What Matters for the CEO

Looking up the hierarchy employees can believe that being CEO must be a game changing experience. However, the reality is that the imagined power comes with its own constraints. Here are a few words for the new CEO (or any new manager) on what matters. This is where the reality and the illusion diverge:

What You Hear Matters More Than What You Know: You have plans and agendas. You know the place & the ropes. You have great skills, knowledge and wisdom. Show it by going and listening to the people who matter most – those doing the work, your customers and your community. Ask their views and change your own. Let what you hear guide what you do.

What You Do Matters More Than What You Say: You are surrounded now by people who want to listen to you. You are supported by teams of professional communicators. You can order an expensive new brand campaign if you want. You have a soapbox but the smartest way to roll is to get down off the soapbox and go to work. Let others work out who you are by what you do.

Your Reputation Matters More Than Your Record: You must have a great record or you wouldn’t have the job. Nobody cares about what you did now. They only care about how you did it. The how determines your reputation internally and externally. Everything you do is added or subtracted from your reputation. Everybody wants to discuss your reputation because they want to predict what you will do next. Your reputation has more influence on what you will get done than you think.

Your Influence Matters More Than Your Power: Congratulations on being top of the hierarchy (excepting of course for your accountability to the board, the chair, shareholders, analysts, community activists, politicians, your family, and anyone who ever had a view about your company, etc). You have the power now, but mostly you can’t use it. You can’t sack everyone. You can’t survive a revolt. You can’t do the work yourself. You can’t answer every question. Accept that with all your power the best way to get anything done is still with influence, the same way you climbed the ladder.

Your Network Matters More Than Your Hierarchy: The hierarchy mutes your influence. A hierarchy is only one part of your network. Some of your direct reports are openly campaigning for your job. You’ve been there and you know they won’t wait long. The further down the hierarchy you go the less your voice is heard and understood. Importantly, you are now the face of the organisation to customers and the community. Looking down the hierarchy won’t help you deal with those critical stakeholders. Start leveraging the networks through and around the organisation. Those networks helped you on the way up and they will help you now. That’s where you should use your influence. The network magnifies your influence. That’s where you do your best work.

Your People Matter More Than Your Process: Nothing in the organisation gets done without people. The best processes, technology and organisations will fall apart without the right people. Start focusing on building their capabilities and changing the processes to adapt where required. Your customers and community will appreciate the immediate increase in your organisation’s responsiveness.

Your Exceptions Matter More Than Your Rules: If everything was predictable, great people wouldn’t be required. Focus on how you identify, manage and adapt for exceptions, anomalies and surprises. Don’t let your team explain them away. Many exceptions hide insights, risks, threats or breakdowns that your current processes can’t handle. Exceptions are where the disruptive innovations lurk and where reputations are won or lost. See exceptions as a chance for you to lead make changes, especially to help your people and your customers.

Your Effectiveness Matters More Than Your Efficiency: Your new staff are going to make your life extremely efficient. They will quickly create a schedule, cut access and manage a protective bubble of carefully selected information. That’s the best way for them to make their life easy and predictable again. However, obstacles are the work, exceptions hide insights and you will need to experiment on your personal effectiveness. Without slack, freedom to connect and thinking time you won’t be able to do this. Incidentally the need to focus on effectiveness of purpose goes for the whole organisation too (see ResponsiveOrg).

Your Purpose Matters More Than Your Pay: You’ve spent a lot of the crazy pay already and here I am saying it doesn’t matter. What matters is the impact you have on the world. The internal motivator called purpose pushed you so hard to get here. You wanted to make a mark, not cash. Delivering on purpose is what makes the role worth doing and will be how your tenure is judged. Years from now you will barely remember the money but you will see the faces of those in the network around the organisations whose lives you changed. Which way do you want to influence their lives? Let’s hope they are smiling later. 

