by Yves Morieux
Step Three: Capture the Benefits
Once you have understood the context that shapes behaviors and thus affects performance, you are in a good position to change that context.
Change the Context
Use the simple rules as guidelines to identify ways to change the context of goals, resources, and constraints so that full engagement and cooperation become individually useful for those involved, as follows:
Simple rule one: Understand what your people do. This rule adds an understanding of context to the manager’s resources.
Simple rule two: Reinforce integrators. This rule reinforces managers as integrators by removing some of their constraints (such as bureaucratic rules, intermediary roles, and coordinating functions) and increasing their resources (such as room of maneuver and discretionary power). It adds to employees’ resources by allowing them to benefit from the cooperation of others.
Simple rule three: Increase the total quantity of power. This rule adds resources to those who currently disengage and avoid cooperation because they have more to lose than to win by coming out of isolation. They are provided with new power bases derived from the control of important stakes.
Simple rule four: Increase reciprocity. This rule changes goals or problems by defining rich objectives and removes the resources that create internal monopolies or fuel dysfunctional self-sufficiency.
Simple rule five: Extend the shadow of the future. This rule transposes remote consequences into people’s goals today and turns insufficient cooperation into a constraint for those who do not cooperate.
Simple rule six: Reward those who cooperate. This rule makes it individually useful for everybody to be transparent about, and to exploit, all possibilities for improving performance.
As seen in the previous chapters, the practical implementation of the simple rules to create the right context entails changing various aspects of the organization such as budgeting, investment, objective setting, information systems, evaluation and reward criteria, career paths, the scope of roles and decision rights, hierarchical links and layers, recruiting and training for new skills, and others. These solutions use the classical building blocks of organization. The key difference is that you will end up only with those necessary and sufficient to deal with business complexity.
Before cracking open the champagne, however, you need to do something else: commit to the performance improvement that can now be realized as a result of the new context.
Raise Ambitions
In step one, you asked people to describe the positive impact that cooperation would have on results and they responded with specifics—“I could cut my inventories by 15 percent if procurement would …”—and they also agreed on the ways to make cooperation happen.
Based on those conversations, it now makes sense to upgrade performance targets: 15 percent lower inventory levels (or shorter time to market, increased sales levels, improved customer satisfaction, and so on).
Sometimes people will not spontaneously or immediately agree to these commitments. Don’t worry. You can always go back to the drawing board: “Did we exaggerate or make mistakes when we first projected performance improvements based on cooperation from others? Did we overlook some obstacles or solutions?” Because of the contexts set up by the six simple rules, there is nothing potentially complacent in these conversations. They are all opportunities to better understand reality.
Your action plan has three important features:
Problems are depersonalized. No individual or group is made to feel guilty because of personal traits or psychology. All understand that the work context is the issue, not any one person or group. This approach removes the obstacles to change that would be triggered by the denial (of the diagnostic, of the root causes, and so on) of those who would otherwise feel under personal attack.
Change is not anxiety-provoking. Any changes proposed will not have come out of the blue or be conceived in an ivory tower. They will not be threatening, because everyone knows they address real issues. This removes the obstacles to change relating to misunderstanding.
Buy-in is built in. It will not be necessary to sell the solution at all costs via corporate communication campaigns (or compromises) once its design has been finalized. Because solutions are developed in full knowledge of the context—why people do what they do—they incorporate the conditions for successful implementation.
By discovering together how cooperation can improve their performance, people create a context in which they enable and impel each other to realize these improvements. (See the sidebar “Three Steps from Pain to Performance.”)
SIMPLE RULES TOOLKIT
Three Steps from Pain to Performance
1. Mutual Discovery of Where and Why Cooperation Matters for Results
Where are the pain points in performance and in satisfaction at work?
How does each function affect the ability of others to do what they have to do?
What would effective cooperation look like from each actor’s perspective?
What difference would it make on each actor’s results and overall performance?
2. Joint Diagnosis of Obstacles
What are the differences between what happens and the ideal cooperation we have described?
Why do people do what they do?
3. Co-definition of Changes and Resulting Higher Ambitions
How can we use the simple rules to change the context so that cooperation becomes individually useful (a rational strategy) for people?
What enhanced targets can each of us then commit to?
The Day-to-Day Battle against “Best Practices”
To improve performance by managing complexity while avoiding complicatedness, you will find yourself up against the decades-long accretion of business theory that has turned management into an abstraction and that has abstracted management from its real job.
As we have seen, some of the abstractions will typically creep in around the following:
Reporting lines. Endless arguments may occur about the pros and cons of different types of reporting lines—full, dotted, or bold—as if the dotted line has dotted power to obtain dotted behaviors, and fuller behavior is achieved by the fuller power of the fuller line.
KPIs. You may find yourself mired in debates about the respective weight that each of your fifteen or twenty KPIs should have, as if by getting the right weighting and associated incentives, behaviors will end up precisely where the weighted average of the formula lies.
