Take the job (statistic) and shove it!

The U.S. Bureau of Labor Statistics jobs report is out for the period ending September 2014. There is an interesting tidbit that jumped out when one compares the number of voluntary separations – those who quit outright – to the overall job openings. The latter number remained stable month to month (in fact, it went down slightly). The number of people who quit jobs, however, went up: “The number of quits increased from 2.5 million in August to 2.8 million in September. This was the highest level of quits since April 2008.” It seems that, statistically, at least, many of those who quit found jobs, as the number of hires increased by a corresponding amount. But that’s a statistical trick: the hires rate would obviously include people who were hired after months of searching and long – some would say overly long and onerous – recruitment processes.

The US BLS claims that “the quits rate can serve as a measure of workers’ willingness or ability to leave jobs,” possibly suggesting a healthy availability of jobs in which to land when jumping out of current employment. However, given the relative stability of openings, this glib conclusion should be critically questioned.

There is an old adage which states, “people don’t quit jobs, they quit managers.” Given the meanness that has crept into corporate cultures of late, the (un)natural selection of dark triad managers for promotion to leadership positions, and the behavioural trickle-down effect in which aggressive bad-boy behaviour at the top of the status hierarchy is emulated by those lower down as a de facto road to career success, I’m not surprised at the fact that workers are jumping ship in ever greater numbers. I personally know of several people who left one of Canada’s so-called Best Places to Work because the environment was so unbearably toxic. In another case with which I am familiar, a dark-triad manager was given a free rei(g)n of terror until fired, apparently for financial malfeasance. Only after did the manager’s abusive behaviours become known. (And the employee engagement survey was of no use in ferreting out the problems because the environment was unsafe rendering the results unreliable.)

People don’t quit jobs, they quit managers. Is the increased turnover rate in your organization – perhaps concentrated in one or two particular areas – the proverbial canary in the managerial coal mine?

It’s all fun until someone acts like a jerk

It is, perhaps, the fundamental issue of ethics and morality: To what extent do I support a company or service whose moral conduct is only slightly north of reprehensible? If I save money or gain convenience, does that excuse making marketplace choices that ignore the company’s management practices and leadership behaviours? Do I therefore become an enabler of behaviours that I would otherwise not tolerate amongst my own employees, friends, or family members?

This is the dilemma now encroaching on the collective consciences of many who use and support the (supposedly) ride-sharing (but in reality, alternate taxi service), Uber. The New York Times has a piece that deals with this question of personal morality. The behaviour of Uber’s leadership “signals a winner-takes-all culture that justifies any behavior so long as everyone is getting rich.” As I wrote about the other day, hyper-competitive cultures often lead to systemic dysfunctions among an organization’s members as those lower down in the status hierarchy emulate their superiors – who, problematically do indeed consider themselves to be superior to just about everyone else. The NYT article quotes Lisa Abeyta, founder of a tech start-up in Albuquerque as noting, “There is a difference between being competitive and being dirty. It is bad-boy, jerk culture. And I can’t celebrate that.” And then she deleted the app from her mobile.

Ms. Abeyta’s decision is one we all have to consider: Do we, collectively, act as enablers of “bad-boy, jerk cultures” by supporting misbehaving leaders though our purchases? Or, is it the right thing to do in our ubiquitously connected and pervasively proximate world to stand together in saying to such leaders, “your behaviour is unacceptable in today’s world.” Uber is but one example. Amazon is clearly another (and I, personally, have stopped ordering through Amazon because of their horrendous labour practices).

Toronto’s mayor-elect, John Tory, claims Uber is here to stay. Perhaps. He, of all people, having just ousted bad-boy, jerk leadership from city hall, might want to reconsider lending his support and endorsement to analogous behaviours in other corporate leaders.

Uber-competitive leadership culture: A winning strategy?

