whose single-minded purpose is to show the shareholders that they are getting richer every quarter. Calling a performance issue a “behavioural problem” comes out of a mechanistic worldview. Yuck.
There is hope, however. Some managers are on the threshold of doing something quite different….if we would just hang in with them. They know in their gut that doing the same old, same old is not going to make a real difference. I’ve been working with a manager and his two off-siders, all three of whom lead their business. I’ve been coaching them to see the bigger picture and assisting them to open their thinking about why things don’t go the way they’d like. This, to me, is phase one of the organisational transformation they are seeking to effect. Phase one: eliminating systems blindness. Our sessions usually begin with each of them discussing what so-and-so hasn’t done yet again or what what’s-his-name is still doing, despite that one-to-one chat urging them to stop it. I let them get some things off their chest and jot down a few salient things that I pick up. As I listen, I make connections in my head and find the patterns they are describing. These patterns are descriptors of the system. After a little while, I might say something like, “Haven’t we heard all this before?” They smile. Then they frown. What they are slowly learning to do, however, is to see the behaviours as indicators of the wider patterns at play.
The patterns I’m observing in how they describe the staff illustrate a workplace culture characterised by:
- things done at the last minute without much fore-thought
- poor self-discipline with regards working practices
- low self-reponsibility
- poor following up of commitments and promises
- getting easily side-tracked
- being reactive, rather than proactive
- a “she’ll be right” mentality (a common expression in New Zealand meaning, it’ll all be fine in the end, don’t worry about it)
- inconsistency in work practices
- an overly laidback attitude towards work
- a “can’t do” attitude
Behaviours at work are tempered by the systemic norms; you could also say it’s the “culture”. You can read this in many places on the interweb: the system is responsible for performance. Don’t blame people for doing what the system asks and similarly, stop rewarding individuals for good performance. The system drives performance.
Reward for good performance may be the same as rewarding the weather forecaster for a pleasant day. Deming
I’m utterly convinced (from my experience) that the organisational changes they want will come about when they focus their attention and their energies on the system and not on the individual behaviours of individual people. So when I share my observations with the three of them, they nod and smile and say, “That’s exactly what they’re like; that absolutely describes the culture.”
I then enquire as to what they’ve tried, in order to put a stop to the things they don’t like. Again, I listen for patterns. With all good intentions (for they are really lovely people), they tell me things like:
- “Well, I was going to schedule another one-to-one meeting and go through their KPIs again, but something urgent came up.”
- “I had it written in my diary but I couldn’t remember which page I’d written it on.”
- “I’ve confronted him about it before but it didn’t make a difference, so I couldn’t see the point of following him up again.”
- “He knows what he’s supposed to do, he’s been here for 10 years, I don’t see why I should have to tell him again and again.”
- “They’re like a bunch of children; you have to keep on at them, otherwise nothing gets done.”
- “Yes, I had a chat with him and said I’d meet again a week later to see how he was getting on, but I let it slip.”
- “He was fine for a week after I talked to him, but he’s slipped back and I don’t know how I can get it across.”
After they report what they’ve tried, I ask them to reflect on how similar their patterns are to the patterns they bemoan in the staff: inconsistent, side-tracked etc etc…. Again, they smile. Again they frown. They (fortunately) find it mildly amusing that they are doing much the same as the staff. Here is when I reinforce the idea of systems. They are part of the same system and that very same system will be exerting itself on them. In our conversations, they are becoming more adept at seeing. I mean really seeing.
Remember, Deming said that a system cannot understand itself. It’s not just true because Deming said it. It’s true because it’s true. It doesn’t matter how frustrating we find it, but the systems to which we belong will be exerting their influences on us. We struggle to know this. We struggle to know how much. We find ourselves at times frustrated with ourselves, as well as others. It takes an outside eye, a disinterested party, an objective mirror, to help us to see what we can’t. They’re called blind spots for a reason. Obvious to me, previously hidden to these three leaders, their system is screwy, not the people within it.
