7 - Organizations in Crisis
The author (melodramatically) proclaims that many large organizations are already in "a state of crisis," primarily arising from a lack of adaptation. The markets have changed dramatically, become more fast-moving and unpredictable, whereas many organizations attempt to maintain existing structures and procedures that were created in a time when things moved more slowly. Executives tend to be in a panic, and the employees are convenient scapegoats for their failure to adapt.
During the present economic crisis, employees are increasingly dissatisfied, but are riding it out for lack of better options. It's clear that the traditional path of devoting oneself to a single profession and even a single firm and waiting in line to be promoted is no longer the path to career success, though many workers cling to this outdated model as well.
Clutching at old straws
There's a brief description of the traditional, hierarchical organization, which hailed from a time when the pace of business was much slower. These organizations consolidated power at the top, and were designed to enforce compliance - specifically, the people at the bottom complying to the will of those at the top - as well as stability, with expectations that the daily business of a firm would remain largely the same for decades and generations. As such there was a great emphasis on informality, stability, and compliance.
Another antiquated notion is the need for a physical office and fixed working hours. For many positions, work can be done at any time and from any location. When the traditional organization was created, working from home (or from anywhere outside the physical office space) outside of a traditional 9-to-5 schedule was unheard of. Unfortunately, the reaction of management to these capabilities was that they wanted workers to work nights and weekends from their homes in addition to - rather than instead of - the traditional place and time.
Most of the metrics by which people are managed and assessed still hail from the traditional organization, and as such most of them are of limited relevance.
It's also mentioned that the "new way" of work is not completely understood. For instance, working remotely and connecting via digital means is far less understood than face-to-face communication and the "best practices" are not very well defined as yet. Likewise, communicating across cultures with teammates in different locations and time zones remains extremely clumsy and haphazard. Until this is sorted out, there will often be individuals who are alienated or excluded from participating with teams.
Bringing in the consultants
The practice of brining in external consultants has never been a positive experience for employees. There is the clear sense that the management does not value the workers' perspectives and would rather listen to an outsider. There is also the sense that the outsider doesn't understand the business, and will propose asinine ideas that will make the workers' daily lives more difficult. In essence, that they have no control and no input.
The author suggests that this is "rarely the intention of senior staff." They may be seeking to get a fresh perspective from an outsider who is objective, or they may seek to engage consultants because the effort would be burdensome to employees who must continue to handle their regular duties.
But the fact remains that outside consultants have a track record that shows a great deal more failure than success - whether their ideas are flawed due to ignorance of functional matters or indifference to the existing organizational cultures. The difficulties with "change management" are often remedied by solutions that are designed to compel the workers to swallow a bitter pill, rather than to develop strategy in a manner that would make it appealing in the first place.
There's also the notion that strategic change is no longer a valid pursuit. Instead, organizations should be flexible enough to adapt to the environment and situation, as the pace of change is simply too quick to spend months or years formulating and implementing massive programs.
The very notion of the hierarchical model has been challenged - though it has been successful for many years, it is based on keeping control at the top and preserving business as usual. To be nimble, power must be handed down, with decisions being made on the front lines in a tactical rather than strategic manner. But we remain "addicted" to hierarchies.
Fear Starts Near the Top
Generally speaking, culture starts at the top of an organization and trickles down through the ranks. A manager's behavior reflects the behavior of his own manager. And in an uncertain climate, with high unpredictability, many senior managers feel a great deal of fear - particularly, fear that they will not be able to maintain their positions if they fail to meet the expectations placed upon them.
This fear is passed along, in both the goals and methods used to manage their staff, and so on, until it reaches the lowest levels of the organization. A manager who micromanages is attempting to exert control because he is also driven by fear.
Lip-service is paid to the notion of "supporting and coaching" styles of leadership, but managers seem more comfortable with coercion. Coaching requires giving people latitude and permission to make mistakes - and where there are severe consequences for failure, then a manager feels the need to restrict rather than facilitate.
