They always ask everybody else for their opinions without giving their own.
They keep a poker face.
They express no opinion, but ask questions that lead the person to reach their own decision.
They always leave with a “well you decide” or “so you decided that”.
Managers and CEOs are used to telling people what to do and employees expect their superior to make the decision. Giving employees ownership and responsibility is a reversal of this custom.
Despite this, managers and CEOs usually have more experience and can often predict which decisions are likely to be disastrous. It is necessary for them to decide whether this could be a learning experience or dangerous for the employee and the company. If they feel it will be a learning experience without any long-term damage, then it is better to let the employee make the mistake. However, if the decision could damage the company then it is worth leading the decision maker to a different conclusion by asking some searching questions.
v. Strategy
There are two ways to decide and implement strategy. From the top down or the bottom up.
Top down strategies carry the same risk as that set out earlier in the description of dictators – the success of the company is reliant on the quality of the CEO. Also, they will not necessarily get support from those who are tasked to implement them.
One alternative is the traditional bottom-up approach, where employees suggest strategies that are then sent up the ladder for the CEO to decide. This has the advantage of getting input from those at the ground level as well as a diversity of ideas but can lead to disappointment and lack of support if the decision from ‘on-high’ does not take account of some of the ideas passed up the chain.
As part of our WEIRD process we are implementing a strategic process to start at the bottom – and stay close to the bottom.
Our first step was to set out the corporate strategy. Previously we had vision statements and company goals – but as these were created by myself and a few managers, it is unlikely that anyone else in the company could tell you what they were. So, we changed it to two simple company goals:
‘Enjoy ourselves’ and ‘Make money’ (in that order).
A few of us discussed creating a more comprehensive and focused corporate goal, but it became clear that in so doing we would set limits on each individual’s goals.
We ask each individual to set out a strategy as to how they can contribute to the units within which they have joined. Each team then joins those individual strategies to others, creating a strategy for each unit. This is assisted by listing the skills and goals of each unit member. The unit then reviews these and decides what can and can’t be achieved and where goals coincide. From this, the goal of the unit is established and projections and budgets calculated.
The goal is then shared with other units, and written feedback can be given by any other individual or unit wishing to make suggestions, offer their services or point out where units can coordinate activities.
Thus there is no need for a company-wide strategy. In fact, by not pushing the strategic decisions up the chain, it is apparent that the buck stops at unit level. If a unit is doing something that is detrimental to another unit, first it is likely that some individuals will be on both units and will point this out at an early stage; and secondly, by communicating directly, units will find a better solution than one imposed from above.
And the financial goals of the company as a whole? These are made up from the sum of the parts. There is no point in management making a multi-million-dollar arbitrary target when a far more realistic estimation can be made by those who have to implement it.
As to the strategic goals of the company, likewise trust needs to be given to the units so that they will coordinate sufficiently to build a sensible overall strategy. There may be no stated overall company goal but the conglomerate of unit goals will be flexible enough to change, direct enough to implement and probably more profitable than any strategy imposed from above.
If it is clear that a strategic goal of the company is missing – this is easy to resolve by creating another unit to fill the hole. Employees and managers do not have to be re-oriented, budgets do not need to be re-done and new strategic goals do not need to be communicated.
American football coach, Paul Bryant, explained the advantage of keeping strategy at a team, rather than company level: “A good, quick, small team can beat a big, slow team any time.”
vi. Ownership of the business
It will come as no surprise that one way to encourage employees to feel responsibility and ownership of their work is to make them owners of the business.
Whether this takes the form of stock options, shares, cooperative shares, partnership or any other form of ownership doesn’t really matter. It is preferable if the employees (or a designated committee of employees) choose the structure of ownership or at least have the power to change the structure if they see fit. The CEO, CFO and any other major shareholders should not decide how that structure is formulated, otherwise employees may feel that they have been manipulated.
A fair rule of thumb to provide genuine ownership is to provide 25% of shares for employees.
Prior to shares being traded publicly, owning shares in a company when there is little or no market to trade them makes it difficult for employees to see their value. If the company has a clear goal to undertake an IPO at some set point, they automatically take on a higher perceived value. Otherwise, the value of the shares will only be realised if and when the company gets acquired.
Until this point, the quantifiable value of those shares rests in paid dividends. However, paying dividends when the company is focused on growing is counter-intuitive as profits should be invested in further growth. Paying a small dividend provides an unexpected bonus for employees at the end of the year. With transparency, the employees will understand that they are being rewarded to the detriment of profits being ploughed back to fuel growth. Better still, ask the employees to choose whether to pay a dividend or not – after all, they are part owners of the company.