Leadership styles. The organization may deliberate on the mix of leadership styles needed in the management team. The assumption seems to be that it can decree leadership styles to leaders in place or import them by recruiting people who supposedly embody those styles, while, in fact, people adjust their style (the way they do what they do) to their context.
While these abstractions may be intellectually seductive, they are deceptive in practice. An intellectual organization is not the same as one that harnesses the intelligence of its people. To create that kind of organization requires an authentic presence of management as well as material feedback loops such as those we have described here. To have an authentic management presence, you have to regain direct knowledge of operations and escape the abstractions and symbols that are meant to represent work—structures, procedures, KPIs, and the rest—but that push management to the periphery of work.
Do not accept this fate. You do not have to live in a world of abstractions. You need not spend your time wracking your brain about how best to reshuffle the boxes or draw the lines in the org chart. You can deal with the real content of the work, rather than just its container, by constantly and relentlessly asking simple questions:
What role do you expect this manager to play?
What value is the manager supposed to add?
What is the manager supposed to make people do that they would not spontaneously do? (Remember this is how managers add value. When people spontaneously do what they need to do,
then there is no need for managers.)
What power basis will the manager have?
The more organizations harness the power of digital technologies, disperse globally, and operate in virtual teams, the more we need to shed light on what has become increasingly obscured: the actual work real people do. Connecting to the materiality of work is both challenging and essential. Understanding the context within which work happens is a way to see the reality, which is precisely what is filtered out or obscured by visions of the supposed pros and cons of structures, processes, and systems (the hard approach) as well as stories about personalities and sentiments that turn against people (the soft approach).
This return to work on the part of management is not an intellectual or philosophical pursuit. It is a practical effort to understand the way people get things done so that you can help them make the most of their judgment and energy. Nor is this management presence a form of micromanagement or a quest for the kind of control that the hard and soft approaches supposedly make possible. Such attempts at controlling the individual become all the more damaging as business complexity increases and only fuel complicatedness. The greater the business complexity, the more you need to rely on people’s judgment. The six simple rules show that such reliance can be much more than just an act of faith; it is a reasoned course where your intelligence and energy will make a difference.
Notes
Introduction
1. These simple rules were first published in Yves Morieux, “Smart Rules: Six Ways to Get People to Solve Problems Without You,” Harvard Business Review, September 2011, pp. 78–86.
2. The BCG Institute for Organization counted these performance requirements by means of a content analysis of annual reports. We measured and compared the frequency with which different kinds of performance requirements were mentioned as part of the goals, targets, and challenges described in the reports. The complexity index is the average across all companies of the number of performance requirements, set at base 100 in 1955.
3. The BCG Institute for Organization calculated this index using regression and main-components analysis (the Partial Least Square Path Modeling, or PLS-PM, algorithm). The algorithm was applied to organizational elements such as the number of procedures, vertical layers, interface structures, coordination bodies, scorecards, and decision approvals across the surveyed sample of companies.
The effect of the increase of complicatedness is not only striking for the top quintile. On average, the proportion of people spending more than fourteen hours per week in meetings has more than doubled over the past fifteen years to 40 percent. And these people consider over half of this time to be useless. The time spent per month writing reports has also increased by 40 percent on average. The number of e-mails received per day has increased threefold in this period, while the proportion of e-mails with ten or more recipients has more than doubled. On average, people receive thirty-five internal e-mails a day that they find useless. In this period, the number of interface roles people considered useless has doubled, on average.
4. Based on our analysis, size explains only 0.0001 percent of complicatedness, and the diversity of activities explains only 0.0002 percent.
5. The BCG Institute for Organization found that the negative relationship between complicatedness and people’s sense of engagement at work (negative 0.606) is stronger than the positive relationship between engagement and the combined effect of factors that are intended to mitigate problems at work, such as caring leadership, participative management style, strong friendships, and mutual support at work (positive 0.533). The analysis uses the ten-year proprietary BCG “Engaging for Results (EFR)” survey, which has been administered to client populations since 2002, with more than 1 million survey responses from 229 companies in 85 countries. We are not suggesting that structures, processes, or systems are more significant than the soft factors in shaping morale. We do believe, however, that we must stop underestimating the effect of organizational complicatedness. This is especially important because the soft approach only treats the symptoms—particularly people’s psychological and emotional states—rather than getting at the root cause. The effect of structural complicatedness on employees’ morale was identified more than a half century ago by James C. Worthy. Since then, however, it has been largely neglected. Based on his study of several different units in various geographic locations of Sears, Roebuck and Co., Worthy established the negative effect of a complicated organization—notably the number of vertical layers and burdensome coordination devices—on “both operating efficiency and employee morale.” See James C. Worthy, “Organizational Structure and Employee Morale,” American Sociological Review 15, no. 2 (April 1950): 169–179.
