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1 - People in Organizations: A Systems Approach

While there are some instances in which an organization is struggling due to the influence of external factors, it is far more common for organizations to struggle from internal conflicts. This is because the people who constitute an organization are working at odds with one another - either pursuing conflicting goals.

Communication is usually blamed, and it's believed that if everyone is in agreement about the mission, vision, and values of a firm that they will automatically fall into a collaborative mode, but this is not always so: people can employ conflicting means even when in agreement about the goals.

But even this is not the panacea for internal strife. Much depends on the structure of the organization, its unique culture, the idiosyncrasies of its employees, management styles, competencies, and other factors. So there is no simple solution to suit all cases.

This is the reason that managers must study theory, in order to understand some of the underpinnings of human behavior, and must consider them in defining the practices they will implement in their organizations.

Organizations as Systems

An organization is analogous to a system, with people as its atomic parts. The "people" include employees, management, owners, customers, clients, vendors, regulators and other entities. As managers we are most concerned with controlling the employees, but the entire system needs to be analyzed to ensure that this is in fact the right group of people to focus upon.

It is likewise worth considering that people themselves are seldom the source of the problem. Most people can be counted on to act in their own interests and their behavior is fairly predictable. The problem arises in relationships, where two (or more) people have conflicting interests and cannot resolve them. It may simply be a matter of ignorance, "the left hand doesn't know what the right hand is doing."

The organizational system is highly complexity with many interconnections and dependencies, where an action taken by one person will affect another without his being aware of it. The authors suggest that this complexity can be reduced to four factors:

  1. Staff - Including the people and their management
  2. Structure - The hierarchy of the organization and the methods of decision-making and process control
  3. Systems - Procedures that affect the availability of resources and the behavior of people
  4. Culture - The actions that, while not documented as requirements, are condoned or discouraged in a vague and implicit manner

There is also a matter of perception - to what degree the individuals in a system understand it and agree upon the factors above.

Employees as Stakeholders in the System

Employees are often mistaken for assets of a company - but it would be more accurate to consider them as stakeholders. Their continued service to the firm is contingent on the satisfaction of their interests.

It is also a mistake to assume that income is the only interest an employee seeks to serve by agreeing to work for a firm. In surveys of employees and candidates, money is not at the top of the list: people enjoy practicing their trade, interacting socially with coworkers, feel a sense of purpose in supporting the mission, and other factors.

Organizations and managers have a responsibility to ensure that these needs are fulfilled, as it is critical to retaining the employees that are needed as resources to accomplish the mission. This is especially important when a change takes place that impacts those factors - a reorganization or a merger is a dramatic example of a change that threatens their security, but more importantly threatens to change the things they value: the nature of their work, the coworkers with whom they interact, and the purpose their work serves.

Any change from the status quo is in effect a breach of the employment contract, even if it is unwritten and implicit. Employees are caused to re-evaluate whether the new situation will meet their needs as effectively as the old, and if they find it does not they will depart.

(EN: This has traditionally been of little interest to companies when there is a surplus in the labor market of the kind of worker the company needs. When they have the perception that lost employees are easily replaced, they show callus indifference to keeping their part of the bargain.)

Learning Organizations

Organizations need to change and adapt over time, but can only do so if the employees who compose the organization change and adapt. To rearrange the organization chart or rewire processes produces nothing unless the employees change as well. Moreover, change is easier in organizations who have a culture of flexibility, adaptation, and learning that is in place well before the change.

Communication is critical to making sure that everyone in an organization has a clear vision of whether the organization is going, such that they perceive change as an step in that direction. The less employees understand, the less supportive (and more resistant) they will be of change, and the less successful they will be in their roles when change takes place.

The managers who work directly with employees are in a position to help employees to make a transition, and to prepare them in advance for transitions that will need to be made, but will need the support and resources of their organization to do so successfully.

The Value of Engaged Employees

The author refers to a 1930s study of a General Electric plant that was baffled by a high level of productivity. What arose there was the conclusion that the happiness of the workers was causing the difference.

The authors regard this as a myth - but it would be more accurate to say that it is merely vague - as the cause of this happiness, hence the cause of production, was a culture that gave the employees the sense that their work was important and valued, and this precipitated greater engagement in not only their day-to-day tasks but in the long-term welfare of their firm.

Given that the firm operated multiple other plants with essentially similar conditions in other regards, this conclusion led to the notions of employee satisfaction and employee engagement. Where employees feel committed to work, they work harder and work better and are willing to give more of themselves to making the organization a success.