One thing that always bemuses me is companies that give share options to employees that can be retained after the employee leaves the company. Why would you want an ex-employee to hold shares? Shares should be owned by those with an active interest in the company, not those that are moving elsewhere. As a result, when an employee leaves our company they no longer own shares or have options in the company. In some cases, this is linked to a pay-out formula, but in most it is not.
The tools that I have mentioned above help put people in the right frame of mind to follow WEIRD practices. It is worth reinforcing again – these tools are not goals in themselves, but rather a structure in which WEIRD can flourish. I have added a summary of them below:
Table 6.1 Summary of WEIRD practices
WEIRD Practice
Summary
In and Out
Recruitment Process
Take enough time to get to know any candidate and let them know the company. Check skills but concentrate on getting to know their attitude and what is important for them.
Conflict
Any conflict needs to be resolved by those affected through a conflict process.
Dismissal
Is the person in the wrong role? Poor performance arises from a bored employee. Removing responsibility will create worse performance, so increase responsibility before any dismissal.
Performance and Rewards
Transparency of Salaries
Required for all employees to make investment decisions as salaries account for a major part of costs. Transparent salaries remove conflict and gender discrepancy.
Deciding Own Salaries
Salary formulae will always work for some, not others. Allowing people to choose salaries will remove a demotivator. Peer pressure should ensure salaries do not get excessive.
Evaluation and Appraisals
Honest feedback is required for people to
improve. Regular evaluations for everybody are part of this.
Team Working
Seating Plans
People like routine and who they sit next to but getting people to mix brings great communication benefits.
Avoiding Stars and Egos
Teams are far more productive than stars. Get rid of stars who don’t want to be part of the team.
Organisation and Teams
If possible remove departments and focus on teams based around projects and products. Allow people to join and leave teams according to the value they feel they can add.
Ownership and Responsibility
Transparency of Company Financial Information
Employees have to understand all of the financials of the company to make even the smallest decision. People don’t need to be shielded from information. The more information employees possess, the more informed the decision.
Company Policies (Holidays, Expenses, Flexi-hours, Place of Work, Training)
No company policies are required. Trust employees to be reasonable and not leave their colleagues in trouble. Employees can better decide where to work, training etc. than managers.
Roles vs Tasks
Aim to focus on tasks, not roles. People get stuck in roles, whereas tasks come and go.
Decisions
Allow and encourage employees to make decisions by getting advice from colleagues.
Strategy
Let the strategy flow from bottom-up, not top-down.
Ownership of the Business
Giving shares to all employees breeds ownership. Ownership is the strongest motivator.
Setting up WEIRD practices is a hard job to start. It is even more difficult to keep people following these practices.
G)
CHANGE, REINFORCEMENT AND GETTING EVERYBODY ON BOARD
“A leader is best when people barely know he exists; when his work is done, his aim fulfilled, they will say: we did it ourselves.”
Lao Tzu – Ancient Chinese Philosopher
The ironic thing about trying to get each person in a company to take responsibility for themselves is that sometimes the CEO needs to be an autocrat to make this happen.
I have also mentioned that implementing WEIRD requires the CEO to be fully behind the idea of letting go of control.
The problem is to marry these two concepts. The CEO needs to know when to be autocratic and when to relinquish control.
Implementing WEIRD requires a CEO and managers to exercise a high level of Emotional Intelligence and understand how each employee is likely to perceive a comment. Some employees will embrace self-management more than others – they will be more likely to accept a suggestion as advice that can be ignored. Somebody who is less confident will perceive the same suggestion as an order.
Therefore, learning the art of staying silent (especially around less confident colleagues) is a key skill.
Changing a traditional organisation to one of self-management cannot be achieved by words alone. From our experience, the tools above help employees and managers to start to think differently.
However, it is important not to swap one system of control with another. When a colleague says, “We haven’t done it the WEIRD way” I still need to explain that there is no single ‘way’ but rather an openness in mentality which people can use to achieve their goals.
That said, people do like structure. If you removed all structure and told people to be responsible for themselves, they wouldn’t know what this meant or how to do it. This is the difficulty in practising WEIRD. The company needs enough structure to provide security whilst ensuring that there is enough flexibility to allow those who can to soar. There is no simple or prescriptive answer. As always when trying to make a change, it is worth finding a few disciples and build from there. Timing is also key. There are times when changes can be pushed through and times when people need to be allowed to adjust.