The Job Matters More Than You: Unless you are a founder or a complete failure, the role you play existed before you came along and will exist afterwards. That role means a lot to the hopes and dreams of all the employees, customers and community. Those dreams deserve your respect. The role is not yours. You are no better because you have it. You are just the current steward. Leave it better for the next person and make sure that you have the influence to choose them wisely. That may be the best legacy you can leave.

The Continuous Partial Attention of Management

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The story is too common in the modern organisation: a team has a member who is not contributing but they go on being a part of the team for months or even years. Waste, frustration and disengagement mount in the team. Despite the negative impacts and length of time the manager responsible does nothing to rectify the underperformance.

We have more performance data than ever. We have more sources of information than ever. We interact in more ways than ever. We live in an age of increased performance transparency.

How Can Sustained Underperformance Be Common?

All that data, information, interaction and transparency brings more for managers to do. Complexity is the fundamental challenge of the modern manager and without careful husbanding of their attention the time of the manager can be subsumed into busy work.

Continuous partial attention has crept into management practice. Challenged to keep up managers are constantly skimming across the top of the work. Interactions with employees are staccato bursts. Busy managers spend less time understanding what is actually going on. Flitting in and out of observation of their employees, managers can be lulled into a false sense of confidence if the numbers look good. 

For an under-performing employee that means the ability to escape action continues as long as the deadline has not yet arrived, the numbers look acceptable and underperfomer has an answer for the first quick query from a manager. The commonest trick is for the under performing employee to send their busy manager an email asking for a complex decision. Likely overlooked or deferred, it becomes an instant performance excuse. Instead of asking for help the employee uses the pressures on their manager as a chance to hide their performance issues. Time, pressure and waste mount up.

In rare cases, managers may see the problem situation but the pressure of other demands means that they do not prioritise action. They trust in the systems, the employee’s peers or the reporting to correct the underperformance or hope that the employee’s lack of action is temporary. These managers prioritise the work and the system over their people to the detriment of everyone.

Refocus the Attention of Management on the Process of Work

Psychological studies show that multitasking & continuous partial attention don’t work. People who practice these approaches feel that they are more effective but aren’t. We need managers to get off the treadmill and reconsider their approaches to performance:

  • Shared Purpose & Goals: In many of these situations the underperformance is simply because the busy manager has not set, clear goals for the employee and the employee has no rationale for their work. Engage employees upfront on the purpose and goals of their work.
  • Enable and Empower: If managers don’t have the bandwidth to guide and manage, organisations must ensure that employees have the ability to manage themselves and their work. That takes an investment in skills and the freedom to make decisions without waiting for a busy manager to respond.
  • Targeted Fast Agile Delivery: Ask an employee to work on a lots of  things for months and they will be as bamboozled by the status & priorities of the project as their manager. Instead ask an employee to deliver a few focused things in a short cycle of delivery. The need for reporting, status updates & chatter goes down as observable delivery increases.
  • Real conversations: Any genuine one-on-one conversations with an employee & their peers of more than 10 minutes will begin to surface the real issues in a team. Asking good questions and listening to hear between the lines of the answers is critical in management. Managers must prioritise this to enable their teams to succeed.
  • Act now: The busy nature of work is not an excuse to defer needed actions or to defer complex decisions. If something triggers a suspicion, then dive in.

Great managers shape the process and performance of the team. Great managers enable every member of their team to realise their potential and contribute to creating a more responsive organisation. They are not slaves to the reporting, information and decisions that flow through them. Managers must step out of continuous partial attention to the ongoing work process and get involved in the design of the work.

The work of leadership is to realise the potential of people. Leaving someone stuck in a rut of continued underperformance is failing that individual’s potential.

Lead Human Complexity.

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The more any quantitative social indicator (or even some qualitative indicator) is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor – Campbell’s Law

Traditional management often seeks to reduce complex human behaviour to a single measure to manage. This approach works well for unthinking machines but it struggles with the complexity of human ability to shape behaviour on expectations.