These three lovely, well-intentioned leaders have warmed up to the current phase of their work together. Phase two: creating the vision of what you want. Now they are aware of this thing called “culture”, and that it impacts on them and that no one person is to blame for doing what the system urges them to do, they are excited to create a vision for the culture they want. They are beginning to see the wood for the trees and are more able to make connections to the elements within the system that maintain its status quo. They are excited. I ask them naive questions like, “What is your purpose?” “What does your business exist for?” ”How would you like it to be here?” and they eagerly discuss things that they feel should be so obvious but when asked directly, need to stop and really think about it.
Lately, rather than see themselves as victims to all those awful things the staff do, they are excited to recast their roles as stewards of the system. They get the paradox of systems thinking: they are in it and subject to it, and at the same time, if they can begin to manage their systems blindness with the help of an outside eye, have the power to do something about it. They are seeing themselves less and less as managers-who-need-to-be-in-control and more as leaders-who-guide-the-culture. They are more infused with hope for the future. The things over which they do have control (policy and procedure manuals, resourcing, their own attitudes, their individual relationships with staff members) are the influencers which they can apply to generate the culture they believe will be more effective and, in the long run, more efficient.
Rather than trying to find new ways to get people to do what they want them to do (re-sharpening their sticks or coating their carrots with glitter), they are thrilled to devote more and more time in our sessions to the thing they want, rather than the multitude of things they don’t. They are thinking bigger: about themselves, about the staff and about the business.
Systems thinking, for me, is not merely an academic exercise. It is real world. It changes lives and workplaces.
Next steps for these three? Well, it’s emergent, a work in progress. We’ve had some ups and downs. We’ve had times when they felt a little like they were banging their heads against a brick wall. At this stage, however, they are hopeful, they are positive and they are now talking more about modelling and leading the change they want to see. (Didn’t some famous peace-loving figure from history say something about that?) They are truly interested in being different themselves. They are considering how to steward a culture of self-responsibility, flexibility and “can do”, learning from mistakes and “just enough” structure….and for me, they are approaching phase three: grappling with the “how-to”.
In truth, it is an absolute pleasure.
November 4, 2012
Part III (Going Further)
In Part II of this article, I suggested that if we remain wedded to a mis-placed set of thoughts and beliefs about business, we will end up asking the wrong questions. We cleverly ask these questions from within our old intellectual bubble, coming up with “new-and-improved” solutions to problems, however we only end up doing the (same old) wrong things righter. What happens if we apply bigger thinking to business challenges, though? So there is this thing called systems thinking, so what?
If we think bigger about business problems, we can make a fundamental shift in effectiveness. I often use our shift in thinking from a geocentric to a heliocentric view of the solar system as an example of the difference that a paradigm shift can have on our lives. So Copernicus said the sun was the centre of the solar system, so what? What did that mean in a very practical sense? Copernicus challenged the prevailing orthodoxy of the time, which was central to Church doctrine. Kepler, Galileo and Newton followed on, demonstrating with science that Copernicus was right. So what? Just try and tell me that the scientific revolution that followed on didn’t make much of a difference to the average person’s life. Think of the ripple effects. The scientific revolution…..science gives us the means to challenge the prevailing institutions of governance…science encourages us to think for ourselves….science revolutionises medicine, technology, art and culture, architecture, food production…..
Similarly, systems thinking is revolutionising how we organise work and how business does business. There are examples of how applying systems thinking is making business more responsive to customers, more satisfying and meaningful for people who work there and more effective at what it does.
How do we organise ourselves? Command-and-control hierarchies are so 19th century. They are about controlling the business. As this example from Portsmouth City Council demonstrates, a really effective business will be driven by its customers. Business decisions will be made at the point where it interacts with the customer. Often, important decisions are made by those in a managerial role, distant from the customer. ”Managers know best” is one of those nasty underlying assumptions on which we base the role of a manager and influences how we organise work. If I’m most effective at work, I should be responding to market demand, not management diktat.