Many bits have been spilled this week over Uber, the Silicon Valley start-up that has disintermediated the highly regulated and nepotistic taxi industry. Toronto mayor-elect, John Tory’s comments notwithstanding, Uber’s sustainability will be a question for a future tech retrospective. What merits closer examination and reflection is the sustainability of its culture, and indeed, the cultural values consistently rewarded by today’s Silicon Valley investors. In a blog post yesterday, Sara Haider laments that Silicon Valley venture capitalists “tend to value ruthless execution and short-term success…and we make media heroes out of founders that deliver on what we value.” Fred Wilson, himself a VC, points out Uber’s culture of “ruthless execution combined with total arrogance” combined with “about the best execution I’ve witnessed in a long, long time.”

These days, hyper-competitive behaviours that often typify start-up cultures and are always instigated from the top inevitably lead to toxicity throughout the organization. Or so it seems. (And there is good research that supports the notion of “cascading abuse” in organizational cultures.) Not surprisingly, these organizations are, more often than not, led by relatively young men who have yet to mature into seasoned leaders. Clearly, evidence suggests that, at least in the short to medium term, such willful disregard for employees’ well-being (and especially those low-level workers who actually supply the services; hello Amazon), customers (viz. Uber’s laissez-faire, puerile attitude towards its users’ privacy), and the public at large (goodbye Enron) can yield stellar financial returns (not to mention the odd jail term here and there). However, over the longer term, misbehaving CEOs  arguably destroy value for shareholders, tarnish the brand, and stifle innovation.

“Culture eats strategy for breakfast” is an aphorism commonly attributed to Peter Drucker (and popularized by Mark Fields of Ford Motor Company in the context of a massive culture change effort in 2006). This claim was not intended to cast culture and strategy as opponents, but rather to highlight the polarity tension between them. Too much of one in the absence of countervailing effects of the other will lead to the inevitable demise of the organization. Instead, contemporary leaders must enable a culture that supports sustainable, long-term strategy. What is needed is less emphasis on bad-boy, celebrity, start-up anti-heroes and more visibility for leaders who live values that are not typically associated with psychopathy.

That moves me to ask: Are hyper-competitive start-up cultures necessarily toxic? How can they be created to be otherwise?

Leaders with Hot Pants

I am struck this morning with the coincidence of three items in the Globe and Mail’s Report on Business. There is the report on Keurig’s response to the pending lawsuit alleging anti-competitive practices brought by Coffee Club. [Disclosure: In 2011, I did a culture change engagement for a fee at Green Mountain Coffee Roaster’s Toronto plant. GMCR is the parent company of Keurig.] There is the item on Canada’s Competition Bureau looking into alleged restrictive trade practices at Loblaw. And finally, there is the piece on Telus joining BCE in its challenge to Rogers’s exclusive provision of NHL hockey content to its own subscribers contrary to “the CRTC’s vertical integration rules, which require companies that both create and distribute media content to offer it to their rivals to distribute as well.”

In each of these cases, senior leaders from the respective organizations respond with a trite, deflective response that sidesteps the issue at hand. Moreover, the response attempts to justify the behaviour being called into question. For example, Stéphane Glorieux, president of Keurig Green Mountain Coffee Inc.’s Canadian and U.K. divisions,

likened Keurig’s stated incompatibility with rival coffee to apps made to run on Apple Inc.’s phones and tablets. “When you play with an app, you have to go through a platform called Apple. So it’s a little bit of the same principle. That’s how we view ourselves so that we can control our quality,” he said.

What nonsense! The issue here is that Keurig includes an interconnect mechanism that prevents non-Keurig K-cup coffee pods from being used in the new series of Keurig machines. So, it’s not quite the same as Apple managing the App Store for new applications to control quality. Rather, it’s like a car manufacturer insisting that only its brand of gasoline can be used to fuel its vehicles and including a technological lock to prevent you using any other product. Or, to bring things back to the kitchen, it’s akin to a toaster manufacturer insisting that you buy only its proprietary bread to use in its toasters, so that the manufacturer can control the quality of the toast. (Note to M. Glorieux: Have a look at Chamberlain v. Skylink in the U.S. Federal Court)

In Loblaw’s case, the Competition Bureau is seeking access to supplier contracts from a dozen major grocery suppliers “searching for information about potential “reprisals or repercussions” from Loblaw” including requirements that suppliers financially compensate Loblaw if a Loblaw competitor offers the supplier’s products on special and Loblaw chooses to price match, among other similar allegations. Loblaw’s response? “Loblaw spokesman Kevin Groh said … Loblaw doesn’t believe its “practices are inconsistent with a competitive market.””