People aren’t Widgets

Economists have been looking at the impact of human expectations on policy decisions for centuries. However, too little of this thinking has made it into industrial models of management thinking.

Traditional industrial models of management treat human beings on the same basis as other elements of machinery in the manufacturing process. This approach does not allow for the difference between a machine and a human’s ability to alter performance based on their own expectations and as result of interactions with others. The creative potential of collective human intelligence quickly outstrips this approach.

John Maynard Keynes highlighted in 1936 how expectations can make even the simplest choices quite complex when interactions of other human actors are involved. His simple example of a prize for nominating the best looking six faces in a beauty contest:

It is not a case of choosing those [faces] that, to the best of one’s judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.

The impact of expectations is found in many work activities. The expectations of peers can increase or decrease performance. Expected rewards shape behaviour, whether they are financial, status or emotional. Many highly skewed incentive schemes fail to achieve expected performance change because humans form a view of the likelihood or value of the returns for effort on offer. In some cases, a combination of human creativity, expectations and collaboration between employees & others will even produce totally unintended results

Human expectations of the future change the behaviour of people now. The accuracy of expectations does not matter. A critical role for leaders is to be a part of the conversations that are shaping the ongoing expectations in a team. Designing an incentive scheme and tracking the measures is not enough.

Networks Accelerate the Making and Sharing of Expectations

In our increasingly networked world, it is much less likely that any individual in an organisation will behave like a machine that has no choice but to optimise performance.  The networks inside and outside the organisation will create new expectations and accountabilities on individuals in the organisation. Expectations are just one part of the collective sense-making that will go on as people work to create value.  No individual or organisation is an island any more.

Leaders need to prepare to engage with this increasing complexity and to join the conversations to shape the expectations that will drive human behaviour. Creating a collective vision, building trust, realising human potential and fostering collaboration can all contribute positively to the expectations of individuals in a network.

If you leave the conversation to the network, you are losing your influence as a leader. You are also surrendering the potential for better performance.

Are You Leading for the Quarter or the Future?

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No rational person would jeopardise their future to meet an arbitrary 90 day milestone. Too many corporate incentives are structured exactly this way.

There are many eloquent complaints about the danger of the short term focus of corporations, especially publicly listed ones. My concern is that this short term focus stands in the way of more human and more responsive organisations. This short term focus divides accountability.

Time is short

One force driving the pathology of traditional management approaches is short time frames & arbitrary division of time. Results are fragmented down to hourly, daily, weekly, monthly and quarterly targets. We engage in the division of time as much as we divide work.

Incentives and management processes are tied to these short term results. Dividing time in this way values values the present quarter or time period to the exclusion of almost all else. As a consequence the arbitrariness of the short time frame becomes an invitation to treat the entire process as a game and to push the future far from consideration.  

Getting the number

When a decision is made with the sole objective of delivering a number, we enter a realm of dangerous ethics and considerable risk to the future. Purpose, customer relationships, employee engagement and community reputation are immediately in jeopardy, as everyone focuses to deliver the certainty of the financial outcome required.

The pressure of a short time frame immediately eliminates activities:

  • that may require upfront investment, time or effort
  • that may involve uncertain returns like experimentation, new product development, enabling customers, employees or other stakeholders, etc
  • that involve thought, analysis, research, input or consultation
  • that deliver large benefits beyond the time period
  • that have any form of initial dip in performance

This remaining options usually come down to one or more of the following:

  • bringing forward returns, usually at a significant discount
  • grabbing more value in the relationship with another stakeholder without regard to longer term consequences in the relationship (for example by raising prices without regard to impacts on loyalty or market position, demanding rebates from suppliers, etc)
  • arbitrary cost cutting, especially employees or ‘discretionary expenses’ like marketing, training, maintenance, support, etc where effects are not immediate 
  • accounting treatments, particularly relating to the recognition or allocation of revenue or costs and the valuation or recognition of assets and liabilities
  • outright fraud and deception

Waste

Some of these changes may cut waste or realise value, largely by accident. In many cases, the organisation responds to the changes with innovations that ameliorate the longer term impact or at a minimum defer them for another quarter. Pressure can inspire creativity and efficiency. The negative future effects and ongoing pressure can also generate a treadmill of even greater pressure.