This is also known, and given a great deal of lip-service in management circles, but few firms can provide demonstrable proof of making anything but token efforts in pursuit of employee engagement.

Mission, Vision, and Strategy

Most organizations have perfunctory mission and vision statements that are boilerplate feel-good statements for the annual report rather than working documents that give purpose to their employees. Even when firms mean to use them well, the statements are so vague and elaborate as to be meaningless, such that employees pay them no heed.

A proper and functional statement clearly communicates the goals of the organization to stakeholders (employees and partners as well as investors) and inspires employees in particular to take meaningful action. Few companies approach them in this manner.

Each of these three items has a specific purpose:

The mission statement must be clear and succinct, rather than vague and aspirational. It indicates the service or product the company provides and the market they serve, and generally justifies the reason the firm exists in the present day. A mission statement does not disclose the desires of the company, but describes it as it presently is, and givens guidance for the actions to be taken today to maintain it such as it is.

The vision statement is futuristic, and as such is subject to aspiration and vagueness - but that is ideally kept to a minimum. It communicates in specific and memorable terms a vision of the future, and it need not be one that can actually be achieved. For example, one organization's vision was to "put a computer on every desk in America" - which was preposterous at one time, and is still not strictly true, but it is not so farfetched.

The strategy is the bridge between mission and vision, and tends to be less poetic and more practical - it indicates the actions that need to be taken to get from present state to future state, beginning with high level goals that will take many years to achieve (a computer on every desk) and drilling down into the details it will take to get there (design a model that is useful and affordable to the blue-collar household). It is likened to a roadmap that shows the destination, then the general direction from here to there, then the highways, then each turn and gas station along the way.

There's a brief mention of MVS statements for departments within an organization, which can be useful in translating the grand plans into something that people can act upon, but this can also lead to problems when a department's statement is at odds with the firm's, or when people are so focused on a low-level statement that they lose sight of the big picture and become pigeon-holed in their jobs.

A Framework for Influencing Human Behavior

Managers must balance the needs and interests of the organization against those of the employees, which is easier said than done. The authors provide a general approach that can be leveraged and adapted:

Step One: Gather Information

Critical to success is gathering information - you cannot serve the interests of employees and the organization if you do not know what those interests are, and there can be no standard checklist (though there may be some general truths). So you simply have to pay attention.

Learning about the organization and its culture are relatively easy because organizations present their demands to employees regularly and expect them to be known and served. (EN: What's tricky is that organizations communicate cultural traits they don't have, whether they aspire to them or feel it is good marketing to pretend to be better than they are.)

Learning about employees means paying close attention to the individuals who work for you, and learning more than the basic facts about their functional capabilities: What is their preferred working style? What are their aspirations? What unused talents do they have?

Interaction and observation are the best tools for doing this. Talk to your people and pay attention to what they say beyond the necessities of the work and the exigencies of the moment. Ask them questions and really listen.

Step Two: Get a Realistic Perspective

Managers are not immune to having personal biases and cognitive filters, but they should be conscious of them and the way in which they can bias perceptions and interpretations. Avoid going with your gut an check your facts.

It's also important not to rely on a single theoretical model or a single opinion, but to look at a problem from a number of angles and piece them together so that you have a broad context.

You also have to be realistic in your expectations. Particularly when dealing with human motivation, people are not like computers that respond immediately and predictably to commands. It will take time and repeated effort, and you may have to accept partial success.

You also have to be relisting in your self-perception. You are not infallible and do not have god-like powers. You may need to ask for help.

Step Three: Be Genuine and Sincere

Influencing other people can be awkward, and many people find it to be an artificial and mechanical process - which undermines the purpose of the exercise. People have a sense of when they are being manipulated and do not respond to it well because it shows disrespect.

You don't need to be an employee's best friend or counselor, but you do need to be genuine and sincere in your interest. Be open about the reasons you are seeking to work with them and the goals you hope to achieve for the organization by doing so, and that helping them is a means to an end.

Communication and interpersonal skills are critical: dealing with someone who is angry or upset is difficult, and people tend to avoid others who are abusive or negative on a regular basis. (EN: Psychological studies into this suggest that much of this behavior is about power-distance - to be sincere is to be vulnerable, so people balk at sincerity. So working on personal confidence is a prerequisite to the more tactical skills.)

Of particular importance is establishing mutual trust: the old-school manager stood on a podium, inaccessible to his subordinates, and gave orders without listening to feedback. To be successful in the present day means being accessible and listening as much, or more, than speaking.

