With apologies for the title to Charles Portis, and Rooster Cogburn, this dispatch expands a view we presented in our October post about finding great business ideas in environments of dynamic complexity. By most accounts we have seen lately, bad ideas and decisions seem to outnumber good thinking by a wide margin in business and politics, and the malaise in most Western economies seems to be the sad result. The UK just entered a recession that its leaders saw coming from a long way off, while China’s central planners seem to have successfully engineered a soft landing for their economy. In our view salvation – ideas that is – is readily available, if (and this is a big if) one knows how and whom to ask. According to Joanna Barsh, Marla Capozzi, and Jonathan Davidson, innovation, not the venerable tried-and-true, is the “core driver of growth, performance, and valuation” in all performance arenas”, and at the end of the day people are the best source of most things new and useful. Organizations are, after all, people for the most part, and thus, if companies and institutions are to thrive, their human resources must be the springs from which all rivers flow. We have argued for months that the current cohort of Western leaders seems to be damming things up leading to a damn sorry state of affairs.
Today, given the speed of change in business and technology, plus the interactions among factors that appear to precipitate events impacting organizations combined with the non-linear effects that any strategy will inevitably produce in diverse and remote settings, the prospects of finding clear and unassailable solutions to the transient opportunities, challenges, and threats (OCTs) that large, global companies face are daunting. And, given the inhibiting effects of contemporary management practices coupled with the risk aversion and impaired decision making capabilities of top management teams (in the West mostly), the chances for heroic insights are about as likely as catching rainbows. Notions that may seem promising at one point in time often become irrelevant or downright harmful later (e.g., speculating in sovereign debt). It follows too that alternative sources of ideas in the existing milieu – individual managers, employees, suppliers, customers, stakeholders – have only relatively fleeting usefulness. The game of commerce is changing so fast that organizational heroes and stars come and go faster than contestants in American reality shows. The corpuses of knowledge underpinning many disciplines today have become too vast and convoluted to be grasped wholly, and professionals must therefore concentrate on sub-specialties to attain mastery. Knowledge workers, the mainstay of developed economies, are consequently becoming increasingly specialized, and their usefulness tends to be restricted to relatively narrow areas of practice even when they are allowed out of their silos. Thus, their value in fluid conditions is often spotty at best, and probably only temporary overall (e.g., Flash programmers at Adobe?).
Sell when you can: you are not for all markets.
William Shakespeare, As You Like It
So, how can any organization hope to remain buoyant over time in the shifting tides of change? We contend most large organizations can’t hope to do it much longer; especially the ones in the West. Big companies can no longer be directed effectively with traditional top-down management practices. We believe the big companies that will enjoy sustainable success in the future will likely have a faculty akin to a well-adjusted mind in the form of an integrated structure comprised of
(1) an Upper EGO (Top Management Team),
(2) EEs (employees mostly, but also customers, suppliers & other stakeholders), and
(3) E2.0 (Enterprise 2.0 – emergent social software platforms) –
see our description of the model in our April 13, 2011 dispatch.
Just as “adjustment” plays a role in an individual’s attempts to cope actively with the daily sturm und drang of life, so too does integration play a key part in an organization’s capacity to deal with the demands in its surroundings. As business conditions become more unfavorable due to declining resources, restrictive regulations, global warming, aging populations, technology change and other factors, fortune will surely favor the most highly adaptive/integrated organizations. Ultimately, an organization’s sustained ability to innovate is the key to its ongoing adaptation. Thus, a steady flow of big and little ideas that effectively address the seemingly chaotic presses from the internal and external environment is essential and there lies the rub – finding a consistent means to generate, find, and implement the right ideas, from the right people, for the right needs, at the right times. We think a well-tuned (i.e., well integrated) combination of employees, Top Management Team (TMT) and information sharing technologies are required to do this effectively. We also suspect Eastern entrepreneurs will seize this advantage sooner and more effectively than their Western rivals.
Taking each of the components in turn, we believe the EEs are the primary sources of ideas, to be sure, because they are in the best positions to adequately decipher each presenting situation that arises in the course of ongoing organizational processes and transactions, as well as the underlying problems that inevitably occur. They are usually where the action is. But equally important, they are also in the best place to be ignited by the OCTs they find. They, far more than any distal groups of executives or support groups, are most likely to be excited or moved emotionally by what they find, and possibly go so far as to empathize with the people to whom their companies are attempting to market and sell. They are also in the best position to understand what they are dealing with. They see in the most tangible ways possible how they can enable their companies to provide value to others, and the effects it can have on the people they serve. As a result, they stand to develop much more of a grasp and passion for the specific responsibilities they must assume, and the fires they develop can provide the necessary heat to cook up and serve great solutions, big and small. Simply doing is automatic to most experienced workers, but thinking of ideas to improve procedures or solve problems for other people takes real effort, and effort requires fuel. Passions, when and where they exist, also tend to harden the resolve that is often needed to buck existing practices and try new and more beneficial ways of doing things. It takes more power to diverge than to roll with the flow.
