Hidden Mojo

Bob Sutton has an excellent post about the value of well-designed systems. The weak link in organizations are often the systems, which incentivize counter-productive behaviors. This leads to behavior that is both unproductive for a company, and demotivating for employees.

And when 73% of employees are disengaged at work, it appears that there are a lot of organizational systems that are broken!

Sutton is championing “evidence-based management“, which is the simple idea that the best way for management to happen is to find the best facts available, and act on them. To that end, Sutton claims (but doesn’t cite sources, unfortunately) that

ordinary people can perform at top levels in a well-designed system, and even a superstar is doomed to fail in a bad system… as my colleague Jeff Pfeffer puts it, some systems are so badly designed that when smart people with a great track record join them, it seems as if a “brain vacuum” is applied, and they turn incompetent.

In other words, if you’re paying truckloads of money to your stars, but your systems stink, you’re wasting your money.

Many systems fail for one of two reasons:

1. incentives do not align individual behavior with behavior that is most productive for the company, and
2. employees don’t feel like they are in control, and thus become unhappy and disengaged.

To figure out whether your systems are failing, ask yourself several of your employees if any of the following occur in your company:

1. Rewards are solely based on individual performance, not group performance. Basing rewards on individual performance encourages resource- and information-sharing, which can be extremely unproductive for a company’s bottom line.
2. It takes two weeks to order a pen from Staples. It probably costs more money, is slower, and more frustrating to go through the purchasing process than to just buy the pens from the store!
3. Feedback on how employees are doing is given annually, at best. To modify behavior, feedback must be given frequently and close to when the desirable or undesirable behavior occurs.
4. Decisions take forever to get made, and it’s rarely clear where the buck stops. In this situation, responsibility for making a decision and accountability for the outcome of the decision often don’t rest with the same person. This leads to the horrific scenario where people who are good at taking credit rise through the ranks, while the real stars languish or leave.
5. Salaries are inequitable. Alfie Kohn shreds the fallacy that cash is a good motivator and explains how equitable salaries lead to higher performance. People talk, and inequitable salaries are demotivating.
6. You have policy-itis (i.e. you have a policy for how many paperclips each person can use in a week). Your employees are smart, right? That’s why you hired them, right? Help them hold each other accountable–it’s must more effective than a policy that is either ignored or frustrates your people.

Peer accountability is a key principle that many democratic companies use, as it’s a much more effective and egalitarian way to motivate people. Instead of a fear-based approach where your managers telling their people what to do and punish them if they don’t meet up to expectations, it’s much more powerful to ask people what they will accomplish, and empower their peers to hold each other accountable. Because nobody wants to be the person who lets their team down. Combine this mechanism with basing rewards on group performance, and you have a powerful, sustainable motivator. Motek, a company in Beverly Hills, California, uses this peer-accountability system (and other forward-thinking practices) to great success.

Just as it’s important to understand your customers’ needs, it’s beneficial to your and your business to understand things from your employees’ perspective. So ask them! It’s important that you’re not defensive and you listen more than talk. If your employees understand that what they say won’t be used against them, you may be surprised at what you hear.

Once you have a better understanding of how your systems are broken, you have an opportunity to fix them. Involve your people in the process, and you will get great ideas and tremendous buy-in. Remember: when complex work can be automated or outsourced, your creative employees are the key to your success. If you can build systems that encourage the right behaviors, you’ll be miles ahead of your competition!

This entry was posted on Wednesday, September 20th, 2006 at 9:52 pm and is filed under systems perspective, bob sutton, motek, alfie kohn, bureaucracy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.