We must be clear that this activity is waste. Playing the numbers game is wasteful effort. It risks the future and compromises the core value creating relationships in the business. The demands of the ‘numbers game’ work to unravel any efforts to become a more responsive organisation. The ask to meet numbers always pushes for planned outcomes, maximum control and a lack of transparency in decision making.

No Division of Accountability

Accountability for outcomes is core to the future of any organisation. Ending number games does not mean an end to accountability. It means greater accountability.

  • Let’s be accountable to make every decisions in line with purpose and values.
  • Let’s ensure all employees are accountable to deliver now, for a better future and to realise people’s potential.
  • Let’s ensure that the accountability is an accountability to all stakeholders.
  • Let’s also work to deliver each day in a realistic manner to our long term goals, not just scrabble to manage an arbitrary day that we choose to report.

We need to end the division of accountability.

Management Practice Lags Culture

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Management practice is influenced heavily by hierarchy, tradition and risk aversion. As a result our practice as managers lags the changes in culture in the society around us. Leaders need to work to close the gap between management practice and social expectations.

Management Practice is a Lagging Indicator

The way we manage our organisations is defined by practices that often trace back to the industrial era. The consequences of this are evident in many ways:

  • the diversity of our organisations does not reflect the diversity of our communities. Gender is just one diversity dimension in which management practices lag that the practices and views of society as a whole.
  • organising activity using networks and leveraging the potential of people to contribute is another way in which organisations are only beginning to address opportunities that communities, our personal relationships and the innovative organisations have already embraced
  • resistance to give up hierarchy, planning and demands for predictability and certainty when even the political structures based in these models have surrendered to approaches that operate far more adaptively and responsively.

Art is a Leading Indicator of Changing Society

Our cultural products adapt far more quickly to changes in society than our management practices.  Film, television, music and other forms of entertainment rapidly embrace changes in the way society operate and reflect that in the protagonists of the stories, songs and other art forms.

An example can be seen in the role of the detective in arts like novels, film and television.  In the birth of the industrial era, the detective was a logician, like Sherlock Holmes unravelling facts and relying on expertise in predictable processes, By the early 20th century the detective was a master of the human elements of relationships, like Simenon’s Maigret.  The uncertain times of the mid century introduced the detective in a much more ambiguous role. Richard Martin has documented how the changing nature of the detective film reflects our changing society.

Cultural products appeal to our need to be entertained, connect and engage with each other. Therefore they must be relevant to our society as it is today. Art is an experimental market where failure is common and success is usually defined only by audience acceptance. Someone is always seeking a better way to express the zeitgeist.

Why does management practice lag changes in the culture of society?

Management practice lacks these same pressures. Too much of our management practice is assumed to be canonical and confirmed only by inward looking assessment:

  • Focus on best practice: Best practice is historical and often particularly contextual. However, managers are often reluctant to move beyond accepted best practice.  As Harold Jarche has argued we should look instead to practice to be best and look to be more social leaders.
  • Risk Aversion: Avoidance of failure is a core tenet of management practice. Managers stick with practices that have worked safely for them, often in face of evidence that newer practice is better. Safety is valued.  There are real costs to this risk aversion.
  • Hierarchical & Internal: Managers who are more hierarchically senior set the bounds of acceptable management practice and control the HR processes that reinforce acceptable practice. Without an external & learning mindset, these leaders can inadvertently reflect management views and mindsets of a previous generation that were handed down to them during their early career.

Change

Responsive Organisations will have a culture and a set of management practices that reflect the needs of our society now. These organisations will experiment, test and measure the effectiveness of their practices in the marketplace and in their organisation. They will not rely on canon, hierarchy or accepted opinion.

