I just found out that my book, The 36-Hour Course in Organizational Development, is listed on Amazon as a bestseller in organizational behavior and is currently in the top 1% of books sold at Amazon.
For a business book to be selling this well a year after publication is extremely unusual. I have to admit to being a bit stunned.
Please pass this along… who knows, maybe the NY Times bestseller list is next 🙂
Here’s the blurb from my appearance on the Full Potential Show. For the actual show, click here.
Can sports be used for more than just fun and pleasure? You bet! The same disciplines or character development, leadership and team based skills applies to almost every other domain in life.
Steve Balzac is a man of many talents. He is a consultant, speaker, and author of 36-Hour Course in Organizational Development. He is a popular speaker on such topics as leadership, team building, interviewing skills, and sports performance. In this interview, he shares the lessons he has learned from the sports he excels in – Jiu Jitsu and fencing – and how they tie-in with the honing of leadership and organizational development potential.
THE TIE IN
a)   Use the other person’s force against him (as in Jiu Jitsu)
b)Â Â Â Meet and go with the force of the other person in order to take him to where you want him to go
c)Â Â Â In a difficult situation, attract the other person to where you want to take him
d)   Don’t be afraid to try different techniques, even if you have to look like an idiot sometimes
e)Â Â Â Explore and practice the fundamentals well (as in fencing)
f)Â Â Â Build yourself to a point where you can stay focused for long periods of time
g)   When you’re up there, you should not care whether you win or lose. If you focus on the outcome, you doubt yourself and hesitate
h)Â Â Â After preparing your team, give them permission to go off and achieve what they need to
i)Â Â Â Look at mistakes as the cornerstone of innovation and as a part of the process of evolution
j)Â Â Â Determine if mistakes repeatedly committed is due to a flaw in the system
k)   Don’t do all your research ahead of time – it’s impossible to know everything ahead of time
l)   Develop a culture where it’s acceptable of everybody to commit mistakes, including you
m)   Consult with your followers to show them you’re interested in listening to their ideas
FINAL POINTERS ON LEADERSHIP AND ORGANIZATIONAL DEVELOPMENT:
1)   Tell your own story – what you’re trying to do and why you care about it
2)Â Â Â While you should have an outcome, dwelling on it during show time can actually hinder performance
3)   Walk your way backwards through the steps from the outcome – this will make the first step very easy
4)   Don’t be afraid to ask someone to show you the way (no team makes it to the Olympics without a coach). This will shorten your learning curve.
FINAL THOUGHTS
• “Experiment” is synonymous with mistakes and breakthroughs.
As published in the CEO Refresher
One fine day, Arthur, the CEO rode forth upon his trusty steed. At his side hung his magic sword, Expostfacto. Expostfacto was widely considered to be a sword with a sharp legal mind. Arthur had made his fortune renting camels, which he parked every day in a large camel lot.
The sun was shining. The birds were singing. Suddenly, a dragon came roaring out of the sky, heading straight for Arthur. Flame billowed from the dragon’s mouth. Arthur drew his sword and with one swift blow, buried the dragon in a shower of subpoenas.
So it went, as Arthur spent many days enjoying the freedom of facing foes instead of sitting in stultifying board meetings, where, regretfully, it was seen as déclassé to employ the full might of Expostfacto upon annoying board members or customers. Against the power of Expostfacto, each foe swiftly fell under a massive pile of paperwork.
So it went until the day that Arthur encountered Maldive, the Green Knight.
“None shall pass!” quoth Maldive.
Many blows were exchanged, with Expostfacto screaming its legendary battle cry, “Lorem ipsum dolor sit amet,” a phrase which has become familiar to all internet users. Eventually, though, with a mighty blow, Arthur struck Maldive’s head from his shoulders. That should have ended the fight right then and there, but Maldive was an internet marketing scheme. He simply put his head back on and continued the fight. Eventually, Maldive knocked Expostfacto to one side, and placed the point of his sword at Arthur’s throat.
“I could slay you now,” said he. “But on your honor, I will spare you if you can answer this question: What does every engineer desire? Swear on Expostfacto that you will return in a month. If you have the answer, you will live. If not, you die.”