Taking a systems thinking perspective on how a business does business can illuminate the need for transformation; for actually doing something radically different. Much as Owen Buckwell did at Portsmouth City Council, asking the right questions from a bigger picture perspective will highlight what lies beneath some of the seemingly intractable “stuckness” in getting to real effectiveness. Government inspectors routinely gave the Council glowing reports, however Owen knew that things weren’t right. How did he know? ”Noise” in the system that didn’t come from the conventional ways of measuring the work. Customers were constantly complaining and Owen was unsettled enough to ignore the positive government reports and instead seek to uncover what his “market” was actually saying. These government inspectors measured customer satisfaction, for example, by asking questions such as, “Did the tradesman smile when you answered the door?” and “Did workmen clean up after their work?” They didn’t ask, “Was the problem completely rectified?” or “How many times did the tradesman have to come back to fix something that wasn’t fixed properly at the first visit?” They were there to provide a service to ratepayers and Owen recognised that this wasn’t happening satisfactorily, so he began to ask the right questions of the customer. They got the big picture of how the business was performing, which they needed in order to radically transform how they did business. Owen also had an inkling that people came to work to a good job and he was right. By handing more operational decisions to those who carried them out, he found that job satisfaction increased. He took action on the system, not on the people, and shifted how they do business from command-and-control (doing what government inspectors want) to a systems approach (what the customer wants). In the end, they meet government targets “by coincidence”, but more important to Owen is that they are providing the most effective service to ratepayers.
How do we approach performance management? Typically, performance management is about asking the wrong questions. In any case, if we think bigger about it, individual performance management is pretty useless, by and large. This next example demonstrates Deming’s 95% rule: the best place to look for improvements is the system, not the individuals within it. Work on the system, not on the people. If we continue to rely on analytical measures of performance and mechanistic means to make it happen, we will not unleash the kind of thinking and creativity (from everyone) that business needs if it is to survive. Once again, do we tend to ask the right questions when it comes to performance management?
Taking a systems thinking approach can uncover root causes of seemingly intractable blockages within a business. It broadens our perspective and can release us from the kind of inertia that keeps us doing the same things again and again with little significant change. Take a client of ours who realised that the problem with performance management was not “performance management”. While consistently figuring highly in “best places to work” surveys, they had a recurring problem with “poor performance”, specifically, that people didn’t feel the organisation dealt with poor performance very well. In many other aspects, the people felt it was a great place to work, but that something had to be done to manage those who underperformed. In some cases, it got so bad that people were “managed out” of the organisation, much to their surprise. Nobody had told them that they were underperforming until it was too late and relationships had sufficiently soured to the point that they were irretrievable. Listening to this “noise” in the system led the HR Manager to take a systems thinking approach and rather than focus on the individual managers who were not dealing with individual underperformers, the root cause was identified as lying within the culture; it was a systemic issue.
A dominant theme in staff surveys was the friendliness of the place. Digging a little deeper, it seemed that most folks thought that “friendliness” and “performance orientation” were mutually exclusive. In other words, we can either have a friendly place to work or a workplace that focusses on effective performance; herein lay the barrier to regular and frequent conversations about performance at work. The systemic belief that addressing work performance would undermine friendly working relationships meant that it didn’t happen often or well enough. Our work was to assist a shift in the culture to one where “friendly and positive working relationships” were inextricably linked with “performance orientation”. Rather than dealing with the “problem” of managers who don’t deal with poor performance, the focus was on shifting the whole system so that by the end of our work, everyone was having robust, strengths-based conversations about performance all over the place without damaging positive working relationships. About half way through our year-long project, we joked with the executive management team, who were grumbling that their staff were now challenging them on their performance, that they would get what they asked for.
In both of these cases, systems thinking forces us to look at the whole, not the individual parts. It is the job of the modern manager to re-vision their function from one of “controller” to one of “steward”. The focus is on purpose, values and meaning. What does this business exist to achieve or create in the world? What values will guide us in doing this? How is this meaningful for the people who work here? It is the role of managers to ensure that the correct conditions exist for these things to be realised, not to tell people what to do.