The author provides some "useful" guidelines:

(EN: These are valuable, but a bulleted list such as this comes off as platitudes and aphorisms that are entirely useless in that they are not specific and actionable. "Of course, but how?" - and looking at the table of contents, I don't believe the authors will ever get around to providing the necessary detail to accomplish these things.)

Why Learn About Human Behavior?

People are the most important part of an organization's success. That statement is too often regarded as a trite platitude by managers, but if they should ignore it entirely they will be chagrinned by the results: the equipment, facilities, and capital resources of a corporation are all wasted without the people to put them to work. That is all the more true for knowledge workers.

More specifically, it is the actions that people take that cause organizations to succeed or fail - whether it's performing routine tasks or contributing the ideas that shape the future of a firm, all value derives from the employees' behavior. And it is for this reason that understanding human behavior is critical to successfully managing a business.

For simple work, like carrying things from one place to another or pressing the buttons on a factory line, it is sufficient to teach behavior and demand that the workers replicated it with precision and speed. Complex work, like developing strategy or designing products, cannot be modeled - you cannot show someone how to write a brilliant plan, because to do so would be to write the plan yourself.

As such, managing knowledge workers is not a matter of showing them what to do, but giving them motivation to do what they are capable of doing, in situations in which you are not capable of doing it yourself and know only what the outcome ought to be like. You have to understand psychology.

The human mind is a very complex machine and highly idiosyncratic. While it is possible to group people into categories and stereotypes, this must always be done with the acknowledgement that you are making generalizations that are so simplified that they are deleterious. There can be no simple formula for motivating human behavior. At best, we can understand the underlying theories that enable us to create a game plan for motivating a specific individual in a specific situation.

For example, we understand that different employees have different needs. At the lowest level, all human beings have a similar need for food, water, and shelter - but we do not address these basic needs as a matter of course. At the higher levels there is no clear answer as to what is needed to make a person "feel secure" or "experience a sense of personal growth." We cannot even accurately predict to which degree each is valued, and to provide an accurate answer as to how much security a person will sacrifice for the sake of personal growth. We cannot make broad statements about which employees value the social benefits versus the financial benefits of employment. And even if we could be positive about one person at one moment in time, they would change in the very next.

As such, mangers work in a theoretical realm where there are no perfect and permanent answers, but still need guidance to get it as close as possible to that ideal. And that is why understanding human behavior is critical.

The Difference Between Management and Leadership

The authors suggest that management and leadership are two different things, each of which are necessary to the organization's success. The terms are used interchangeably, and both duties have traditionally been assigned to one person, but they are essentially different.

Managers have a short-term focus on the work, setting objectives to realize the mission, and focus on operations. Leaders have a long-term focus on the organization, establishing direction in pursuit of the vision, and focus on inspiring and producing change.

(EN: this dovetails with the supervisor/manager/leader model, though it mashes the first two together in a way that will cause some ambiguities and conflicts when the authors discuss management.)

They march out the tired metaphor of a person wearing two "hats" and deciding which is needed at any given time. (EN: Which overlooks the potential to create an organization in which the roles are separated.)

The Role of a Manager

The authors offer a single paragraph of this that would better be expressed as a list:

The Role of a Leader

They speak at greater length about leaders, in contrast to managers.

And some contrasts:

Real-Life Leaders

The authors them trot out a few legendary leaders and attempt to give a sense of what they have done:

The list could go on, but the main point is to recognize that leaders are people who have a vision that breaks from tradition and inspires others to follow and support them in its realization.

Integrating Leadership Ability into Management

The authors consider leadership to be a task that should be intergraded into management (EN: which is conventional) by encouraging manners to look beyond the formal rules and procedures to have a better understanding on what their organization is seeking to accomplish and being more flexible in their approach to doing so.

It's long been known that a manager can't do everything, and assigns tasks to his teams - but in the traditional approach a manager still did all the thinking and assigned tasks to people, essentially using them like power tools to do his bidding. In the present world managers must delegate the mental tasks as well - to motivate people toward a goal but allow them to contribute their thinking.

The authors them become a bit whimsical, speaking of managers who use their head (knowledge) hands (behavior) heart (relationships) and spirit (vision). (EN: this gets a bit whacky so I'll leave it at that.)

They suggest in the chapter's closing that organizations need flexible managers who can perform multiple roles and work with different kinds of employees. Particularly to be nimble in a changing environment, management cannot continue to control organizations tightly and exercise top-down methods in which people are paralyzed unless told exactly what to do. And so, nuts-and-bolts knowledge is less useful than a flexible and adaptable theory of management.

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