The benefits of organisations using management practices that better reflect the changing culture of our communities are clear. These organisations will be more human and better able to realise the potential of all people.

Bringing this change about is the work of leaders and change agents. 

The Choice: Two Roads or Promises?

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Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;

Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,
Robert Frost

At times, we can reduce the challenges in leading organisations to a greeting card: There are two paths in management, a traditional one and now a better one. Pick the wrong one and your organisation will fail. The reality of modern leadership is more complex.

However, the glorification of the ‘road less travelled by’ is not the meaning of Frost’s poem. ‘The road less travelled by’ is hardly an appealing option for managers who must make decisions every moment of every day about how to lead their organisations and respond to the challenges before them. “The road less travelled by” is usually a road out of the organisation.

Frost’s subtle poem reminds us that many choices are obscure and evenly balanced when made. That obscurity is rarely resolved. We are left to define ourselves by the choices we have made and see the outcomes as results when the connection between choice and outcome is often remarkably complex.

Two Roads

Faced with the challenges of a rapidly changing networked economy many managers choose the path of efficiency. In a time of crisis, they redouble their efforts to deliver certainty, control and secrecy. Seeing threats in a digital economy these manager seek to take greater control and shore up the traditional defences that seem to offer certainty. Rather than deal with complexity, it is easy to declare a new simplicity.

Others are increasingly experimenting with experimentation, autonomy and transparency. They are seeking to create new forms of organisation from responsiveness and adaptation. However, as the use of new models increases there are real challenges to be resolved and new cultures and practices to be built.  It is a brave middle manager who chooses to introduce this approach into an existing organisation of any size. At times, the Responsive Organisation can feel more discussed than delivered.

Some times the two approaches are mixed and we don’t even realise. Our traditional ways can be so deeply ingrained that we can’t see the irony of ordering autonomy and experimentation. For a manager considering how to respond to a situation in the moment, considering new ways of working can seem like a luxury. After all, wasn’t the point of all our experience and training to give us tacit knowledge on which to rely when things get challenging?

Not Simple, Complex

Managers don’t struggle with organisation and choice in the simple or even the complicated domains of choices.  In these cases, traditional approaches work with some predictable degree of success. Recommending a responsive strategy in these examples is as wasteful as managers embedded in traditional management mindsets would see it.

However, the challenge of the modern organisation is rarely bringing complexity to simple choice. Bureaucracy may make simple management choices feel complex to implement, but the choice remains straightforward. The challenge for organisations is pretending there are simple choices when the domain becomes increasingly complex.

Complex choices are where we need learning, experimentation and new ways of working. This is the where we need to sense and respond. This is the domain in which managers see the networks around us change the nature of our traditional considerations.

Promises to keep

The nature of the complex environment in which we operate as managers is that we rarely know in advance what path will be the best choice. This can be a tough pitch to sell to your executive committee.  Worse as Roger L Martin has argued even a ultimately superseded business model may be successful long enough to make you look stupid.

We are trained as managers to define our journeys by their outcomes, just like the narrator of Frost’s Two Roads poem. This consequentialist logic is often used to justify the triumph of abstract organisational goals over personal, human or community outcomes in the process.

Perhaps instead we should define our journeys by the path.  Focusing on the process of walking the path changes our questions:

  • What management path values our personal purpose and delivers the greatest personal rewards?
  • What management path values the potential of others and seeks to maximise that potential?
  • What management path delivers on the promise to customers and the community inherent in our organisation and its people?
  • What management path maximises the net positive impact and contribution from all in the organisation?

Asking new questions is an act of leadership. The answers to these questions will help define better ways of working and new models of social leadership that can carry us through the management journeys ahead.

When we cannot know the journey’s destination, perhaps the better challenge is to walk the road well. We can run our organisations to deliver better answers to these questions.  A first step is freeing our people to contribute to their potential to these answers. We may yet find that all our roads lead to the same place, but we will arrive in better shape as managers, organisations, communities and as a planet, if we do so.