The author asserts that in some cases, changing the fear culture of an organization requires "no more than a change of chief executive" or in other cases, a senior executive who creates unnecessary fear and pressure on the organizational structures below him.
Charismatic Leadership
Reiteration: the reason so many firms are struggling today is because they are struggling to maintain structures and protocols from a period in history where the environment and market was stable and unchanging. It doesn't seem to occur to anyone that the way to survive a crisis is not to redouble efforts at the very practices that caused the crisis.
There seems to be a widespread consensus that contemporary organizations are in critical need of strong leaders with compelling visions. This often emphasizes the personality of the leader, and tends to encourage leaders toward being autocratic: the leader sees himself, and is expected to be, a superior being who convinces others to follow, regardless of whether they understand his goals or methods.
Such leaders routinely fail. Their plans and schemes are limited to their own knowledge, and they routinely ignore or dismiss the knowledge that others have to contribute, which means overlooking opportunities and ignoring warning signs. The emphasis of the command-and-control leader is in having control, not accomplishing the goal. His greatest fear is not failure, but loss of prestige and status among his subordinates.
The followers of such a leader are often frustrated and dehumanized - compelled to take actions with which they do not agree, ignored when they have information to share. And they become exactly the kind of person the leader wants them to be: automatons who blindly follow orders, even when they know them to be misguided.
Improvisation in leadership
Traditional leadership focused largely on planning and strategy, as technology and markets progressed very slowly (if at all). Present-day leadership, meanwhile, focuses on improvisation: there is still a general goal in mind, but plotting out a decade-long strategy is largely pointless because things will change so much that it will no longer be applicable.
The change, as well as the mismatch, is bad news for employees. There was a sense of security and constancy in having a job that doesn't change much, and knowing what will be coming months or years in advance. In an environment of constant change, there is little stability, and much fear that any change will be for the worse.
There's also the old-school notion of a leader who has a solid knowledge and applies a firm and steady hand. In the traditional approach to leadership, any leader who seemed uncertain of himself or confessed that he didn't know what the future would bring was weak, and his people would panic. In the modern environment, pretending to be certain is just as much a liability - a leader who makes positive and assertive declarations will be embarrassed repeatedly.
So in the modern world, "informed improvisation" is the best a leader can do - and this is difficult for those who expect and old-school leader, infallible and super human, to accept.
Mindful Work
Another marked difference between historical workplaces and the present day is the degree to which workers are expected to think. Traditional leadership was "one mind many hands" in that the leader did all the thinking and the followers simply performed tasks. Today, a manager very often manages knowledge workers who have subject-matter expertise in areas where his own knowledge is lacking. (EN: This was not unknown in the past. A hospital administrator, for example, was a person with a business degree who managed a group of people with medical knowledge he lacked.)
The problem is that thinking work has different requirements than task work. You can estimate the amount of time it takes to dig a ditch, but not the amount of time it takes to solve a problem. A person can perform tasks under close supervision and with periodic interruptions - but a person cannot think under those conditions: supervision is a distraction, and any interruption is destructive.
The task-worker also had far less authority over his own work, and so long as he performed actions at a reasonable pace, was immune to being criticized for the outcome. So in addition to being easier to control, the worker had a certain level of security in being safe from blame.
Laborers can be ordered to work faster, and can often do so (to the limit of their stamina) simply by moving faster. How does one think faster? Discover faster? The author draws a parallel between "fast thinking" and "fast food" - when time is restricted, the outcome is often quite disappointing.
Creative thinking is very poorly understood in general, and there are no proven methodologies for a manager to help workers to become better and faster thinkers. The matter is simply not well enough understood. (EN: See Czikszentmihalyi's recent work in creativity - which is still very general, but helps identify the creative process and the problems in compelling people to be more creative.)
Revolving Doors
Another problematic factor in the present day is that there are few places that offer employment "for life," or even for a very long period of time. It was once unusual for an employee to leave his firm - now it is unusual for an employee to stay more than a few years.
The same applies to management, which creates even greater uncertainty and instability. Even CEOs are temporary workers, who seek to make a name for themselves by making quick wins in a few years, which is bad for the long-term health of a firm. A study in 2013 indicated that the average tenure for Fortune 500 CEOs is only 4.6 years.