Finally, over at Rogers, the now-owner of NHL Hockey broadcast rights streams hockey content to anyone’s Internet-connected devices, irrespective of supplier. However, it makes its proprietary GamePlus app available exclusively to Rogers’s customers, allegedly creating a vertical integration that requires die-hard hockey fans to subscribe to Roger’s service for a full online experience, including a much touted “ref cam.” As Telus joins BCE in launching the complaint to the CRTC, Rogers’s rather telling, if not childish, response is to refer to BCE as a “crybaby” and minimizing the impact on customers of this decision: “we don’t believe we transgressed any rules and we will continue to focus on delivering innovation for consumers and not fighting little petty fights such as this.””

The commonality of these three news items for me is how they demonstrate the response of imperious leaders who defiantly place themselves above what a reasonable and objective observer would deem as fair play, and minimize or ridicule those who would call them on what the common person would consider aggressive and anti-competitive behaviours. Unless these individuals have a greater degree of psychopathy than usually found in minimally dark triad leaders, they cannot, in their heart-of-hearts, truly believe the responses they spout publicly—responses that are clearly disconnected from market realities. To say that their proverbial pants are on fire might be going to far. But warm to the touch?...

Members of organizations look to their organizational leaders for tacit guidance on what is acceptable and expected behaviour, especially with respect to getting ahead in the organization. Irrespective of the espoused values that may be laminated or bronzed and hanging in the lobby, it is the in-use practices to which people pay attention. No one should be surprised when members of Keurig, Loblaw, and Rogers – who see their leaders skirt ethical behaviours and the truth in order to promote the ends of their companies – do the same. What those quoted in the Globe articles are providing is not leadership, or at least the type of leadership that is consistent with the complex demands of the 21st century.

A Brief, 3,000-Year History of Organization

One question that periodically surfaces among my leader-clients is, “how did we ever get into the leadership mess we’re in these days?” What often passes for leadership is often bull-headedness, the ability to drive to accomplish a goal with almost obsessive determination, and the overarching drive to win at any and all costs. The C-suite seems to be overrun with dark-triad personalities. Organizations tend to create elaborate shields of willful ignorance so long as the leader in question – and it doesn’t necessarily have to be the hierarchically most senior person – continues to bring in the results.

In other words, how did we get to here?

A Brief, 3,000-Year History of Organization takes a stab at answering that very question. It begins with a foundational premise of human interactions: the dominant way in which we communicate with each other as a society enables the structuring institutions of that society. It is an argument that implicates technologies throughout Western history, but is not technological determinism, the doctrine that says technological advances drive everything with an unwavering inevitability. Rather, drawing from the arguments of people like Eric Havelock, Harold Adam Innis, and Marshall McLuhan, I would suggest that throughout history, communication technology enables environments that tend to favour structuring institutions of society most consistent with the way in which people interact with each other. That is, “we shape our tools and thereafter our tools shape us.”

Which brings us to the history of those great, structuring institutions, organizations. The paper traces the way Athenian democracy organized itself in a remarkable contemporary way, promoting inclusiveness, participation, knowledge sharing, and prevention of concentrated power in the hands of a few, privileged men. As communication technology changed, so too did the organizational institution: bureaucratic power emerged very much concentrated in the hands of a few, very privileged men at the top of the Roman Catholic Church in the 11th and 12th centuries. The manuscript culture that drove the Church gave way to a culture driven by mechanized print that enabled the Enlightenment, early modernity, and paved the path to Industrial Age organizations and management. This, of course, gave us the industrial and mechanistic 20th century and the foundations of modern management.