This reflection brings to mind another equally beautiful Robert Frost poem, “Stopping By Woods on a Snowy Evening”.  As we go forward into the dark and cold challenges ahead, this reflection challenges us as managers to consider the miles to go and the promises we must keep:

He gives his harness bells a shake 
To ask if there is some mistake.
The only other sound’s the sweep
Of easy wind and downy flake.

The woods are lovely, dark and deep, 
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.
– Robert Frost

Picture credit: http://pixabay.com/en/tree-stump-forest-environment-283218/

Why Work Must Be Human

The future of work must be more human. As we move deeper into a networked knowledge economy we can already see the fractures of the traditional industrial management model.  

Taylorist scientific management that underpins much of traditional management can be so abstract in its consideration of the human role in work that it can border on a psychopathic level of detachment. There are many examples where the parallels between sociopathy and management have been drawn. Some even go far enough as to recommend it.

How to become a corporate sociopath:

  • Lose empathy: refer only to customers and employees as acronyms, abstractions and averages (see FTE, Engagement score, Customer Satisfaction, Average handle-time, NPS, etc)
  • Lose ethics: Compromise your values to maintain your power & your position first in small decisions and then in decisions with larger influence over time (see Management, Hierarchy, Goal-orientation) 
  • Culture: Surround yourself with a culture that glorifies anti-social behaviour and down plays human elements (see Results-focus, Hard management skills, Efficiency, League ladder, Bell-curve, etc)
  • Lose Reality: Learn to withhold information then to spin information to further your agenda. Slowly begin to believe your own spin and create an internal world that shapes your perception and decision making (see Personal Branding, Managing Up, Stakeholder relations, PR, Marketing, Excel model, Corporate Politics, etc)
  • Isolation: Isolate yourself from friends & community and develop an echo chamber for your own views (see Silos, Work/Life Balance, Corporate retreat, Business Networking, Travel, Staff, Yes Men, etc)
  • Paranoia: Develop a healthy sense of paranoia to survive (see Competitive marketplace, Corporate ladder, etc)
  • Be Bold: Start to judge leadership, power and status on absence of fear, willingness to tackle large scale and boldness of action. (see Go Big or Go Home, Burning Platform, BHAG, Too Big to Fail, Bet the business, etc)
  • Narrow Goals: Sacrifice discussion of the diversity of potential goals to chose a single abstract financial measure of success (see EPS, ROI, Make Plan, etc)
  • Power: Begin to see all living things as commodities subject to your power. (see Human Resources, Processes, Policies, Inputs and Outputs, Capital and Labour, GDP, etc)

All in a normal day in many offices…

Making Work More Human

Not all organisations suffer from sociopathy. They balance the inhuman thread in management with other considerations to retain a focus on realising the broadest of social and human outcomes.

Breaking the bubble of sociopathy in dysfunctional organisations takes effort. The steps are not that hard to practice:

  • Listen: Start to listen to the real human voices. Help others to speak and tell their stories. Help others to share their potential and contribute to a better organisation.
  • Engage: Find out other people’s goals. Help them to realise their goals and their potential. Invest time in working for others and understanding their needs more deeply.
  • Immerse: Spend time in the actual environment where work occurs talking to the people doing the work and the customers and community benefiting from the work. See the context and consequences of actions.
  • Reframe: Change the scale of decision making. Look at individual impacts as part of the process. Use names of actual people. Ask ‘what could we do to create more value?’ Ask ‘Is there another way to move forward without these impacts?’
  • Design: Recognise that policies, processes and products are built by and used by real people. Design to their needs and with their involvement.
  • Collaborate: Share your plans with others and allow them input. Let others help shape and improve your work.  Be transparent as to the strengths and weaknesses in this process.
  • Experiment: Test potential decisions. Make room to learn.
  • Lead: Encourage. Enable. Inspire. Don’t impose or impact.

