What is the problem?
Work has moved from a process that runs against the grain of human nature (‘algorithmic’ jobs – which require extrinsic motivators) to a process that must go with the grain of human nature (‘heuristic’ jobs – intrinsic motivators). The problem is that we have, embedded within our society, an ideology that is limiting our ability to create organizations that naturally align with human nature and thus heuristic jobs.
What is the ideology?
It’s a gloomy vision of human nature – the view that social organization is about keeping bad people from doing bad things—and a belief in Scientism – which is a pushing past of the limits of the Scientific Method, a turning of a blind eye to everything that isn’t currently measurable and a forsaking of the wisdom of common sense for what Friedrich von Hayek called a ‘pretense of knowledge’; or to paraphrase Rory Sutherland, Scientism (in the social sciences) is a belief that logic is its own answer.
What’s the solution?
“Thomas Kuhn was right in arguing that mere disconfirmation or challenge never dislodges a dominant paradigm; only a better alternative does”1 (pg. 87). The best alternative I’ve encountered is the concept of Flow or autotelic experience (aka intrinsic motivation or moving with the grain of human nature) as posited by Mihaly Csikszentmihalyi in his book Flow5. If we move into an ideology that believes that human beings are naturally guided by internal motivation, then management becomes about creating the conditions under which that motivation can flourish. Under this new ideology management is about how to practically enable this motivation (an idea that sits squarely in the domain of ideas presented in Drive), how to enable good people to do good things, and about bringing back the wisdom of common sense.
“In the early 1900s, Taylor, who believed businesses were being run in an inefficient, haphazard way, invented what he called “Scientific Management”… Workers, this approach held, were like parts in a complicated machine. If they did the right work in the right way at the right time, the machine would function smoothly. And to ensure that happened, you simply rewarded the behavior you sought and punished the behavior you discouraged. People would respond rationally to these external forces – these extrinsic motivators – and both they and the system itself would flourish”6 (Dan Pink, Kindle Locations 245-247).
This is the foundation for modern management and is an ideology, in the words of Gary Hamel, “…that was invented to solve the problem of how to turn human beings into semi-programmable robots” (what Dan Pink calls algorithmic work)6. However, the problem management needs to solve today is how to garner creativity, lateral thinking, engagement, and innovation from employees (all of which are qualities of intrinsic motivation where you can only create the conditions for engagement). For the first time in history, Gary argues, you can’t build organizations that are fit for the future without building organizations that are fit for human beings.
The problem is that we have an ideology that is keeping us from moving into the new reality Dan Pink and Gary Hamel refer to. You can call the current ideology whatever you want. I call it Reductionism. Rory Sutherland calls it Newtonian solutions. Sumantra Ghoshal calls it a combination of Liberalism and Scientism. And Friedrich von Hayek calls it the pretense of knowledge. Whatever it is called, it has parts that are keeping us from moving on. These parts are:
- Belief that logic is its own answer.
- A gloomy view of human nature.
- Belief that only that which can be measured matters.
- Belief in causal determinism.
Belief that Logic is its Own Answer
Because of the enormous success of the scientific method in illuminating the physical sciences we’ve developed a bias toward deductive thinking, and to quote Rory Sutherland, have begun to “feel that actually logic is its own answer.” Friedrich von Hayek has stated that in fields of organized complexity our job in shaping social organization is much like that of the gardener. We create the environment in which social organization can flourish. The problem with believing that logic is its own answer is that problems are often complex enough (especially when people’s choices and intentions are involved) that you often end up simplifying the problem and the solution to the point where you ignore that which actually matters.
Take the example of the London underground. For 6 million pounds European engineers built a faster train between London and Paris. They did it because the trains were too slow and passengers needed a quicker route. The problem the passengers had was an engineering problem, but was the problem of the London underground really an engineering problem? Was the problem really the physical speeds of the trains? What about the perceived length of the trip or the perceived painfulness of taking the trip? Don’t they matter just as much as the duration of the trip? Is it really about the physical length of time it takes a train to move between the two cities or is it about the perceived length of time? Imagine that instead of the problem being the real length of time, the problem were the perceived length of time. What solutions would you create if you knew the problem was the perceived length of time? You could, argues Rory, instead of spending money building a new dedicated line put WIFI on your existing trains. Then the perceived length of the trip would decrease and you would have solved the problem while spending .01% of the money. Imagine, he says (taking the idea one step further), for one tenth of the money you were to hire all of the world’s top male and female super models to serve Chateau Petrus. Then people would ask for the trains to be slowed down. You see, it’s not the actual length of the ride that counts, although that plays a part, but the perceived length of the ride.