In the paper, I argue that the 20th-century organizational story takes two, parallel paths, one that creates the managerialist worldview, another that provides a more humanistic approach. If 20th-century management (and most MBA education) served the purposes of the former approach, the latter is emerging as better serving the complex challenges of relationship-oriented organizations in the 21st century. Finally, I introduce Valence Theory as a foundational, contemporary theory of organization that both accounts for the past 3,000 years (including the 20th century), and explains the complex, emergent, and downright weird organization forms and dynamics that we have seen more recently.

A Brief, 3,000-Year History of Organization. Download the paper here.

Congratulations on Your Engagement. Or are you feeling unsafe?

One of my most popular tweets recently was this one:

Employee engagement surveys are largely inaccurate in unsafe environments. Thus, reasonable result may equally be sign of systemic problems
— Mark Federman (@MarkFederman) October 21, 2014

Conventional thinking – often promoted by HR specialists and others holding a managerial worldview – says that anonymously surveying employees for their: (pick one) engagement, satisfaction, motivation, net promoter score… provides management with useful metrics through which they can better understand how to get more productivity from their workers. The logic suggests that a better understanding of what’s working well and what could use some tweaking helps to create workplaces that enable job satisfaction, continually improving productivity, and long-term employee retention. Or so goes the theory, credited to Elton Mayo, famous for his interpretation of the Hawthorne Experiments, way back in the late 1930s.

In practice, despite the plethora of engagement and satisfaction surveys, Gallup’s State of the American Workplace report found that 70% of workers were either disengaged or “actively disengaged” in their work, and “emotionally disconnected” from the place in which they spend the vast majority of their waking hours. Yet, it is often the case that in-house engagement surveys (usually administered by an outside, third party to ensure anonymity) tell a very different story. With their own evidence seemingly refuting Gallup’s results, senior leaders enjoy a sense of personal satisfaction, if not personal pride, in their ability to create the exception-to-the-disengagement-rule workplace. Not so fast…

There is an additional, critical factor at play which calls into question the entire methodology surrounding metrics that purport to measure employee engagement. Imagine the following situation: You work for a boss who is known to take personal credit for things that happen well, and blame subordinates for mistakes. A boss who has a reputation for “managing up,” that is, ensuring that their own superior thinks well of them without concern for the effects on peers or those who report to him/her. A boss who is known to publicly belittle employees and has a temper with a short fuse. Now you are asked to complete the employee survey. Said boss strongly encourages full participation with the tacit (or not-so-tacit) suggestion with respect to the expected outcome. S/he may even offer perq-y bribes around the time of the survey like offsite meetings, sponsored lunches, or other material tokens.

Especially if the boss displays tendencies towards the “dark triad” personality type, employees have a sense that their future work assignments, availability of desirable opportunities, positive performance reviews (and the associated bonuses or salary increases) have become intimately entwined not only with participation in, but significantly, with the results of the survey.

In many organizations, and particularly among workgroups that are led by problematic managers, employees do not work in an environment in which they feel safe and secure in their employment. Such managers use the very powerful, coercive, and blunt instrument of performance reviews that determine who survives, who thrives, and who is relegated to that special HR hell of “Performance Improvement Plans” (or similarly euphemistic first steps to firing) to keep wayward employees in line. In doing so, they create environments of fear, rather than autonomous and active engagement. Despite the nominal anonymity afforded to the surveys, it is often not difficult for a manager to infer whom among his or her direct reports are not towing the “satisfied worker” line, often via the free-form comments or so-called verbatims. Quite understandably, employees are reluctant to give their honest opinions and advice, especially if they have had the opportunity to see retribution being meted out to a would-be whisteblower.

Thus, for any given employee engagement or satisfaction survey that shows reasonable but not necessarily stellar results, it may well be the case that employees are reasonably satisfied and engaged. On the other hand, these results could represent the practical reality that employees who feel unsafe in their workplace and cannot afford to jeopardize their employment will only very rarely express their true feelings.

Simply put, employee engagement surveys are largely inaccurate in unsafe environments. Thus, any reasonable result on the survey may equally be a sign of systemic problems that the engagement instrument is not designed to detect.