By Sarah Payne —
Everyone likes to harp on new lingo from kids these days.
But do you know what’s just as bad as words like “extra” and “woke”? Corporate speak. In the corporate world, we are often just as guilty of latching onto new words and phrases that don’t make any sense beyond our cube walls.
This is part two of my interview with WorkHuman 2019 speaker Gary Hamel. If you haven’t yet, you can register for WorkHuman 2019 in Nashville here.
Gary told me one of his biggest pet peeves is the word “cascade.” He said: “My dream is … you will never hear anyone again talk about change cascading. It is nonsensical just thinking about social change that cascades. When was the last time that environmental change or change in equal rights or change in any social sphere cascaded from the bureaucrats down to citizens and ordinary individuals? Never.”
Beyond removing “cascade” from your vocabulary, Gary shares other tips below, like how to give employees more control of their work and their compensation and how to take the politics out of performance management.
Audio from the interview is in the WorkHuman Radio episode at the bottom of this post. You can also catch up on part one of our chat here.
If you go back to a pre-bureaucratic world, where the average organization had four or five people, everyone knew how the business was doing. The customers came across your threshold. You could talk to the boss or the owner every day, and she or he would listen to your ideas, presumably.
What happened as organizations have scaled up is that more and more employees no longer have customer-facing roles. They no longer have direct access to the owners or the leaders in charge. And no longer do they know moment by moment how the business is doing. As organizations grew, individuals lost the input that they needed to self-manage.
“As organizations grew, individuals lost the input that they needed to self-manage.”
If I’m working in an operating unit, and a large share of my costs are allocated, and I don’t actually have control over them, and I’m not able to fire and hire internal service providers, that significantly erodes my sense of control. I am no longer an entrepreneur and have little control over many of the critical decisions and the costs that are important to the business. You have to divide large organizations into smaller pieces.
Then, compensation becomes really tied to marketplace outcomes. The CEO of Haier, Zhang Ruimin, said, “We no longer pay our employees. The customers pay.” Every employee’s compensation is directly linked to marketplace outcomes.
Over the last several decades, the idea of empowerment has been a recurring need in organizational thinking. And, yet, we’ve made almost no progress on that front. For sure, we have been going backwards. In recent years, employees report having less control than they used to over both the work they do and how they do that work.
We have to disaggregate our organizations, connect every employee in creative ways to customers, and make their compensation dependent on their real value add. That’s a big change. The good news is that information technology now helps us to do this.
“We have to disaggregate our organizations, connect every employee in creative ways to customers, and make their compensation dependent on their real value add.”
Globoforce: How are companies leveraging crowdsourced pay?
I’ve seen several organizations doing this. I wrote about the largest tomato processor in the United States called Morning Star, a company based in the San Joaquin Valley in California. At Morning Star, employees negotiate their responsibilities with each other. They have about 500 employees, and no managers or supervisors. At the end of the year, the employees choose compensation councils across the company. As a colleague, you present your case of how you did this year against the agreements you negotiated with your peers, and your peers get to comment on that. And then it is a council of your peers that decides how bonuses are allocated.
Globoforce: Do you have advice for leaders who want to move away from the traditional performance process and are looking for a path forward?
You have to separate the two goals of performance management that often get conflated. One is the goal of personal development, which requires coaching and understanding what my strengths and weaknesses are and what I can do to get better. And number two is distributing rewards.
At some very flat companies, people will tell you they spend no time competing for the scarce resource of promotion, and they spend all of their time asking, ‘How do I add more value?’ In a system where peers play a very important role in my compensation, throughout the entire year, I have to think like an entrepreneur, rather than thinking, ‘I’ve negotiated my KPIs with my boss, and all I have to do is please him or her.’ It really forces people to be more collegial, because you can’t safely just say to somebody, ‘That’s really not my job. I’m not going to help you out.’
“In a system where peers play a very important role in my compensation, throughout the entire year, I have to think like an entrepreneur.”
In some organizations, it may make more sense to have team rewards. It may make sense to have bands of bonuses or compensation. But what I can tell you for sure is that, if compensation correlates very tightly with formal ranks, you are going have an organization where people are highly politicized, where a lot of top performers are going to go somewhere else rather than play the political game. So I think compensation has to correlate with real value.
I’ve been a professor for 36 years. From the first time I walked into a classroom in 1983, I realized that at the end of that term, I’d have 60 students. Each one of them would give me a performance review. It would be anonymous. All of those reviews would be available to every single person in the business school. There was simply no place to hide from not doing a good job. And I think that’s the way it should be.
But I think that’s quite separate from the process of having developmental conversations between leaders and employees – making it clear to people where they have the opportunity to grow their skills and capabilities and get better.
The good news is, as you get more and more customer data and peer data around performance, that becomes less and less a political conversation, and more just a factual conversation. And it actually then frees up leaders to focus their energies on helping individuals grow personally.
Globoforce: What impacts can technology have on a work culture?
The pace of technology moves much faster than the pace of organizational innovation. In most companies, their internal efforts at social media are still fairly cursory. Most companies have some kind of internal social web. But to a large extent, this is just a thin skin of social media stretched across the carcass of bureaucracy
We built a platform about a decade ago that would allow thousands of people to come together to solve complex problems. One of the first places we used this was for a project with CIPD in Europe – the largest professional association of HR leaders outside of the United States. We invited 1,700 HR leaders together online to ask, ‘How do we hack the HR functions?’ We were trying to hack it around the problem of building organizations that are more adaptable and more resilient. We were able to engage 1,700 people in the problem solving effort. And now, we’re doing this inside of organizations.
We did a project for the North American division of Adidas, the German-based sportswear company, where we asked more than 3,000 employees to hack the management model, including HR. The question was, ‘If we want to be more innovative, what would you change?’ We built an online course where each week we introduced a new pro-innovation principle. You have to create time and space for people to innovate. You have to value curiosity and diversity.
And then we asked, ‘If we were serious about internal entrepreneurship, what should we change in the way we hire, develop, compensate, motivate, allocate, and plan?’ Over 8 weeks, we had more than 8,000 suggested hacks. We also had a simple way of asking people to evaluate the hacks from their colleagues. So we had more than 9,000 peer reviews. Very quickly, the best ideas rose to the surface, and we turned those into pilots.
In the future, every change program will be socially constructed. If you want to change anything deep and complicated in an organization, the last place you start is with the EVP. Start with the users, the people who are trying to create value, trying to deliver products and services. The first principle of design thinking is you start with the users, and the users are definitely not the people at the top.
My dream is that, within a year or two, you will never hear anyone again talk about change cascading. It is nonsensical just thinking about social change that cascades. When was the last time that environmental change or change in equal rights or change in any social sphere cascaded from the bureaucrats down to citizens and ordinary individuals? Never.
“It is nonsensical just thinking about social change that cascades.”
It goes up. And somehow, insanely, in our organizations, we’ve expected it to go the other way. Virtually every change program that starts top down is a catch-up program. Because by the time an issue gets big enough and complicated enough to be seen notice at the top, you’re already on the back foot.
Stay tuned for our third and final post in this series with Gary, who shares his workplace predictions for 2019 and beyond.