Making work more human does not require us to abandon capitalism, to remove our results focus or be less ambitious. It may make work more challenging but it will also increase our sense of purpose and reward. 

Every employee in an organisation can ask for one or more of these steps to be added to a decision making process. One such request may be novel but it is rarely seen as a challenge to the authority of traditional management approaches. Introducing these techniques acts as a catalyst of change. The impact is to help make work more human. We are all the beneficiary of that action.

Everything Meaningful Happens in a Network

Leaders need to realise human potential in networks.

In our pursuit of efficiency in an industrial management mindset, we can become very linear in our thinking. Inputs create outputs. People have a job to make things happen. People are therefore production inputs with variable quality and productivity. These inputs can be automated away to reduce waste, deliver better consistency and improve efficiency.

This linear thinking runs the risk of unintended consequences and a massive loss of human potential.  Human potential properly engaged with leadership offers exponential opportunities.

More importantly, nothing significant in our organisations happens in a linear process.  Everything meaningful that we do in our organisations happens in a network.

Performance Incentives: An example of the significance of networks

The most straight forward example of linear thinking in organisations is performance incentives.  Organisation after organisation has invested huge effort and dollars in design of performance incentives as a linear process. More incentive should generate more of the desired outputs and more engaged people.

Oddly the outcomes of linear performance incentives are often mixed. Extrinsic motivation doesn’t always work as intended. Intrinsic motivations often matter more to people and those intrinsic motivations are more often concepts that related to our human place in networks, like status, impact on others or sense of belonging in a group.

Some times your linear incentive program is even counterproductive. If you want to find the flaws in any incentive program give it to a group of employees who can share their insights and intelligence. They will quickly identify and exploit any flaws as a collective and enforce group norms on individuals who don’t follow along.

Incentive programs are a key issue disrupting group working behaviours like collaboration destroying value & output. People don’t deliver their performance as an atomised input.  They act and share as part of larger groups.

Our Brains are Networks

As we better understand our human brains, we start to see that their function is less the outcome of linear processes and more the result of networks of neural processes. We don’t evaluate decisions simply on purely financial criteria. In addition to financial benefits, humans consider issues like status, certainty, autonomy, relationships and fairness.

These concepts which come from the network in our brain also reflect our need to function and place ourselves in networks in society.  Mechanistic management processes leave these network functions in our brains out to their detriment.  They are leaving out the meaning that makes for human potential. 

Our Organisations are Networks

Thinking of our organisations as atomised individuals acting in linear processes simplifies our management challenges.  However, our leadership challenge remains to engage the network to realise its human potential.

No matter what the process the official process is in your organisation, you know that networks are the way to influence decisions and get stuff done.  Hierarchies are just a part of the network in the organisation and people are more likely to use the human network than the process hierarchy.

Why else would meetings about meetings even happen? They are never required by the process; they meet the needs of the human network, needs such as increasing certainty, reducing threats to status or increasing relationships with others. If you want to get rid of these wasteful occurrences in corporate life, the answer is not tighter compliance with the process. The answer is better engaging the human meaning in the network in the organisation. Working out loud in a social network is a great alternative to meetings about meetings. People can build their comfort by learning about and engaging a leader working out loud informally before the decision point.

Our Network Relationships Create Value and Meaning

The networks that leaders must manage to create value go well beyond the organisation. The only real value in our organisation is created in external networks.  We only create meaning and value when we interact with customers, partners, suppliers and the community.  Everything else is internal accounting.

As organisations now increasingly can see, these relationships are no longer linear. A salesforce can no longer view as a sales funnel as a series of linear outward pushes to convert a customer. In a social & networked world, it is more evident than ever that the network of influences is what pulls a customer into a sale.  The customer’s every interaction with the organisation, its competitors and influencers is a part of that decision.  The value and the meaning created with customers comes from the network, not your linear sales process.