This is a crucial and frequently overlooked consideration in contemporary mechanistic management paradigms that regard employees as costly cogs that work primarily for their salaries. A good and proper OCT (i.e., meaningful and not too hard, not too easy) has a way of exciting most people; it makes them want to exert greater effort, and it tends to elicit great commitment to the tasks required (i.e., more willingness follow through, to persevere, to succeed, and to stay), because it gives people a chance to do something signficant; to leave a mark that shows their time on the Great Blue Ball was worthwhile. In some situations, extreme OCTs can induce people to risk their lives.
More generally, these elements are regarded as the foundations of engagement (see Macey & Schneider1 for a thorough review). Research shows engaged workers do more and last longer than their disengaged counterparts, and these outcomes are the fundamental elements of GDP growth. And speaking of fundaments, OCTs with significance potential create occasions for employees to satisfy needs for mastery, recognition, and esteem (i.e., face). At an even deeper fundamental level according to life history theory, OCTs create potentials for individuals to distinguish themselves for breeding purposes. The hens on our farm are usually drawn to the roosters that provided the best protection and find the most bugs and worms. We’ll explore libidinous topics such as these more fully another time, but for now we’ll simply note that sources/providers of good ideas (i.e., innovators, transformational leaders) tend to attract others in most social structures; especially when they help others solve a vexing problem they all share.
So, what is significant?
At one level, it may be regarded as a function of perceived importance. If an offering is important to someone in the value stream like a customer, it should be significant to some degree to an employee immediately up stream. At other levels, significance stems from broader considerations about organizational goals and beyond extending to societal and environmental concerns. This is where the TMTs are usually in the best position to provide those higher level referents to enable the EEs to see the broader and more distal relevance of their actions. Integration in this sense is a matter of coordinating the broader and future-oriented goals of an enterprise with the more immediate, tactical and personal objectives of the workers. And, in our view it must be accomplished reciprocally. That is, the executive must establish priorities that promise to produce outcomes that please and appease a variety of constituents such as stockholders, rating agencies, regulatory bodies, suppliers, and environmental watchdogs. But, the purposes they define must also resonate with their employees and certainly their customers as well. Patagonia provides a good example to illustrate what we mean. The company has managed to achieve a remarkable synthesis between its business aims and its employee’s aspirations with the happy results of growth rates at the high end of the industry average range and remarkably low employee turnover. According to the company’s CEO (Casey Sheahan) Patagonia’s mission and culture enable their employees to “know what they do each day is contributing towards a higher purpose—protecting and preserving the areas that most of them love.” Patagonia’s founder and Chairman, Yvon Chouinard adds, “Every time we do the right thing, our profits go up.” The right thing at Patagonia lies at the convergence between the needs of people (customers, employees) and the needs of the planet. Patagonia’s mission: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
Passion and purpose go hand in hand. When you discover your purpose, you will normally find it’s something you’re tremendously passionate about.
– Steve Pavlina, Blogger and Author
Our experience in supporting talent acquisition efforts for various companies indicates most educated individuals in the global workforce want to join organizations to obtain more than salary and benefits. They want to be in the company of others to accomplish more than they can hope to do alone. They want to do something meaningful on a grand scale, and they want to share the experience, to collaborate with people they respect. Educated people tend to be socially and environmentally aware, and they recognize at least on an intuitive level the connections that exist among systems in their surroundings. They know that any action, large or small, has an impact that can help or harm. Thus, when EEs are provided chances to do work that provides benefits that not only meet the needs of a customer, but also meet the needs of their teams and their companies that, in turn, are attempting to meet the needs of other organizations, the communities in which they reside, their nation, or even the planet, they know are doing the right things. Opportunities to do things that are truly right are not abundant and that is part of their appeal. Significance, therefore, varies to the extent these EEs can do meaningful work, the right thing. But, it also varies to the extent EEs receive feedback about their results and recognition from other individuals who matter to them (again, refer to life history theory). Feedback and appreciation among collaborators usually take significance to the upper limits of what can be achieved.