Ignoring Expostfacto’s muttered comments on possible loopholes and the inadvisability of signing anything, Arthur took the oath to return in a month with the answer or without it.
Arthur rode across the land searching for an answer to the question. He called together all his senior managers and asked them, to no avail. He even posted the question on Twitter and Facebook, leading to some very interesting answers and suggestions, particularly from certain ex-politicians in New York and California. However, since Maldive had asked about engineers, Arthur knew those answers couldn’t be true because an engineer wouldn’t know what to do with one even if he found someone willing to go on a date.
By day 29, things were looking quite bleak for Arthur. As he rode through the frozen lands of Nadir, he encountered a strange looking man. The strange thing was that the man did not appear to be in a rush. As a CEO, Arthur was quite used to people rushing around following his orders. He could always tell when things were getting done by how much people were rushing.
“Who are you?” asked Arthur, puzzled at the sight of someone so calm and relaxed.
“Merlin,” was the reply.
“Merlin the Magician?” asked Arthur.
“No, Merlin the consultant. What seems to be a problem?”
“Nothing, nothing at all,” said Arthur who, like most CEOs, became very cautious at the sight of a consultant.
“Good,” said Merlin, who turned back to whatever he was doing, completely ignoring Arthur. This was a very unusual experience for Arthur, who was not used to being ignored by anyone.
After several minutes, Arthur said, “Well, I guess I’ll be on my way.”
There was no response.
“I’m going now,” said Arthur.
There was no response.
Arthur started to ride away. There was still no response from Merlin, who seemed quite happy to let Arthur leave. Arthur had not ridden very far before he stopped and turned back.
“Do you know what every engineer wants?” asked Arthur.
“Why do you ask?” replied Merlin.
Before long, Arthur was telling Merlin exactly why he wanted to know and what would happen if he didn’t find out. I wasn’t long before a price was agreed upon and Arthur had his answer.
“That’s it?” exclaimed Arthur. Reflecting on it further, he said to himself thoughtfully, “But that’s what everyone wants!”
The next day Arthur showed up at the appointed time for his meeting with Maldive.
“Well?” said Maldive.
“Is it money?” said Arthur.
“No.”
“Is it a fast car?”
“No.”
“Sex?”
“We’re talking about engineers,” responded Maldive. “If that’s the best you can do, then prepare to die.”
“Wait,” said Arthur. “What engineers want is the freedom to make their own decisions.”
There was a long silence.
“I see you encountered Merlin,” growled Maldive. “Very well. But I doubt you will learn from this experience!”
And so Maldive turned and rode away.
Arthur, meanwhile, departed for home in a very thoughtful mood. What, indeed, did it really mean that people want to make their own decisions? Obviously, if he allowed all his employees to make their own decisions, surely chaos would result. No one would know what anyone else was doing! There would be no coordination between departments.
The moment Arthur returned to his office, he discovered the true meaning of chaos. Thousands of emails needing his attention; projects stalled because he hadn’t been around to tell people what to do; irate customers complaining about badly maintained camels (even camel renters have some expectations!); employees angry and frustrated because they couldn’t get anything done in his absence.
“I knew I should never have taken a vacation,” Arthur thought ruefully to himself. “This happens every time! It’s even worse than when I’m in a meeting or on a call.”
As Arthur dove into sorting out the confusion that came about from his taking his guiding hands off the corporate reins, he kept wondering how much worse it could really be if he allowed his employees to make their own decisions. Would it really be worse than what he dealt with every day? Arthur decided to experiment: instead of solving the problems in one department, he gave them limited decision making power. They could approve all expenditures, including customer returns or gifts, up to a fixed amount. After a couple of false starts as everyone got used to the new arrangements, Arthur found that that department was suddenly taking up much less of his time and energy. Moreover, the increased productivity of his employees more than made up for the occasional decisions that Arthur might have made differently. Indeed, simply by building some structure, Arthur found he could permit much more freedom and limit the downside of the occasional mistake, and create almost unlimited upside. At the same time, he also found that he could now focus much more on the strategic direction of his company instead of spending all his time putting out fires.