There is no right and wrong way to implement self-management or WEIRD. The next two chapters of this book include some weekly blog posts that I wrote in the first six months of Pod Group’s change to WEIRD. This is a – but not the – way to do it. Not least because we made a lot of mistakes (which I will highlight), but most of all because a company is made up of individuals – and any change needs to be oriented to those individuals.
There is no moment that a company can say it has succeeded in implementing WEIRD (or any other methodology of self-management). However, it is well on course when employees organise their own company-wide meeting and decide how investment decisions should be circulated and reviewed. This is also the moment at which, as a company owner, you realise that you no longer own the company. As a CEO you realise that you are now co-CEO, with all of your colleagues and you will accept decisions that you would not have made.
H)
WOMEN AND WEIRD
“Whatever women do they must do twice as well as men to be thought half as good. Luckily, this is not difficult.”
Charlotte Whitton – Ex-Mayor of Ottawa, Canada
One of the side effects of WEIRD is that it overcomes some of the disadvantages experienced by women at work.
A study on Emotional Intelligence by the Korn Ferry Hay Group analysed data from 55,000 professionals from 90 countries. In 11 out of 12 Emotional Intelligence competencies, women showed greater levels of Emotional Intelligence than men (in the 12th, women and men were the same).[cii]
Teams work best when the team members display higher levels of Emotional Intelligence. As females are shown to have higher levels of Emotional Intelligence than males, we actively seek female colleagues and, despite being in a male dominated industry, we keep a fairly good 50/50 ratio.
One of the tools we implemented to encourage self-responsibility was transparency of pay. This has an intended side effect – equalisation of gender salaries. In our main office, women earn on average about 15% more than men mainly because many of our female employees are in more senior positions than the men.
So why does the gender pay gap still exist in many companies? Generally, we have seen that, at the interview stage, if a man is asked whether he can do something – the answer is almost always a resounding yes (despite no forethought or experience). When a woman is asked the same, she will look back at her experience and reflect on whether she has done something similar before. Men sell themselves harder at the interview stage, which includes demanding more money. Most companies are trying to get the most value for the least money, so if a woman asks for less than a man (or less commonly, vice versa) – the company doesn’t object.
This is a false economy because, at some point, the woman will find out that she is paid less than a male colleague for the same job. At this point motivation is lost, a bitter environment created and eventually the team’s performance will fall.
With transparency of salaries, if women are paid less they are armed with the information to demand equal pay. If the company does not provide this then, at best, trust in the organisation will be eroded. At worst the company is opening itself to potential legal action.
One of my female colleagues recently wrote a blog on how we need to increase the proportion of women in technical jobs. Perhaps she should be careful as to what she wishes for. The jobs that are more likely to be lost to Artificial Intelligence are those which are more process driven with less requirement for Emotional Intelligence, ie jobs predominantly held by men.
This chapter has provided an overview of how it is possible to implement WEIRD practices, but the reality can be very different. The next chapter covers the change to WEIRD within Pod Group. It wasn’t always easy but, drawing on blogs that were written at the time, I aim to present a realistic picture of the pitfalls and successes that we went through during our change process.
7. DESTROYING THE OLD POD WORLD
“To destroy is always the first step in any creation.”
E. E. Cummings
A)
THE COMPANY – POD GROUP
I started PodSystem (now called Pod Group) in 1999. I patented and sold a box for engineers to receive parts at a remote location on the way to their next job (think lockers for suitcases in railway stations). The next ten years were not successful – creating and selling various hardware and software solutions related to what is now IoT, whilst providing SIM cards to partners. Realising that I needed to change, I decided to focus on providing SIM cards for IoT devices around the world. Since then Pod Group has grown to approximately fifty people and is moving towards a turnover of $10 million per annum with six offices (and counting) on four continents.
In the last section, I set out the characteristics of WEIRD – Wisdom, Emotional Intelligence, Initiative, Responsibility and (Self) Development. In theory, implementation should be easy. The reality is that you cannot just tell people to use wisdom or take responsibility for their work. To persuade people to use WEIRD attributes, it is necessary to create an environment that encourages WEIRD behaviour.
At Pod Group, we tried to involve all our staff in the change to WEIRD. The first part of the change process (now referred to as WEIRD 1.0) was gaining acceptance that the prevailing structure wasn’t sustainable and needed changing – whilst still keeping things running.
The Weird CEO Page 13