What stands out to me about the example above is that not only does Rory illustrate how we over simplify our problems (by ignoring psychological value) but how we believe that logic is more valid than creativity. It was logical to whip out a spreadsheet, to perform a cost benefit analysis on the amount of time that would be saved (and thus productivity) of all of the passengers that would ride the train, and to show a neat ROI. But was it right? Putting WIFI on the trains was a lateral move. It was a creative move. And it took a belief that psychological value matters. That solution couldn’t be put into a spreadsheet, at least not as readily.
Not convinced? He goes on further to point out that the single largest measurable factor for reducing frustration in waiting for a train at the London Underground was the addition of dot matrix display boards that count down the amount of time you have to wait. Again, a solution that recognizes the value of lateral thinking. You couldn’t deduce your way to a dot matrix display board, you had to think creatively about the type of problem you wanted to solve and how you might solve it. You had to be aware of common sense.
Maximizing shareholder value is another belief in logic as its own answer. Why do we believe in maximizing shareholder value, Sumantra Ghoshal argues, because it’s logically efficient – because the math is simple. After all, capital is a commodity that is arguable in overly abundant supply, and the markets for capital are highly efficient. Whereas, the other input in business value creation, labor, is in a significantly less efficient market. As the argument goes, because people can seamlessly change jobs if their salary doesn’t reflect their worth to an organization (and thus a person is always paid fairly) shareholder value must be the return maximized. Does it sound right that it’s easier to change jobs than stocks in the stock market? It shouldn’t. Then why don’t our theories center on maximizing value to laborers, asks Ghoshal? The only honest answer, he says, because there aren’t simple mathematical models that allow for it.
Here’s another one for you. Ken Robinson speaks out against the ideology that logic is its own answer when it comes to education. It’s logically efficient to organize kids by age, teach them a standardized curriculum, create national performance standards, and to move a kid through the system sequentially by year. It makes sense. The logic is easy, but is it right? Why is it that we focus on deficit remediation in kids when we know it’s psychologically much more beneficial for a kid, in the long-run, to focus on his strengths? Why is it that we discourage curiosity and exploration in lieu efficiency? Why is it that we treat our kids like robots by making them comply with a rigid system? Think of the tremendous harm we are doing. Remember, by definition, a standardized process can’t handle non-standard inputs (non-standard kids). Think of how we try to standardize our kids and what effect that has on our outliers. To believe that logic is its own solution is to reduce the world to a zero-sum kind of physics in which there is no room for human creativity, and worse a belief that human being should conform to systems and processes not truly built for them.
It’s Scientistic to believe that just because we can make education reducible and modular that it’s somehow right this way. This is the belief that logic is its own answer, instead of a belief in logic as a tool.
Dan Ariely puts it well. In his TED talk8 he argues that we build our physical world by taking into account our physical limitations (elevators, stairs, cars, door knobs, locks…) but when it comes to the tools we’ve built to govern our society we build them without regard for our psychological limitations. What if we believed that the role of social organization was to create tools for society that are built for human beings? If we did this we’d still be able to recognize the role logic plays in creating solutions and understanding our society, but we’d also recognize that we are creating a society meant for the peculiarity of being human, and we’d be more willing to recognize that creative solutions make as much sense as deductive solutions do.
To put it another way, once we realize that our problem solving must take into account human psychology we are then open to realize that in fields of organized complexity (meaning fields where solutions are solutions only as they are accepted by human psychology and human beings) lateral thinking is just as important as logic because human behavior, thoughts, leanings, ideology, likes, dislikes, and cares can’t be reduced to a kind of spreadsheet analysis. In a world where you are creating solutions for people you have to think like a person.
Gloomy View of Human Nature
The view of human motivation has been that people are lazy, inert beings that will shirk at any opportunity they get3 (Kindle Locations 262-263). Thus the role of management must be to properly align external incentives (after all, we’re simply motivated by external rewards and punishments) in a way that aligns the individual with the organization. Thus enters Agency theory and theories on stock options and corporate governance.
However, there is a new view of human motivation put forth by Mihaly Csikszentmihalyi that argues that human beings are motivated by autotelic experience5 – autotelic experience being the drive to seek complexity in ones actions and in doing so to be motivated from an intrinsic desire instead of extrinsic motivators. Sumantra Ghoshal’s takes the idea further by arguing that it is a mistake to believe that the drive powered by external rewards and punishment is more fundamental than the autotelic drives (pg. 83). This is echoed by Dan Pink in his book where he notes that Edward Deci noted that the drive for autotelic experienced seemed to be more basic and motivating than the reward / punishment drive (Kindle Locations 93-95).