6. The percentage of Americans satisfied at work was 45.3 in 2009 and 42.6 in 2010. There is an obvious downward trend since 1987, the first year the survey was conducted, interrupted by periodical “bumps,xE2x80 x9Din The Conference Board’s words, every two to three years. See Rebecca Ray and Thomas Rizzacasa, Job Satisfaction: 2012 Edition, The Conference Board, Research Report TCB-R-1495-12-RR, June 2012. According to Gallup surveys, only 28 percent of the US workforce is engaged at work, the rest being actively disengaged or “merely” not engaged. In Europe, the highest scores for engagement do not exceed 23 percent (Switzerland and Austria). Surveys show similar results for Japan and Australia. See “The State of the Global Workplace,” Gallup Consulting, 2011, http://www.gallup.com/strategicconsulting/145535/State-Global-Workplace-2011.aspx.
7. See Robert T. Golembiewski, Robert F. Munzenrider, and Jerry G. Stevenson, Stress in Organizations—Toward a Phase Model of Burnout (New York: Praeger, 1986); and David Courpasson and Jean-Claude Thoenig, When Managers Rebel (Basingstoke, UK: Palgrave Macmillan, 2010).
8. Productivity is the ultimate arbiter of our standard of living. Nobel prize-winning economist Paul Krugman makes it clear: “Productivity isn’t everything, but in the long run it is almost everything.” See Paul Krugman, The Age of Diminished Expectations 3rd ed. (Cambridge, MA: MIT Press, 1990, 1997), p. 11. In the United States, thanks to productivity improvements in the fifties, sixties, and early seventies, each generation was almost twice as well off as the preceding one. But productivity growth since then has suffered a long deceleration, interrupted only by a brief rebound around 2000 followed by a period of higher volatility. Since 1995, Japan’s productivity growth has been about half what it was in the period 1973 to 1995. Across the fifteen largest European economies, productivity growth has declined by more than a third in each decade since the seventies. One consequence is an attempt to protect standards of living by taking on more debt, with all the risks—at the financial, economic, and social levels—that overleveraging entails.
9. For instance, the Australian Institute of Management reported in its 2010 survey of more than three thousand managers that 36 percent said they could put in more effort but instead were being “lazy” because they are “unhappy” in their jobs. See “Unhappy Managers Admit Slacking Off,” Australian Institute of Management, November 30, 2010, http://www.abc.net.au/news/stories/2010/11/30/3079939.htm.
10. See “Hating What You Do,” The Economist, October 8, 2009, http://www.economist.com/businessfinance/displaystory.cfm?story_id=14586131.
11. Scientific management was pioneered by the works of Taylor and Henri Fayol at the start of the twentieth century. But it should be said that Taylor based his new way of management on actual observations of what workers did. He realized that misbehaviors such as soldiering and slacking off were a consequence of the poor organization of work—based on craft traditions at odds with the demands of mass production—and not of the workers’ ill-will or lack of commitment. This realization of the interplay between how work is organized and the resulting behaviors was at the heart of the new principles put forward by scientific management. Fayol based his way of administering and managing firms on his own experience of reviving a failing company. Despite all the limitations of scientific management to d
eal with the new complexity of business, illustrations of which abound in this book, there was something very valuable in Taylor’s approach: paying attention to people’s work, what they really do. As Peter Drucker made clear, this is precisely what we have forgotten, but it is the primary and timeless lesson of Taylor.
12. The human relations movement unfolded in the wake of Elton Mayo’s work on the so-called Hawthorne studies at Western Electric in the late 1920s. The seminal account of the Hawthorne studies is F. J. Roethlisberger and W. J. Dickson, Management and the Worker: An Account of a Research Program Conducted by the Western Electric Company, Hawthorne Works, Chicago (Cambridge, MA: Harvard University Press, 1939). The initial impetus for the human relations movement was to better control the “human factor” that Taylor seemed to have tackled in an overly mechanistic way. The goal was to further improve performance viewed as a by-product of positive feelings and friendly interpersonal relationships within the informal group. At the root of the human relations movement is the desire to save the workers from themselves. This desire relies on the more or less explicit assumption that employees are fundamentally irrational and that their behaviors are driven by emotional stimuli that have to be contained, channeled, and thus controlled. See, notably, Kyle Bruce and Chris Nyland, “Elton Mayo and the Deification of Human Relations,” Organization Studies 32, no. 3 (March 2011): 383–405. In that case, it is not the financial stimuli that are supposed to trigger alignment (as in scientific management), but the emotional stimuli pulled forth by managers bestowed with the appropriate leadership style. In both scientific management and human relations, there is a Pavlovian view of behaviors: what matters is finding the right stimuli, be they financial or emotional. How to best mobilize people’s intelligence is not the issue in either. The long-lived success of the human relations approach, despite its lack of robust analytical ground, has been explained by the fact that it flatters management and justifies the use of the most comfortable levers available: as Michael Rose has written, “What, after all, could be more appealing than to be told that one’s subordinates are non-logical; that their uncooperativeness is a frustrated urge to collaborate; that their demands for cash mask a need for your approval; and that you have a historic destiny as a broker of social harmony?” See Michael Rose, Industrial Behaviour: Theoretical Development Since Taylor (Harmondsworth, UK: Penguin, 1975), p. 124. This form of applied psychology provides management with a license to address the human factor and treat particular psychological traits.