The Jon Katzenbach and Douglas Smith book2, The Wisdom of Teams, provides some compelling accounts of the potency of purpose to work teams, as have many, many others for a long, long time. Thus, we are often, too often, puzzled by the numbers of organizations with Upper EGOs who seem to regard the value they deliver to stock holders as the necessary and sufficient mission of their businesses. The disappointing engagement research reported by the likes of Hay McBer, Corporate Leadership Council, and Valtera show that tact provides little long-lasting inspiration. Be that as it may, accounts in The Wisdom of Teams also speak to the significance of relationships among team members. Something deeply profound seems occur among most individuals who have the occasional great fortune to work cohesively and cooperatively with others and succeed in accomplishing truly meaningful objectives. The combination of collaboration and achievement is important, because these characteristics are individually not fully engaging or satisfying. Here again, we are referring to the concept of integration, and by that we mean a blend of characteristics is required for a real high performing team to emerge. The word, emerge, is important in this instance because a syncronicity among a variety of characteristics is necessary in our view for emergence to occur – for a team’s outputs to exceed it’s inputs, for the whole to exceed the sum of the parts (2 + 2 > 4). Something special sometimes, not always, happens when a competent and willing group of individuals is given a chance to do a right and noble thing. But, the potentials or odds for exceptional results, high-performance, and perhaps, emergence are increased to the extent the following characteristics are also present among team members:
- The team has a diverse and complementary blend of knowledge, skills, abilities and personal characteristics (e.g., thinking styles, traits); the presence of broad, deep, and abundant talents and style increases a team’s options, and it tends to create opportunities for compensatory and harmonizing capabilities (e.g., some to focus on details, others to focus on the patterns among details); at the end of the day human capital always establishes the base for what any collective can achieve. Teams with the best players generally have the best potentials for success.
- Individuals on the team are aware of one another’s contributions – they are able to see, and therefore, to recognize and appreciate the work of their team mates.
- The team has a shared knowledge of results – each individual can see the score, the progress the team is making toward its goal(s), and the impact that work is having on other goals; feedback also enables a team to refine and improve its performance, to practice, learn, change, and adapt.
- Team members are mutually dependent – they are able to see and appreciate how the effectiveness of their individual work depends on the work the other team members are doing; they are allowed to recognize that both their collective goal and their purely personal aspirations can only be achieved by the joint efforts of the entire team.
- Everyone contributes – the upper limits of team performance tend to be constrained by the performance of the lowest contributor(s); aside from low performance results, poor contributors often have detrimental effects on a team’s cohesion, and they usually distract other team members from their real purpose. Consistent low contributors sometimes have toxic effects on a team’s performance potential.
- The team has champions – at least one individual from the ranks must set the performance bar for the others, and someone must demonstrate tangible, if not passionate, commitment to the direction that has been set for the team; someone has to light and hold a candle.
- Individuals are willing to subordinate their personal interests to the interests of other individuals and the team as a whole – teams require give and take among individuals.
- The team has a set of rules and norms to guide their internal and external interactions and decisions in ambiguous situations; guidelines minimize conflicts and other sources of friction and delay; norms reduce wear and tear on cohesion.
- The team has sound procedures and processes to execute – the means to the objectives and goals should facilitate the work (i.e., reduce variability, errors, and strain).
Note: All of the points above are cited from memory and none were probably conceived by us, so we hope the original authors (e.g., Katzenbach & Smith, Deming) will not be offended by our failure to recognize their work.
Most people in all cultures are hard-wired to be social, to come together in collectives of various sorts (see for example3 Dawkins  Wilson [1975, 1979] or Kenrick et al. ). The characteristics above tend to reinforce and hasten the bonds that already have the potential to develop naturally. The few people in any societies who don’t share a sense of attraction or mutuality are generally regarded as maladaptive or disordered in some way (e.g., autistic, antisocial or narcissistic personality disorders). Evolution tends to favor species that work together and care for one another. Thus, we are predisposed to flock to survive and thrive and clearly some flocks fare better than others. We think the prospects for the flocks we call teams, organizations too, are enhanced by the characteristics listed above, because these features tend to align, unite, and draw the best out of individuals. Nature also shows us that a combination of symbiotically enhanced activities often produces nonlinear results.
Incidentally, our prospects for breeding – perhaps one of our most deep-seated, genetically determined motive – are enhanced to the extent we not only add logs to the communal woodpile, but also to the degree we distinguish ourselves in doing it – i.e., we add more or better wood than most. According Shoshana Zuboff of the Harvard Business School, “Value has been understood as something companies create . . . But in this new world value is not created inside the organization. It rests in the unfulfilled needs and desires of the individual.” Organizations stand to benefit from this new state of affairs to the extent they are able to unlock this potential by finding friction- and barrier-free ways to enable EEs to express themselves and meet their needs for sure, but TMTs must also cue up high aims to truly ignite rather than dampen the passions of their EEs.