Julian Wilson, owner of aerospace company Matt Black Systems uses a beautiful analogy in a MIX article on re-designing their business. To rescue a dying species, old thinking tells us that we should invest ourselves in an intensive breeding programme. New thinking says that we should focus our efforts on ensuring the environment in which the species exists is provided proper stewardship so that nature can take its course and allow the species to flourish. Eliminate the things in the environment which endanger the species, nurture those things which allow it to thrive.
If, as Daniel Pink suggests, people are truly motivated by the search for meaning, mastery and autonomy, these will come to us in an environment where the conditions allow these to thrive. Eliminating adminis-trivia and management power games is a start. This does not mean we leave people to do as they please. Leaders need to re-vision their roles as stewards of the culture. It is the culture, or the system, where managers can exert most influence and create the most opportunities for effectiveness, learning and transformation.
A lot of what is currently going on in businesses is not being talked about because it’s not part of the mainstream discourse. Something is no longer working. We feel it and we feel there should be another way. Systems thinking provides us new lenses to see deeper and wider. We must stop ourselves from repeating old mistakes and develop our abilities to think bigger so that we can go further. Hand in hand with this, we need also to develop greater ease with the complexity we will see before us and greater confidence to deal with being a little less certain about things. The effects of the system are there, whether we decide to look or not.
….and if you are someone who appreciates the power of systems thinking when others think you crazy, it can be useful to remember the words that Galileo reputedly uttered when forced by the Inquisition to recant his crazy notion that the Earth moved around the sun: Eppur si muove (and yet it moves).
September 23, 2012
Fresh from running a workshop on responsible leadership, I’m feeling buoyant that the participants entered into the conversation with gusto and were open to the idea that humans engage in their work because they seek out meaning, mastery and autonomy. To a large extent, I was not only preaching to the converted but taking the lead from them. Their work is based on a developmental, strengths-based worldview and they do it because they see the real difference that it makes to their clients. When I proposed that McGregor’s Theory XY and the work of Daniel Pink was providing us with a compelling case for re-visioning how we “do” leadership, there seemed to be general approval. They seemed thrilled that there has been significant theory and research on what makes work work. One person excitedly told the story of her previous workplace that had got to a crisis point, completely revamped its management practice and leadership approach by adopting a Theory Y attitude and turned their business around. Similarly, we at Quantum Shift are working with a client who also views people through a Theory Y lens and is in the middle of a deep transformation of how their business is organised and the light at the end of the transformation tunnel is clear and bright.
Then my heart sinks a little as I read in this morning’s New Zealand Herald, an article entitled “Fear, greed and vanity are excellent staff motivators.” I couldn’t resist reading, it tempted me in, much as those faux science documentaries in which the narrator at some point intones mysteriously, “Was Darwin wrong?” This invariably causes me to exclaim, “NO!” in frustration at the thrall in which ancient myths and fairy stories still grip us. To give the writer of that piece his due, he does start his argument with “in my opinion”, however we are on shaky ground if we base management and leadership of our organisations purely on opinion. Haven’t we learnt that research and study goes a long way to correcting long-held beliefs that get in the way of good practice?
He closes his article by saying, “…all other things being equal, an engaged workforce is more productive than a disengaged one – but the pyramids were built with the whip. We should not forget that.” Reminds me of that quote by Deming, “Beat horses and they will run faster….for a while.” While it may be that the pyramids were built with the whip (although I learnt when I was in Egypt recently that new archaeological discoveries are showing that it was not slave labour that built the pyramids after all), it also used to be the case that children were used as chimney sweeps, women were burnt at the stake for witchcraft and leeches were considered cutting edge medicine. While everyone is entitled to their prejudices (for that’s all Theory X is as far as I’m concerned), it’s more than a little frustrating when someone is given air time in the business column of a national newspaper to reinforce something backed by no evidence, bar his experience as a company liquidator. Theory X is one which is being challenged by contemporary research into what motivates people. If we take as long to update our perspective on this as we did to acknowledge that the sun is the centre of the solar system, I predict that it will take until the year 2110 before we find workplaces everywhere have at last unleashed people’s genuine desire to do something meaningful and that work will have long since ceased to be paid-for slave labour (or that we need gamification to help us pretend otherwise).