Best of all, as Arthur spread these changes throughout his company, he found that work didn’t come to a halt whenever he wasn’t available. Productivity increased because employees no longer needed to look busy in order to appear to have a purpose; instead, they could actually engage in purposeful activity. Sure, there were still moments of frustration, but on the whole, employees were happier and more motivated than he had ever seen them. Motion does not equal progress, Arthur realized. Progress equals progress.
In the end, the ability to give people the freedom to work as they would like to work comes from building the structure to enable them to know what to do. Without structure, there may a lot of motion, but very little progress. What will you do to change that?
Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead, an organizational development firm focused on helping businesses get unstuck. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill, and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” For more information, or to sign up for Steve’s monthly newsletter, visit www.7stepsahead.com. You can also contact Steve at 978-298-5189 or steve@7stepsahead.com.
I get asked a lot about corporate culture. In this case, I ended up responding to a very detailed query at such length that I decided to include it here since I doubt the person interviewing me will be able to use all of what I wrote (I’m also posting this after the article comes out, so I don’t upstage anyone).
Let’s start by defining culture. At root, culture is nothing more than the residue of perceived success. In other words, it is the accumulated knowledge of how to be successful at a particular company and how the company is successful in the marketplace.
Why success and not failure? Simple. We tend to repeat the behaviors that appear to bring us success, and discontinue those that do not. Moreover, cultures based on failure simply do not survive. At some point, there have to be successes in order for the culture to remain viable.
I focus on perceived success because what really matters is not whether a behavior is really successful so much as our belief that it is successful. For example, in the 1990s, Nokia firmly believed that its success was due to its innovative management style. The reality was that they had a hot product, cell phones, in an exploding market. When the market saturated, their revenues dropped off along with every other cell phone provider in 2000. Today, Nokia is increasingly irrelevant. If everyone at the company had come to work wearing Groucho Glasses every day, their product would still have sold and they might very well have ascribed their success to their innovative dress code. The results would have been pretty much the same, although people might have been inspired to tell better jokes.
Because culture contains within it the memory of success, it is very hard to change. No one likes to change what’s working! What’s worse is that a behavior rarely succeeds all the time: when something doesn’t work, we ascribe the failure to “not trying hard enough” and resolve to do better. The resulting semi-randomness to the success produces a response similar to playing a slot machine: random success is highly addicting.
This phenomenon becomes particularly important when we realize that the business environment changes more rapidly than the culture. A once successful behavior gradually stops working. However, because it fades out slowly, intermittent successes along the way serve to make the behavior stronger and stronger even as its usefulness is decreasing. When it comes to not changing a behavior, it takes only the occasional success to make up for an awful lot of getting kicked upside the head.
This also means that there are two key aspects to culture: what we do and why we do it. Most organizations focus purely on the “what” and ignore the “why.” Even when an organization attempts to change culture, they almost always focus on what they are doing. Unfortunately, when you only change the what, you are changing the superficial. The underlying why will rapidly pull the new behavior back into alignment with the original behavior; although cosmetic changes may persist, the new “what” will be fundamentally identical to the old.
The “whys” of culture also interlock: there is rarely one reason for a particular behavior. As a result, attempting to change one “why” can also be quite difficult because a) it’s hard to identify it precisely, and b) the rest of the interlocking structure of beliefs pulls it back. It is quite possible for a CEO or senior management team to simply chop off a piece of a corporate culture, but it can be quite unpredictable what else they’ll lose: for example, when IBM dropped its traditional full-employment policy, they also lost a great deal of employee loyalty and their historic “IBM takes care of me and my family, I take care of IBM” employee mindset.
With that said, let me jump over to your questions:
1. How do you know when there's something wrong with your corporate culture (what are 2-3 signs), or how do you know if things need improving just a bit?
Something is “wrong” with a corporate culture when the culture can no longer obtain resources, that is to say clients and revenue, from its environment. The early symptoms can manifest in several ways before the revenue drop really hits. The most common is a persistent feeling of being stuck: more and more effort is expended for less and less success. Previously successful revenue generating behaviors are losing their effectiveness, but doing so in fits and starts.