Community engagement is an even richer network conversation that depends deeply on human engagement, real conversation and the purpose and values that your organisation lives.  Whatever your process for a community sponsorship, it creates no value without the human network effects. 

Choose Human Potential. Look to the Network

Simplifying people to a fungible input measure like number of full time employees (FTE) and treating FTE as inputs in a linear process may be of value for the measurement and control of management. However, the challenge of leadership is to enable our organisations to realise human potential in a network. Whether with employees, customers or the community, the real value and meaning of an organisation happens in the network.

Swapping Hard and Soft

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Management likes to talk about the hard skills and the soft skills of managers. These terms are usually applied backwards.

Hard skills are the decision-making, analytical, performance oriented skills of traditional management. Hard skills are a matter of education, experience and practice. The hard skills are mostly transactional, process-driven and mechanistic. Done right there is little variation in the outcome of the hard skills. If you are a manager for long enough, you can do the hard skills. They are just a ticket to the game.

Soft skills are the people & stakeholder skills, like building trust, fostering motivation, developing people, managing conflict and team building. In most cases, it is a challenge to know whether you have done these skills well and the results of actions in any scenario can vary widely.  These are the skills essential to realising the potential of people in any context but particularly in a world of networked knowledge work. This is the work of leadership and it must be learned the hard way.

Time to Swap

The terms hard and soft are backwards. In a culture of hierarchy, command and control andengineering mindsets, it suits management to think of the manager as engineer tackling the hard work of decisions, managing the machine and delivering results. Hard skills start to sound like they are most important in a culture where power really matters.

Except it is easy to make a decision. It is far harder to have that decision stick and be embraced by other people. Try to coach another person and you soon realise that developing their potential and helping them is not easy.

The soft stuff is what unravels the hard stuff. You need both people and power in management. The soft stuff is far harder than setting the levers on a machine.

Leadership is work.  Hard work.  Importantly, it is the hard work that matters most to realise the potential of your people and to benefit from the future of work in a networked knowledge economy.

Swap your view of what is hard and what is soft.  Better yet leave them both behind as terms that belong to the last age of management.

Image source: Swan feather – http://pixabay.com/en/swan-feather-spring-swan-slightly-16313/

Swapping Hard and Soft

Management likes to talk about the hard skills and the soft skills of managers. These terms are usually applied backwards.

Hard skills are the decision-making, analytical, performance oriented skills of traditional management. Hard skills are a matter of education, experience and practice. The hard skills are mostly transactional, process-driven and mechanistic. Done right there is little variation in the outcome of the hard skills. If you are a manager for long enough, you can do the hard skills. They are just a ticket to the game.

Soft skills are the people & stakeholder skills, like building trust, fostering motivation, developing people, managing conflict and team building. In most cases, it is a challenge to know whether you have done these skills well and the results of actions in any scenario can vary widely.  These are the skills essential to realising the potential of people in any context but particularly in a world of networked knowledge work. This is the work of leadership and it must be learned the hard way.

Time to Swap

The terms hard and soft are backwards. In a culture of hierarchy, command and control and engineering mindsets, it suits management to think of the manager as engineer tackling the hard work of decisions, managing the machine and delivering results. Hard skills start to sound like they are most important in a culture where power really matters. 

Except it is easy to make a decision. It is far harder to have that decision stick and be embraced by other people. Try to coach another person and you soon realise that developing their potential and helping them is not easy.

The soft stuff is what unravels the hard stuff. You need both people and power in management. The soft stuff is far harder than setting the levers on a machine.

Leadership is work.  Hard work.  Importantly, it is the hard work that matters most to realise the potential of your people and to benefit from the future of work in a networked knowledge economy.

Swap your view of what is hard and what is soft.  Better yet leave them both behind as terms that belong to the last age of management.

Image source: Swan feather – http://pixabay.com/en/swan-feather-spring-swan-slightly-16313/