In the meantime, we still have conversations about how to motivate employees. Way back in 2006, a piece appeared in the Harvard Management Update entitled “Stop Demotivating your Employees”. It came out of some research that showed that when people join organisations they are initially enthusiastic, but that they very quickly lose motivation due to management behaviours and styles. This research, by the way, was conducted with 1.2 million employees at 52 businesses, so it’s not simply the opinion of the three authors. The question, then, is not about finding ways to motivate and engage people. It’s about letting them get on with it, stopping demotivating them.
Central to this is re-visioning the role of a manager. Much of what a manager does gets in the way and leads to situations where they then ponder how to motivate and engage. As Bob Marshall puts it in “Lay off the Managers”, we need management, but much of what managers do is dysfunctional. If we do away with the old Theory X prejudice and embrace the science behind Theory Y, the flow on from this is that the job of managing will look and feel quite different. Some of the things that go on in some of the businesses to which I consult include:
- Policies and procedures that try to mitigate for every possible contingency and overwhelm people with the sheer scale of information they are required to know before actually doing their jobs.
- Micro-managers who need to oversee not only what people do but how they do it.
- Command-and-control hierarchies that centralise decision-making away from the point at which the decisions could more ably be made.
- Managers who hoard power and operate out of a need to be in control of things (and when they can’t, sabotage the hard work of others).
As Deming states in this short video clip, “one is born with intrinsic motivation, self-esteem, dignity, cooperation, curiosity, a yearning for learning.” These are crushed out by “forces of destruction” throughout our lives. He wonders out loud, “Why crush them out? Why not nurture them?” Indeed. He goes on to say that mere change will not do it. ”We cannot just remodel the prison.” He is talking about transformation, not mere patchwork, not tinkering round the edges.
Backed by research, I believe that Theory Y is in an ascendancy, albeit a slow one (cf. Copernicus). Symptomatic of this, many managers have cottoned on to this new-fangled thing called “engagement”. It seems that some studies have shown that businesses with motivated and engaged staff are far more productive and effective at what they do. That’s pretty compelling. So in the name of creating happier workers, some go through a PR makeover, adopting some kind of newspeak so that people think things have actually changed. That, or they induce people and customers to “like” them by trying to make the same old work seem more fun and interesting. I’m not so sure this is transformation.
Deming talks about transformation as a new kind of reward, but not one that gives you points on a leader board, an extra staff party or an incentive bonus in your pay packet. He talks about restoring the individual. This kind of transformation will unleash the power of human resourcefulness contained in intrinsic motivation and which people are born with. That’s meaning, mastery and autonomy for you Daniel Pink fans. Or self-actualisation for you Maslow fans. Dispensing with extrinsic motivators and transforming business to release people’s intrinsic motivation can lead to less competition and greater cooperation which, in time, will lead to greater innovation, greater service, greater material reward for everyone, joy in work, joy in learning. There is the new kind of reward. Everyone will win in this transformation.
It truly boggles my mind that folks like the author of that NZ Herald article would consider themselves as hardworking and motivated by success yet presume others are inherently lazy, selfish and greedy. Certainly, these are human qualities and ones which we all possess in some measure. We are not slaves to them, however, and in my experience, under the right conditions, we will just as easily bring out the best of ourselves. Under the kind of conditions that model and condone laziness and selfishness, however, I can understand why would people would fail to engage themselves fully. Genuine transformation of business, therefore, is essential; this means a real systemic shift in attitudes and beliefs about people. Getting the “right conditions” for people to flourish is a pre-condition for them to bring their whole selves to work.
In my understanding of McGregor’s Theory Y, those marvellous things he outlines will come to fruition under the right conditions. This is important. The conditions must be right for people to flourish just as soil must be fertile in order for plants to flourish. If you salt the earth, nothing will grow; if you behave like Stalin (while spouting Theory Y newspeak for good PR), your people will disengage or leave or both. As I said, the question to be asking, then, is not “How can I motivate my staff?” but “How do I need to be so that I don’t demotivate people around me?” Some of it is related to transforming how the business organises itself, but this is inextricably linked to transforming ourselves: our beliefs and attitudes about human nature and how we relate to people.