She presents some additional research that suggests that this correlates to performance improvements: a new CEO makes many changes quickly at first, but then settles into his role and begins defending past decisions. The author indicates "I am not sure that I buy this argument," though she can present only hypothetical counterpoints (which seem logically sound, but lack factual support).
Fallen from Grace
There's a brief bit on the loss of the dignity of leadership. Given that corporate scandals have become common (or at least they get a great deal more media attention than in the past), the esteem of leadership in general has suffered. To be an executive was once a mark of distinction - today, the job title arouses suspicions of professional corruption and personal perversion.
This has been further exacerbated by the recent financial meltdown, which has created an atmosphere of "greed and fear" in world financial markets, leaving employees and customers disillusioned.
Corporate psychopaths
The author means "corporate psychopaths" in the sense of destructive individuals - not merely those who are disengaged or cynical, but those who deliberately work to sabotage the functions and culture of the workplace - disregarding the common good for their own personal advantage (or simply for the sheer joy of being destructive).
This sounds quite extreme, but is a very real problem. It has been studied extensively in the context of prisons and schools, but the same dysfunctional behavioral patterns are evident in other organizations (such as companies).
And neither is it melodramatic to refer to such individuals as psychopathic: they have the same characteristics and behaviors (glibness, superficial charm, pathological lying, lack of remorse, lack of empathy, parasitism, impulsiveness, etc.) - so these are not individuals who act in a manner similar to psychopaths, but actual psychopaths in the ranks.
Statistically, individuals with psychopathic personality disorder are estimated to be 1% of the population, which means that they also represent 1% of employees and 1% of managers in organizations. It stands to reason that since these individuals have a craving for status and control, they may be even more concentrated in the ranks of management. One source (Babiak and Hare, 2007) suggests that psychopaths may constitute "somewhere between 3% and 25% of executives." Other studies of business school students (Gudmundsson and Southey 2013) express psychopathic attitudes at a significantly higher rate than the general population.
Because they are skilled at deception, they may be able to create the illusion of being successful leaders, as they deceive some into believing they are effective and are able to place the blame for failure on others. The true nature of their condition may be camouflaged for years - and changing jobs constantly can ensure that they are never in one place long enough for others to sniff them out.
In the corporate environment, psychopaths can wreak a great deal of havoc. They are concerned with having power, not getting results, and creating the illusion of achievement instead of actually doing anything that has a positive effect. They are not concerned for the long-term welfare of the organization, and feel no regret for the harm they do to others. The archetype of the "hard-nosed businessman" who eschews compassion to achieve profit has a great deal in common with the profile of the psychopath.
Even organizations who are similarly inclined, to put profits before people, should be interested in detecting psychopath because the harm these individuals do is not just to the morale of employees, but to the success of the firm. Fraud and corporate misconduct can be devastating to corporations, drawing regulatory actions as well as damaging the public image of the brand.
The paradox of recruiting leaders
Leadership recruitment is poorly done in general. The traditional path "from the mail room to the board room" fails to account for the different skills needed to do different jobs. Even in the present day, management candidates are often selected from the ranks of a workers - a person with excellent technical skills who is competent at his work may not be cut out for management at all.
There is also the issue of office politics - people with no skill at anything, who know how to impress, charm, and ingratiate themselves to others will rise through the ranks quickly. Such people generally make very poor leaders. But such people are often selected for leadership positions in organizations that do not have a clear sense of what leaders do, nor what skills are needed to do it.
For any other type of work, recruitment seeks candidates who show skills and capabilities that are applicable to the work, and it is recognized that being great at accounting doesn't mean a person will be any good at marketing. The author gripes a bit about the fact that selecting the most influential employees who have the greatest potential to impact the organization should be done with as much consideration.
There is an oblique reference to informal leadership - the employees who are not acknowledged as leaders, but who often run teams without being named or acknowledged. Such employees help their groups succeed in spite of weak leadership.