If it’s the case that people can be motivated by a strong desire for autotelic experience, then where did this gloomy view of human nature come from? In the 1920’s B.F. Skinner found that rats where motivated by extrinsic rewards and punishments, and idea was applied to the field of scientific management. We applied the idea in the way we created management structures, setup incentives, and crafted our theories, and a result the proof of B.F. Skinner’s work became valid in a de facto way and we developed a blind spot toward new models of human motivation. We all know that extrinsic motivators aren’t perfect but we’ve become so accustomed to them we can’t imagine a life where their power as a tool would be seen as an inferior option.
Take Ken Robinson and education again as an example. For whatever reason we believe that it is the role of education to remediate deficits. Instead of believing that the role of education is to create an environment of engagement in which people can pursue their passions and interests, we believe that a highly-controlled centralized process will do the trick. We do the same for our teachers. What teacher wants to teach children when she has no latitude and no autonomy? You can’t create autotelic experiences for the child or the teacher when you have systems setup the way we do. Again, we go back to the difference in belief between the role of autotelic experience and the role of external motivators.
Gary Hamel argues that Management 2.0 is about re-aligning with human nature and about moving with the grain of humanity instead of against it. This shift comes from a change in the nature of work. Previously work was about compliance in a clearly defined industrial process – an environment that makes extrinsic motivation highly effective. The nature of work changed. We moved from routine work to complex work requiring lateral and divergent thinking, and complex problem solving. In this new environment worker engagement is critical and the only way to accomplish the tasks of new-age work. This requires engagement. But engagement can only come from intrinsic motivation. Therefore you can only create the environment for autotelic experience, you can’t force it.
From this stems a new paradigm. Instead of believing that social organization is about keeping bad people from doing bad things you are forced into believing that social organization must be about enabling good people to do good things, and then trusting that you setup the right environment and that people want to do good things – that they are intrinsically motivated.
Belief that Only that which can be Measure Matters
The belief that only that which can be measured matters can be seen as a culmination of the two views discussed at length above. If you believe that human behavior can be perfectly controlled by external incentives, have a gloomy view of the human being, and believe that logic is its own answer (even when dealing with fields of organized complexity) then you naturally move to the belief that that which can measured is all that matters.
Take Ken Robinson again as an example. In our educational system we measure how well kids do on standardized tests, we measure how well our incentives are in line, we measure how many kids graduate and how many don’t, we measure how much teachers get paid, and on and on and on. We measure what is easy to measure and then we manage to it. We make sure that teacher salaries are as low as possible and that as many kids pass the standardized tests as possible and we focus on raisings standards. Like anyone is going to say, “No I think we should lower them.” None of what came up in our measurement was that side of being human. None of our focus was on how well we create an environment for autotelic experience – both for our kids and our teachers. None of our focus was on how we could build off of our kid’s strengths. None of our focus was on how we could pay teachers fairly – because it matters. None of our focus has been on how we can truly make a difference in this world. We think so small with our small metrics.
Benjamin Zander and his wife Rosalin make a good point. We need to reframe the situation. Instead of a maniacal focus on the numbers. We need to lift our heads to realize that what we should be doing is meeting each other as human beings. We pretend that what we measure is all that matters. That’s the problem, and that’s my point.
Shareholder value is another belief in the that which gets measured is all that matters ideology. Because we can measure shareholder value in terms of dollars it’s a convenient model for organizational design, but as I’ve argued earlier it doesn’t make any sense. It’s so ingrained that we can’t imagine a world that could be otherwise, but that doesn’t make it true or better than other alternatives. That simply makes it dominant. When did we lose our desire to, I don’t know, make a difference, and to do something of real social value.
This is where the wisdom of common sense is so often ignored.
Here’s another one for you. I work with a colleague who used to run a collections center. Management one day decided they wanted to break up the center into calls, foreclosures, and appeals. They figured that by doing this they could reduce their unit costs and gain efficiencies from specialization of labor.
My colleague disagreed. He didn’t want to break the group into calls, foreclosures, and appeals. He thought that calls where the most boring part of the job and that he could keep people happy and interested in their jobs by keeping them engaged in the whole process. Keeping them engaged in the whole process would create ownership while splitting the tasks would create burnout. This is a wonderful illustration of the problem with the uncritical application of habits of thought that Hayek mentioned in his Nobel address.