What is required of us then?
Listening to people. Adopt the practice of genuinely listening to people. Acting on what you hear is part of this, too. Come at conversations with the mindset that they will tell you something you don’t already know, something which may challenge your own beliefs or something which may teach you a lesson. Turn off that inner monologue and consider their reality is just as valid as yours.
Enabling them to get on with it. There are a number of enabling behaviours I set out in a previous article, “Leaders: get out of the way”. I would strongly suggest it is more than behaviour change; once again, it is personal transformation that flows out of a meaningful shift in our beliefs and attitudes.
Acknowledging people. This is not about praise. Managers who steal the credit for good work are demotivators. Acknowledging means giving people their due and recognising the contributions they make to the whole. It means noticing when people have been of good service to others. It means assisting people to see that their unique contributions and who they are add something invaluable.
Facilitating the easy flow of information and unimpeded access to the proper resources to do the job. At a very basic level, a manager would do well to see themselves as the one who eases and unblocks information flow. Hoarding information is an act of the power-hungry.
Enrolling people into a vision of something greater than the sum of everyone’s daily tasks. Declaring a clear purpose for the business, apart from increased shareholder return or higher profit. Keep hold of a single-minded purpose and make sure everyone has a clear line of sight to it. What is your business contributing to the well-being of the world?
If the author of that NZ Herald article was moved to write what he did because he has witnessed indolence and selfishness in the workplace, I would suggest that it has as much to do with the kind of cynicism people bring to work when they witness their managers exhibit the same cynical behaviours and attitudes. That Harvard Management Update found that people start a job full of enthusiasm, which, like Deming, I would say is our default setting. The rot sets in when systemic inhumanity within the business infects them and their natural motivation is crushed. I would also suggest it has much to do with organisations which have not put “the right conditions” in place that would allow creativity, autonomy and responsibility to flourish. It’s also to do with managers and leaders who hold on to an obsolete view of human nature. So it’s no surprise to me that a company liquidator would encounter people who do their best to be their worst.
July 18, 2012
In “Cat on a Hot Tin Roof”, Big Daddy bellows in exasperation, “Ain’t nothing more powerful than the odour of mendacity.” Recently diagnosed with cancer and fed up with the secrets and lies of family life, he begins to see that there is nothing lost in airing the truth. Perhaps many of us when faced with the finality of a situation in life realise that there was much left unsaid that, had it been expressed, would have been to everyone’s benefit. Had we acknowledged our trepidation and named the elephants in our various rooms, standing up for integrity and truth, we might have cleared the air of the stench of mistrust and enjoyed a much more honest life. In fact, in a recent article, the number one regret of the dying was identified as: ”I wish I’d had the courage to live a life true to myself, not the life others expected of me.”
In light of the many recent revelations of systemic corporate greed and mendacity, I have wavered between despondency, fury and hope. Should I give in and hone my deceptiveness skills: both to myself and others? Should I play the game just because others will be disappointed if I don’t or, at the risk of incurring their wrath, express my misgivings, doubts or hesitation? Should I just give up hope that we will find people worthy of the title “leader”? Should I join those manning the barricades of the Occupy movements? Alternatively, should I remain hopeful that those who fiddle while Rome burns will soon be swept aside in a tide of genuine democracy and that our organisations, businesses, communities will be driven by the people within them rather than some out-of-touch elite? Should I rejoice that, at last, some of those in positions of power are naming corporate greed as systemic and not simply driven by “a few bad apples”. Are people finally getting it? It is a human dilemma: conform or be crushed by a corrupt system.
Furthermore, as Fintan O’Toole suggests, “All the evidence from the many scandals of recent years is that it is not sociopaths who create rotten cultures. It is closed, arrogant, unaccountable cultures that turn ordinary people into sociopaths.” Deming said as much some years ago.