When you set yourself on fire, people love to come and see you burn.
– John Wesley, Christian Theologian
Now for the last component for integration
The logical issue from the prior discussion concerns the formidable challenge of enabling (1) aligned compelling purposes (individual & collective), and (2) cooperative, cohesive participation among talented individuals to foster conditions that enable a high-performing organization to emerge, at least for a while. Large companies always have at least a few teams hidden within the labyrinths of their organizations that are performing at high levels and many others with the potentials to get there. Very few businesses in our experience can claim most of their constituent parts perform at optimal levels, and fewer still can honestly assert their organizations on the whole are high-performing companies. Similarly, some TMTs have been successful in articulating compelling courses of action (i.e., inspiring missions and sound strategies & business models) for their enterprises, some organizations have amassed highly talented and energetic workforces, but only a few have done both and fewer still have effectively capitalized on their good fortune when they do. We think the primary reason is because they do not have effective means of . . .
- finding, aggregating, and allocating the talent they need to bring to bear on shifting sets of priorities in differing levels and locations in their businesses (i.e., in differing segments, countries, business units, etc.); business OCTs are frequently not fixed, stable or predictable, and organizations must respond fluidly (i.e., be more like ameoba and less like a block of wood), and
- aligning the objectives and activities of shifting groups of individuals so they can cohere into cooperative, collaborative, interactive teams, and thereby inspire and amplify their individual efforts.
An intent of this blog is to assert the social software platforms represented by the rubric, Enterprise 2.0 (E2.0), provide the means to do these things and do them well, and therefore, to provide the necessary ingredient to complete the integration of components necessary for a complex organization to operate as adaptive system. We think a company has to be a high-performing organization to just to be regarded as a complex adaptive system (with emphasis on adaptive). Social network platforms provide a means for Upper EGOs and EEs alike to present attractors in the form of alluring questions, puzzles, teasers that are directly related to OCTs that companies and workers must confront and resolve to be successful in achieving their collective aims. A small community of top scientists struggled unsuccessfully for over 15 years to delineate the underlying genome of a key genzyme of the AIDs virus. When the problem was presented on a social platform to a larger/broader community of Foldit users (gamers, not scientists) the mystery was solved in three weeks.
- E2.0 enables companies to reach across boundaries (geographical, temporal, structural, cultural) fluidly and quickly on an as needed basis to attract and enlist the talent most competent to address their needs and drive their strategies, and this capability enables companies to tap extremely large, diverse crowds of individuals who are relatively independent of any collective biases/baggage save the pristine influences of the goals, and these features alone often lead to the wisest of outcomes.
- E2.0 enables companies to create idea market places where the true worth of notions can be assessed and weighed; sellers and buyers can readily find ideas (and recognize the sources), and the resulting social ratings, likes, and tags can show the extent to which the ideas are valued – contributors can thereby gain esteem (i.e., breeding points) in communities that matter to them.
- E2.0 enables companies to show explicitly in real-time how the ideas are being assembled and used, and eventually, the to illustrate the impact on the initiatives that companies are attempting to pursue; companies and EEs can keep score of the collective and of each individual; high-value workers tend to welcome feedback on themselves, and they tend to place the most value on the feedback of other experts (i.e., people they respect) – E2.0 puts them in the company of people that matter to them.
- E2.0 enables individuals to find opportunities to be in the company of others, albeit virtual, in pursuit of noble aims, and thus, to satisfy deep, biologically based needs for safety, security, affiliation, esteem, recognition, mastery, achievement; high-value workers desire a means of expression and a place to show off says David Sacks, the CEO of Yammer: “Now we are seeing that sharing information is power. The more you share, the more you can help people—and the more it becomes apparent you’re an expert and a valued employee.”
- E2.0 enables individuals to discover and build upon the ideas of others, to express their own ideas for others to heed and follow; networks tend to generate a cycle of cross-fertilization and mutual reinforcement – new ideas provoke more ideas within an engaged and talented collective.
- E2.0 enables participants to flit in and out as they deem fit; thus, it matches the work styles of the modern workforce (see, for example, The New Collaborative Workspace from Cisco).
- E2.0 offers a structure and a process for exchange, a place to set a common goal and the processes for achieving it; it brings order to what might otherwise be a chaotic and unfocused maelstrom of activity; E2.0 also provides a potentially manageable channel for employee empowerment for the TMTs who harbor the fear of losing control of their workers and their companies.