Say you built a spreadsheet to prove that you organization would be more efficient as a result of standardization, specialization, and economies of scale. You would be guilty of that science of falsification of which Hayek spoke because you would trick yourself into believing that only that which can be measured matters. What about the loss of productivity from the boring nature of calls? What about the fact that you don’t take ownership of a customer because you don’t walk that person through the process? What about the loss of human empathy because you don’t walk an individual through the process? What about the lack of engagement and ownership you feel? That doesn’t work into the spreadsheet so you pretend it doesn’t matter and by doing so actually do a disservice to society.
In the example above the argument that management made for the standardization and specialization of labor in the call center was that the call center would achieve economies of scale. John Seddon9 argues that while the concept of economies of scale is a valid framework you can’t actually tell where your organization is on the efficiency curve. And as Hayek points out, “[Measurable magnitudes] has led to the illusion … that we can use [mathematical economic] technique for the determination and prediction of the numerical values of those magnitudes; and this has led to a vain search for quantitative or numerical constants. This happened in spite of the fact that the modern founders of mathematical economics had no such illusions … as Vilfredo Pareto, one of the founders of this theory, clearly stated, its purpose cannot be “to arrive at a numerical calculation of prices”, because, as he said, it would be “absurd” to assume that we could ascertain all the data.” Our theories (like economies of scale) should serve as a guide, but they should override the wisdom of common sense, lateral thinking, or other methods for creating effective organizations. We cannot give away our practical wisdom for the pretense of knowledge and the false security we feel from creating easily justifiable deductive solutions.
Belief in Causal Determinism
Causal determinism is the belief that we can control our fellow man, and more importantly is our belief that we are subject to impersonal forces and by extension have no choice in our actions.
Causal determinism isn’t the belief that you can explain all of human behavior. It is the belief that you can control it through external forces. It is the difference between the chair maker and the gardener. Hayek recognized in his Nobel address that you can only create the conditions under which engagement exists. You can’t control it. It’s the difference between compliance and engagement. Management toward compliance is about believing you are in control and that if you properly manipulate human beings, in accordance with psychology, that you can control their actions. Management toward engagement is a realization that you don’t have that control and that the best you can do is create the environment for engagement.
“If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants. There is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try, "dizzy with success", to use a characteristic phrase of early communism, to subject not only our natural but also our human environment to the control of a human will. The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society - a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.”2
Causal determinism is the belief that Sumantra Ghoshal pointed out when he said that executives claim that they have no choice but to dehumanize work because they are subject to impersonal market forces that leave the individual bound to market will. A great example of the belief in causal determinism that has been shaping our society is the role of the Gulag in 20th century Russia. During the 25 years of Stalin’s power he murdered between 10 and 20 million of his own citizens. Many of the people who died were Gulag prisoners who were forced to build canals and railroads, cut timber and mine gold. What’s interesting in the context of this article is that the Gulags eventually became an economic imperative. “A lot of the major construction projects, plants and factories, and transport arteries, were built by prisoners. Nearly 200,000 prisoners worked on the Moscow-Volga canal, according to official records. That’s twice as many as worked on the Egyptian pyramids. So it was a major economic machine.”10 Once it became an economic machine it was even easier to rationalize and harder to get rid of. After all, you could argue, we have no choice but to continue with the forced labor of the Gulag’s because economic prosperity depends on it. This is a strong example of a societal belief in causal determinism (that we aren’t free to make our own choices and we’re simply subject to impersonal forces) that can lead to dehumanization in practice.
Ghoshal would argue that there is no overarching causal theory in the social sciences that can govern and align all functional theories (refer to his paper for an explanation of the difference between causal and functional theories). I agree, but I also disagree in that there is a perceived overarching causal theory at work. The ‘causal theory’ is that all human motivation can be predicted and explained through external motivation. This is the idea that you can perfectly predict a person’s action based on proper external incentives. I think this is the idea that Hayek takes issue with when he says that human intentions cannot be known. From the frame of causal determinism you can get to shareholder value maximization, agency theory, game theory, and the like. You can reduce human choice down to a kind of physics. The idea is that we believe we have access to and know all of the external factors relevant to predicting human behavior. Our belief in causal determinism has led us to view human being as self-preferring rational utility maximizing individuals. We’ve come to believe this because it’s the data we have access to – it’s what we can predict. And in developing this belief we’ve come to fool ourselves into believing that this is all there is to being human. When you realize that people’s drive for autotelic experience may perhaps be more fundamental than the drive of external motivators you gain a more holistic view of what it means to be human and you begin to recognize the role human choice plays in social organization.