So many times over recent weeks as I read of the fraudulent practices of GlaxoSmithKline, the UK Conservative Party, the New Zealand Immigration Service, Barclays Bank and most recently, HSBC, have I found myself remembering Deming’s comment that 95% of possibilities for improvement sit with the system and only 5% lie with the individual. I also hear myself muttering that a bad system will defeat a good person, every time. EVERY TIME. We are seeing this before our eyes.
I received a subscription email that propounded the notion that we thrive when our ratio of positivity to negativity is high. I have no beef with that notion. However, it went on to link to articles in the press that “demonstrated” how things are looking up and we are back on the road to recovery and everything is alright, if we would only stop feeling negative about things. Made me want to vomit. There is a word for folks like this: Pollyanna. I know people like this, some of them apparently working in the real world of organisational life with a view that if we only just thought lovely things, it would all be OK. The truth is: the world, including the business world, is in a parlous state. No amount of positive thinking can erase the fact that some of the world’s major industries and corporations are systemically sick. No amount of soma will make me blind to the fact that those in positions of power remain inert in the face of corporate malpractice, environmental degradation and growing inequality. No amount of media distraction will divert me from the evidence that our democratically elected “leaders” are in the pay of lobbyists and their corporations who answer to nobody, bar their shareholders. I’m not just having a moan and I’m no Eeyore; I have a good life and count myself exceedingly fortunate that my worries are mostly first world problems. Think you have worries? Enter your annual salary in the global rich list website and see where you place relative to others in the world. If you are reading this, life is probably pretty good for you, on the whole.
However, we are an important juncture in human history. Our institutions have lost the trust of those they purport to serve. Many of our businesses are resorting to gamifying their marketing in an effort to soma-tise potential customers. Many of our workplaces are likewise trying to hypnotise people that their meaningless work is fun fun fun.
I take heart that there are businesses like Morning Star, who base their organisational effectiveness on self-management and not some lumpy hierarchical management structure that insists “it knows best”. I take heart that the Beta Codex Network, of which I’m an associate, is out there, promoting a saner and more humane (and frankly, much more sensible) way of structuring organisations by advocating for radical transformation, rather than tinkering round the edges, to achieve real effectiveness, meaning and joy at work.
I am entirely sure I am not alone in my disdain towards fraudulent business practice. The aptly named Bob Diamond, ex-CEO of Barclays Bank infamously told British Members of Parliament last year, “There was a period of remorse and apology for banks and I think that period needs to be over.” However, as Andrew Rawnsley has written recently, “he was wrong: plenty more remorse and apology would be appropriate, and welcome; but much more importantly, the values, culture and practices of finance, as they have developed since the ‘Big Bang’ reforms of 1986, must be torn down, and a smaller, humbler, simpler world of banking built in their place.”
To be honest, I’m not interested simply in apology and remorse. These things are worthless without some kind of follow up. If someone apologises, I expect an associated change in behaviour and attitude that demonstrates the apology was genuine, heartfelt and indicative of real responsibility-taking. I’m mostly interested in what Rawnsley suggests with regards a tearing down of the values, culture and practice of finance. I’m similarly interested in a transformation of business. I’m interested in businesses selling products and services that are actually worthwhile. I’m interested in businesses that actually provide interesting and meaningful work for people. I’m interested in businesses that run on the premise that people are humans, NOT resources. I’m mostly interested in business that operates with transparency, honesty and humility. Not just a PR job that makes us think these are the values, but that these are the values that are REALLY lived throughout the business; even, if not especially, by those who manage it. Even Bob Diamond, in a BBC lecture last year, said, ”Culture is difficult to define. But for me the evidence of culture is how people behave when no one is watching.” Couldn’t have put it better myself.
Business leaders are not going to changes things simply because they come under fire in the media or are told that it is wrong. They already knew it was wrong and they did it anyway. The structures of how business is managed create the sick cultures in which they operate. Cultures are not transformed by mere criticism nor by symbolic public witch-hunting.