- E2.0 offers opportunities for managed experimentation (Deng valued this, and the Chinese still follow suit) and fast implementation – new ideas can be quickly tried out on small scale, evaluated on a large scale, with the results made available in real time; thus, organizations can plow through a much larger number of high probability innovations in a shorter period of time – a good fisherman knows that where one casts a line is important, but it is also important to make a lot of casts.
One cannot resist an idea [or technology] whose time has come – Victor Hugo
Among the findings and implications of the book, Groundswell4, is the view that social software technologies (E2.0) may be enabling customers, employees, and ordinary citizens to coalesce and to share, and in the extreme, usurp the absolute control that leaders have historically maintained over the aims and activities of their organizations. Increasingly, when the people in charge, the Upper EGO, fail to meet the needs and expectations of the people they ostensibly purport to serve, they can expect to face an upsurge of united opposition that found its footing in social media. Undeniably, if TMTs do not provide a social software platform, the EEs will use their own (e.g., Facebook, Twitter, YouTube) to find the OCTs they want. TMTs have to recognize a social software platform is like a party that will take place regardless of whether the TMTs attend or not. If they choose to participate, they can at least try to influence what happens there, and what is said about them. If they stay home, then they have no sway whatsoever. Seen in another way, E2.0 is like a gun: a technology that can enable one to provide and protect if aimed and used properly. Used incorrectly, however, it can cause great harm and even death to a user and others he or she cares about. E2.0 is ultimately a mechanism that greatly enhances the prospects for individuals, TMTs and EEs (and customers and other stakeholders) to satisfy their profoundly deep and powerful needs to do significant work in the company of people they care about. It makes people happy.
Purpose may point you in the right direction but it’s passion that propels you.
– Travis McAshan, Entrepreneur and Web Strategist
Happiness matters, and in more ways than most of us think. The editors of the Harvard Business Review featured the topic in their January-February 2012 issue. According to Gretchen Spreitzer and Christine Porath in an article5 in that issue, “Happy employees produce more than unhappy ones over the long term. They routinely show up at work, they are less likely to quit, they go above and beyond the call of duty, and they attract people who are just as committed to the job.” More specifically, happy workers have 31% higher productivity, 37% higher sales, and three times more creativity. 6 If we take the concept of engagement as a proxy for happiness, some additional research findings are equally compelling. Watson Wyatt, for example, found offices in professional service firms with engaged employees were up to 43% more productive than their disengaged counterparts. Their most striking findingis the gaping gap (52%) in operating income between companies with highly engaged employees and companies whose employees have low-engagement scores. Companies with highly engaged employees improved 19.2% while low-engagement companies declined 32.7% in operating income during the study period. One company, New Century Financial Corporation, a US specialty mortgage banking company, discovered that account executives in the wholesale division who were actively disengaged produced 28% less revenue than their colleagues who were engaged. Furthermore, those disengaged account executives generated 23% less revenue than their engaged peers. Engaged employees also outperformed the not engaged and actively disengaged employees in other divisions.
Extending the gun analogy we can see the implications for the West and East are clear: when rivals ultimately clash, the one with the gun will likely prevail. If Chinese workers are happier than American workers, then the West is facing a very sad future.
Its time to put something between me and the sun.
When the talking is over it’s time to get a gun
When the party is over it’s time to get a gun
Miranda Lambert, Time to Get a Gun
1 Macey, William H. & Schneider, Benjamin (March 2008). The meaning of employee engagement. Industrial and Organizational Psychology, 1, 3-30.
2 Katzenbach, Jon R. and Smith, Douglas K. (1993). The wisdom of teams: Creating the high-performance organization. New York: HarperCollins Publishers, Inc.
3 Dawkins, Richard (2006). The selfish gene (30th anniversary edition). New York City: Oxford University Press.
Wilson, Edward O. (1975). Sociobiology: The new synthesis. Harvard University Press.
Wilson, Edward O. (1979). On human nature. Harvard University Press.
Kenrick, Douglas T., Griskevicius, Vladas, Neuberg, Steven L., Schaller, Mark (2010). Renovating the pyramid of needs: Contemporary extensions built upon ancient foundations. Perspectives on Psychological Science, 5, 292-314.
4 Li, Charlene and Bernoff, Josh (2008). Groundswell. Forrester Research: Harvard Business Press.
5 Spreitzer, Gretchen & Porath, Christine (January-February, 2012). Creating sustained performance. Harvard Business Review.
6 Lyubomirsky, Sonja, King, Laura, & Diener, Ed (2005). The Benefits of Frequent Positive Affect: Does Happiness Lead to Success? Psychological Bulletin, 131, 803-855.
Image from: http://www.bk.fudan.edu.cn