When dealing with systems of organized complexity your choices often have unintended consequences. This can be seen through HBR article “Learning to Live with Complexity”11. Complicated systems can have many moving parts, but operate in predictable ways. Think of flying. Flying is very complicated and involves a tremendous number of moving parts, but is incredibly safe because we understand what all of the variables are and we know that if we control those variables we can create reliable and safe flights. Complexity is different in that it has high degrees of what the authors call multiplicity (high number of potentially interacting elements), interdependence (high degree of connections between those elements), and diversity (low degree of heterogeneity). From a practical perspective, in complicated systems you can reliably predict the outcome (that your plane will land) and in complex systems you can know the starting conditions and still not predict the outcome.
“In a complex environment, even small decisions can have surprising effects… Nintendo’s Wii provides a recent example. Its innovative motion-sensing feature was designed to significantly expand the gaming market. To appeal to novice gamers and keep the price down, the company made the rest of the console relatively simple. It believed that its core audience would appreciate the new technology and forgive the less-sophisticated console. Nintendo succeeded in its immediate goal of pulling in new customers. But traditional, hard-core gamers saw the motion-sensing technology as a gimmick and perceived the system as unserious. Over time, third-party developers increasingly released titles for the Xbox 360 and PlayStation 3 but not for the Wii – partly because of the console’s limitations but also because they, too, had come to view the Wii as a “casual” gaming machine. This long-term consequence of the company’s decisions would have been hard to foresee.”11
What’s one solution for dealing with a complex system? Rapid prototyping. Rapid prototyping allows simulate the behavior of a system in a low risk environment. It gives you a space to test your ideas before you bring them out into the broader world and it allows you to experience the unintended consequences of your actions without the large downside costs. This is what makes the MIX so invaluable. It is filled with examples of companies who have tried new management practices in low-risk environment and who have shared those experiences with the broader world.
Rapid prototyping solves the problem of logic as its own answer by allowing you to explore creative solutions in low risk environments. Additionally, since your experience of your solution comes through application in the real world you experience everything that matters, including those things you can’t measure. Rory Sutherland offers a model for framing your potential solutions and explaining their effectiveness. He argues that all solutions should (whenever possible) sit at the crossroads between technology, economics, and psychology. When you devise solutions that make sense from an economic perspective you know the solution is sustainable. When you devise solutions from a technology perspective you know the solution is achievable. And when you devise solutions from a psychological perspective you know the solution is practical. From the logic of this model you can then place your solution out into the world to see its effectiveness and any unintended consequences (whether they be good or bad).
Mihaly’s autotelic experience as seen through the eyes of Dan Pink (autonomy, mastery, and purpose) is the best model I’ve seen for combatting the gloomy view of human organization and causal determinism. Why is this the solution? Because the qualities of autotelic experience are those of engagement and engagement must be dealt with as a gardener deals with his plants, not as a craftsmen his handiwork (that solves the causal determinism problem). This view also runs counter to the gloomy view of human nature and shows people as good people and the role of social organization as enabling good people to do good things. From the perspective of autotelic experience you realize that your job in management practice is to use management tools that create the environment for autotelic experience.
From the two models that are offered – that of autotelic experience and the Rory Sutherland model – we can evaluate the different management tools and models available to us. You can ask yourself if agency theory allows for autotelic experience and you can ask yourself if hierarchical management really sits at the cross between technology, economics, and psychology.
It is one thing to articulate the new ideology behind management 2.0 and it’s another thing to move away from the current ideology. To move away from the current ideology one needs examples – to see other’s successes. This is where I think the forum of the MIX is so powerful. It is filled with examples of management tools being tried in reality that meet the qualifications of the Sutherland framework and the autotelic experience framework and that have the stamp of practical experience. The next section will outline a few of the tremendous number of examples from the MIX.
Great, we have a new model for human action and problem solving but what does it really look like? This section is dedicated to illuminating real world examples through the frameworks presented in the previous section.
Look at this statement of philosophy by a company called Morning Star (link to MIX article here):
- “People are happiest and most productive when they have personal control over their life.”
- “People “are thinking, energetic, creative and caring human beings of integrity” (from our Vision)”
- “The best organizations are those in which people aren’t managed by others, but in which participants coordinate among themselves, managing their own relationships and commitments to others.”