It is clear to me that the fraudulent practices that have recently come to light are systemic. The “few bad apples” defence, as Andrew Rawnsley has written, will not wash. What happened, happened because the system allowed it, condoned it. Those who make the rules not only fell under the thrall of high finance, they were well and truly in its pockets. As he goes on to say, a college student, with no previous convictions, was imprisoned for six months for stealing a £3.50 pack of bottled water during last year’s London riots. Yet there is serious doubt whether it will be possible to prosecute banksters who perpetrated a massive con involving sums which would buy many millions of bottles of water.
Just as “a few bad apples” does not placate those who watch these scandals with disgust, the opposite also does not give comfort. The suggestion that there are individually decent and compassionate people within these rotten systems and that this should give us hope things will change, is just as false. The system is responsible for 95% of what goes on in it. The system must be reformed, transformed, root and branch. Utterly. Totally. Absolutely. It is the system.
Surprised at these revelations of corporate fraud? Not much. The systems which brought the financial crisis and scandalous corporate behaviour to bear have not changed. The same dynamics are in place, the same values intact, the same practices perpetuate. The question that Plato posed in his tale of the Ring of Gyges was whether a moral person would remain moral should they become invisible. To all intents and purposes, the practices of bankers and the nod-and-wink agreements made over lobbyists’ drinkies are invisible and mysterious to most of us. Let loose to do as they please in the 1980′s, what would constrain banksters to behave in a moral fashion? Reliant on corporate donations, what would cause politicians to change the immoral rules which their paymasters rely on?
Public enquiries, the odd sacking, stripping a Fred Goodwin of a public honour or the symbolic prosecution of a Bernard Madoff, while just, are simply public relations band aid solutions to deep seated problems. If the system remains intact, people will continue to act within its rules, treacherous though they may be. Having said that, those who stewarded those rotten cultures must be removed to make way for those who have the nerve to re-boot their systems and establish morality within business and government. Rotten cultures, as Will Hutton has observed, do not emerge from thin air. They emerge from structures which encourage and condone rotten behaviour. Similarly, moral cultures will also not arise out of thin air.
To be truthful, I’m not depressed by recent revelations of this institutionalised fraud and business improprieties. To me, they are the lancing of the boil that needed to happen. It is a wake-up call to actually look at the system and craft new ones for the 21st century. Vince Cable, UK Business Secretary, pointed to the Swedish business bank, Svenska Handelsbanken as a model of how things could be. Like Cable, I am a long-term optimist and a believe that these scandals will eventually lead to better systems.
Trying to apportion responsibility for these scandals on a few rogues ignores the reality that the systems within which these folks operated are broken. News International, Barclays Bank, GlaxoSmithKline, the New Zealand Immigration Service, HSBC. The politicians of all hues whom we elect to represent and stand up for our interests are overly chummy with the financiers, the corporates and the media who are being tagged with the epithets ‘immoral’ and ‘deceitful’. Are we really all in this financial crisis together? I think not.
My hope is that all these dishonest practices will eventually herald the time of the moral business. It is time for the way we do business to be re-booted. It is time to start doing the right things, not the wrong things righter.
What is the moral business?
A moral business orientates itself to its customers, its staff, its environment, its community and its shareholders, not just its shareholders. A moral business orientates itself to doing good, not just for those at the top whose enormous bonuses ensure their collusion with a system that is focussed more on quick profit than innovation-generating benefit for the wider economy. A moral business takes hold of the bigger picture and takes a long-term view of what business success means. In other words, it will see that deifying shareholder return is not how to run an organisation that serves all of its stakeholders, nor contributes to sustainable human development.
I don’t believe that anyone seriously gets into business to do wrong or sets out to be intentionally deceitful or immoral; I have a higher view of humanity. But when we find ourselves in sick systems, we struggle to swim against their tide. If we want our businesses to do the right thing, maybe it’s time we put our foot down and started naming some of those elephants. Let’s also look out for those leaders who have the courage of their convictions to do the ‘hard thing’ and reform capitalism.
Mendacious times, indeed.