What amazes me about these statements of company philosophy is how well they align with the new ideology discussed in the previous sections. Recognizing that “People are happiest and most productive when they have person control over their life” is recognizing that people need and seek autonomy as a stronger motivator than extrinsic motivators. Recognizing that “People ‘are thinking, energetic, creative and caring human beings of integrity’…” is calling into questions, quite directly, the ideology of our society that management is about keeping bad people from doing bad things. Recognizing that “The best organizations are those in which people aren’t managed by others” is a statement on the role that autonomy and engagement play in human behavior and organization. As Sumantra Ghoshal puts it, to treat a human being as if he will shirk (which often happens when people are managed by others) is to inform that person’s notion of what you believe about him and is to actually encourage shirking behavior – a process Ghoshal calls the double hermeneutic.
From the new framework put forth in the Solution section of this document you can see that Morning Star creates the environment for engagement (autonomy, mastery, and purpose) and will therefore be more likely to create management solutions that align with technology, economics, and psychology.
Take a look at the MIX management tool called the CLOU, or Colleague Letter of Understanding. A CLOU is a tool that Morning Star uses where each employee clearly defines his commitment to his colleagues. This would be the primary tool that employees would use to coordinate and organize themselves. Here are the facets of the CLOU:
- “Personal Commercial Mission: each colleague within Morning Star is responsible for crafting a Mission that represents their fundamental purpose within the enterprise. This is intended to be their primary guiding light, the statement that should be the direction for all of their commercial activity within the enterprise.”
- “Activities: the key activities that the colleague agrees to accomplish in pursuit of their Personal Commercial Mission.”
- “Steppingstones: identifying the key measures (Morning Star lingo: "Steppingstones") by which the colleague gauges their performance in accomplishing those activities that they commit to, as well as the accomplishment of their mission.”
- “Time commitment: the amount of time the colleague agrees to commit to the accomplishment of their Mission.”
- “CLOU Colleagues: those colleagues to whom you are making these commitments. Your CLOU colleagues were to sign off on the CLOU indicating their agreement with all of the representations therein.”
Notice how the elements of the CLOU align with engagement, psychology, and autotelic experience. This is another example of how organizations are creating management tools that align with the grain of human nature.
“CEMEX is a global building materials company… [that] produces, distributes, and sells cement, ready-mix, concrete, aggregates, and related building materials…” The company developed a social networking platform called Shift that they believed would allow them to continue their history of innovation and would help them integrate innovation back into their culture. What’s interesting about Shift is how it changed the way they work as an organization. Shift has allowed the company to move from the standard strategic planning process (executives in a room planning the strategic direction of the organization) into a social strategic planning process. The company allowed employees to decide where they could contribute to the strategic planning process and gave the employees the freedom to make a contribution. What’s interesting about this change in perspective is how it enabled purpose (employees where now involved in the strategic direction of the organization), autonomy (employees got to choose whether and how they contributed), and mastery (employees got to spend as much time contributing their unique talents as they wanted).
Here’s what CEMEX had to say:
- “CEMEX has learned how to better assemble and engage work groups simply by inviting people, instead of conscripting them to communities or teams. In this new approach people are invited to join a team and asked why they think they are suited to contribute to the current challenge. Their response (or lack thereof) separates people from those who are interested and those who are not. It gets started with people who are already engaged and committed to the project, rather than forced to participate.”
- “Another important lesson is that people are usually willing to help, when asked to. They will readily share their experience and knowledge to colleagues who need it if they are asked to, just for the sake of helping and leaving a mark. In benchmarking products and practices, questions directed at a team, were promptly answered by a team member or referred to the expert, when the person could provide a better answer. Most requests were satisfied.”
- “Transparency, visibility and the open sharing of information have also resulted in more speed and agility for teams looking to improve their performance. Anyone can look to Shift for better ways of doing things, processes and products they can benchmark, and quickly learn how to adopt them, without the need of a lengthy knowledge transfer process or the authorization of many higher-ups.”
Notice how these quotes show how Shift has enabled the company to sit at the crossroads between technology, economics, and psychology – after all the technology has created more speed and agility while engaging the workforce. And notice how Shift creates the environment for autotelic experience by inviting people in and letting them focus on what they want to contribute. Again, shift is an example of companies creating management tools that align with the grain of human nature.
The WeOrg is an idea developed by the Microsoft Lync team lead by Dan Bean. He recognized that his team was in a unique environment and that as a result he needed to approach project management in a different way than he had in the past. The unique environment was the slow recovery in 2010, and in that environment companies and other Microsoft organizations were rehiring top talent. In order to not lose the Lync team’s top talent and embedded product knowledge Dan had to think of ways to keep to stay. The idea, recognized Bean, had to be to increase employee satisfaction and trust so that employees would feel compelled to stay.
The situation the Microsoft Lyn team was in sounds very similar to Dan Pink’s future of heuristic work and Gary Hamel’s future of work that goes with the grain of human nature instead of against it. In other words, Bean recognized that in order to retain top talent he had to create an environment of greater autonomy, mastery and purpose. Notice too that by creating an environment for greater autotelic experience one quite naturally fulfills Rory Sutherland’s requirement that solutions understand and account for psychology.
The 85 person Lync team consisted of Directors, Managers, Lead and Individual Contributors all of whom are reorganized after each product cycle. Bean decided to create greater autonomy by allowing Lead and Individual Contributors to rank their preference for the Lync team each person wanted to join (a process he called WeOrg). He also created an environment for better mastery by having the Mangers serve as mentors for Lead and Individual Contributors who could provide advice on how certain teams may provide better opportunities for future career growth and responsibility. Finally, he encouraged purpose by allowing each individual to feel more naturally aligned and with his Lync team.
The result? 95% of employees reported that they liked or somewhat liked the reorganized teams. And only 4% of employees said they didn’t receive the position, organization, or technology they preferred. Here is a list of some of the benefits the Lync team recognized after the WeOrg:
- “Benefit: Not many people get the opportunity to choose where they work and what they do and this is one of the reasons why people leave a team and join another. Introducing the freedom to choose into the reorg process has the potential to maximize retention by discouraging people from leaving the team. This becomes a win-win situation where employees build productive, rewarding careers within the team and the organization retains the technical talent it needs to accomplish its goals.”
- “Benefit: Open and honest discussions between Test Managers , Test Leads and IC’s helped to develop greater respect for roles, responsibilities and the type of work performed.
- “Benefit: People tend to join a team looking for career growth, technical skills, rewards, etc. – and this process forced the Manager/Employee conversation before they joined the team. Too frequently, these discussions never happen, or if they do, it’s only during performance evaluations, when it’s too late.”
- “Benefit: Employees were given enough time to thoroughly investigate their options and the freedom to make their own informed choices. Because it was a conscious decision, this self-organizing also helped generate a sense of accountability and self-responsibility within the team.”
Like the examples in the previous sections, notice how well the Microsoft Lync WeOrg fits with the model of autotelic experience and Rory Sutherland’s model. Notice how much more naturally this reorganization felt like it fit with a system of organized complexity (that system being the process of allocating and organizing people in alignment with a particular work effort). This is an example of the new future of work and management that can be achieved and the role that management must play in realigning with the grain of human nature.
I encourage you to explore the MIX to see the vast array of management tools presented. As you read occasionally think about the ideology that seems to be present in each tool or framework and give your own assessment of how you think it aligns with the dichotomy between old and new theories of social organization and management practices.
I used to believe in a kind of physics of truth – this is true because it is and this isn’t because it isn’t and I can logically deduce to what’s true and what isn’t. I believed that this stricture was absolute. But then enters Behavioral Economics and all of the sudden we’re realizing that things that are true are relative and contradictory. We come to realize that we can’t necessarily work our way through society and the problem of social organization like we can for physics. It’s messy and often the creative solutions are the simplest and most effective. We begin to realize that our structures and tools and psychological constructs and are more like crutches than absolute rules. It’s a realization that we’re standing on shifting sands. What’s true today could very well be replaced with something contradictory that’s true tomorrow. Ghoshal put it best when he recognized that in physics we have two competing and contradictory theories for light – light as a particle versus light as a wave. Despite the contradiction that each poses for the other we recognize both as true and valid. In the same way theories or tools that we use in management (take the difference between the social organization of the hierarchy versus the social organization of the social network) are often contradictory and both true at the same time.
Psychologists have the concept of reframing – you reframe a situation when your perspective on the evidence and events before you shift slightly (or drastically). Take for example an idea proposed in finance. It’s recognized that if you place a moral frame around a contractual agreement that people are more likely to enter into that agreement with morality in mind and are therefore less likely to participate in unethical behavior. To practically apply this concept some organization are placing a statement of ethics clause at the beginning of their contractual agreement as a way to change the frame of the agreement.
This idea should apply to your first steps. If you can choose to suspend the reality of the current ideology and choose to artificially adopt the views of the new ideology you will effectively reframe how you see the problem of social organization. If you temporarily choose to view people as good people trying to do good things, temporarily recognize that logic isn’t the only path to a solution; new solutions to social organization become available to you. You being to think about how you would act and what you would do if you knew that everything that matters couldn’t be measured. You begin to think about how creativity can help you in your organization. You begin to think about how you can create the environment for autotelic experience (after all you want to enable your employees who you now see as fundamentally good people). And you gain ideas. Then act. From your new frame and your new ideas find situations where you can try rapid prototyping. Just try it. Do a small experiment. Take your new solutions and your reframing one step further and actually try your new solution in a low risk environment. If it turns out that people are bad and that logic is a much better answer and your solution failed, then fine. You didn’t lose anything from trying it. And if you’re successful then you can be instrumental in developing a new reality. Remember the role of the double hermeneutic. It’s self-informing. As a result, you won’t change anything until you change your frame and your actions.
Sumantra Ghoshal, Friedrich von Hayek, Daniel Pink, Rory Sutherland, Mihaly Csikzentmihalyi, Gary Hamel, and Ken Robinson.
Interesting post. Some of the problems you mention are addressed by "Agile" practices. There are lots of resources about it - here's one http://bit.ly/PRUKNn
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I've noticed that Steve Denning's name has come up a couple of times in my wondering around the web. Thanks for the great link. I'll dive more deeply into his site, both at the link you provided and on Forbe's. Thanks again.
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I have creaed a new management model titled as "Three-Tier Management". Maybe it is relevant to your ideas. If you are interested in it, please link http://www.managementexchange.com/hack/three-tier-management-latest-version
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Great hack! It reminds me of the comedy sketches where someone thinks they're drowning in a 1ft pool until another person tells them to stand up. My concern is: how does one get from point A to point B- how do we "make it safe" for them to stand up? Most managers I've encountered are so entrenched in their beliefs that their way is the only way, getting them to re-frame on a small scale is near impossible. I sincerely hope it isn't, but I fear this is the norm.
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Thanks for the support! I think when you write something there's a natural fear that no one will like it or even care, so I'm very glad to hear that you like the article.
To your point about managers being entrenched in their beliefs, I don't necessarily think I have the answers, but I'll give you my thoughts on the subject:
To me a dichotomy is starting to form between tools meant for predictable systems and tools meant for complex systems. Example: Gaant charts are made for predictable systems because they require that you plan a project as if you knew everything that would happen over the life of the project; whereas, rapid prototyping is a tool meant for a complex system because it responds dynamically to changes in a project.
If you separate all of the tools of business into these two buckets (predictable, and complex) then I think what you can do is make the case to a manager that we should be using tools meant for predictable systems on predictable system and that we should be using tools meant for complex systems on complex systems.
So why does this dichotomy matter? I think it matters because it allows you to make a clear case for why a certain tool, way of doing things, mindset, ideology, etc. doesn't work.
What do I mean? I imagine saying to a manager: "External incentives (carrots and sticks) are great, but I think human behavior is more complex then just having the right external incentives. Here's are examples of companies that have setup the right external incentives AND have decided that in order to really maximize their employees' motivation have setup flexible hours so that people feel like they have more autonomy over their time. By setting up flexible hours, Mr. Manager, I think we take into account people's desire for autonomy and by doing so we'll deal with the complexity of human motivation a lot more accurately."
One point of resistance I see to the conversation above is a manager not wanting to give up control -- Ex. "I like to know what my employees are doing, after all, how can I manage them if they're not working on my schedule and constantly near me?"
That point of resistance is tough and I think might require a lot of change management. There is a great booked called Switch which discusses how to help people realize they might need to change their behavior. The book is centered on this idea that a logical appeal isn't enough. You can't just tell your manager that we'll have more engaged employees if we give them more flexible hours. You have to help a manager FEEL that it really is a good thing to have more engaged employees. That aspect of motivation through feeling is important, and might be a good way to bring about the change you (K.) are seeking.
Those are my thoughts on the subject. As time permits I'm going to start writing another hack on the difference between predictable and complex systems, tools meant for each, and how you can maybe help people adopt the full suite of tools.
I'd love to hear your feedback! So feel free to post it here or send me a message. Thanks again, K.
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Hi Taylor, I like your idea, and I think that actually it is not a contradiction, because different kinds of needs for employees produce different types of management for companies.
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Aaron, you're absolutely right. I've been thinking about that and when time permits I'll alter the framework a little bit.
Instead of presenting the ideas as either/or. It makes much more sense to present them as a balance -- i.e. all of the available ways of viewing the world are necessary and the method you choose depends on the management context.
Thanks for the input.
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