Another common symptom is increasing defensiveness on the part of management: executives don’t want to hear why something isn’t working, and attempts to address problems are met with denial. At exactly the point where the executive team should be bringing in outside help, they become increasingly unwilling to do so. An outsider is far too likely to grind the sacred cows into hamburger. IBM’s decision to bring in Lou Gerstner in 1992 is an example of a company overcoming that fear of outsiders and actually addressing their problems.
A third symptom of culture problems is a persistent inability to make and keep decisions. When teams within the company, or the company as whole, continually revisits discussions and can’t seem to follow-through on goals, that’s a major warning sign that you need to take action.
2. Where do generational differences among staff and colleagues come into play?
Let’s start with the elephant in the living room: the Gen Y myth. This whole concept that Gen Y’ers are somehow less dedicated, less motivated, or less <insert here> than Gen X or Boomers is, quite simply, a myth. Indeed, the whole idea that the younger generation is less respectful, dedicated, hard-working, and so forth, than their elders is itself a cultural belief that goes back at least to Socrates.
What is different, however, is that Gen Y’s do not share the cultural belief that you graduate from college, work at one job for 40 years, and retire to enjoy your “golden years.” While this was, or at least appeared to be, a valid cultural belief at one time, it is no longer valid in the current environment and shows no signs of regaining validity. However, for those who grew up with it, it is very difficult to put it aside.
Within an organization, what matters first is not the generational differences but the degree of immersion in the culture of the organization. Younger employees are less deeply immersed in the culture; they’ve had less time to absorb it and to assume its values. Thus, they are more likely to propose ideas and approaches that older employees view as violating cultural values and hence are more likely to reject. Note, by the way, that I’m referring less to chronological age than to amount of time with the company. Since the older employees typically have more authority, younger employees are more likely to be frustrated. How they cope with that will, however, be strongly influenced by their generational cultural values: a Boomer or X’er might decide that if they stick around and pay their dues, they’ll get a voice in due time; a Gen Y’er is probably more likely to go somewhere else. One solution is not inherently better than another.
3. How do you cultivate a creative and collaborative team (what 2-3 three things can really build that team culture)?
Culture is whatever is seen as successful. If you want people to collaborate, reward collaboration. Sounds simple, but it just doesn’t happen. Companies focus on individual performance and individual reward. As a result, they get a bunch of individuals often competing for a limited pie. While it is important to acknowledge and reward individual contributions, that cannot be all that you reward and it should never be set up in a way that creates competition between team members.
4. It's all about innovation, how best to encourage creative brainstorming for service/product innovation (what works and what doesn't and why)?
There are four culture traps to avoid and four cultural beliefs to build. The four traps are:
Perfection — We must make the perfect mousetrap… which works until someone comes along with a cat.
Protection — We must not hurt our existing products. Pity our competitors don’t feel that way…
Identity — We’re an X not a Y. IBM was a serious business company in the 1980s. They didn’t “do games.” Now they’re heavily involved in serious gaming.
Creeping Box — We’re so far outside the box no one can catch us. Just ask Yahoo… Once you move outside the box, the box grows and suddenly you’re just one of the pack.
The cultural values to foster
Continuous education — Keep people learning. Don’t limit people to taking classes in their areas of expertise; rather encourage employees to study whatever interests them. Innovation comes from putting together apparently disparate pieces of information.
Making mistakes — How do you respond to mistakes? Innovation is a messy business. If mistakes are punished, no one will risk making them and innovation will falter. Thomas Edison famously said that he’d learned a thousand ways to not make a light bulb. Easy to say, hard to live.
Strategic breaks — Allow the breakthrough to happen. The “eureka” moment doesn’t happen when we’re exhausted from banging our head against the wall. It comes when we take a break and do something different. Learn how to take breaks strategically.
Patience — Don’t wait for a crisis to force your hand. Necessity may be the mother of invention, but waiting for the last minute to start innovating is the number one cause of premature death amongst new ideas.
5. How do intangibles like volunteerism, office greening, impact corporate culture?
Intangibles matter to the extent that they reflect the corporation’s values, beliefs, and aspirations. Volunteerism can be very important in a company that views itself as a good citizen of the community. However, to be effective, intangibles have to be worth the time and energy expended on them. If employees who volunteer their time end up being paid less or promoted less frequently than those who don’t volunteer their time, volunteerism will fade out. The behavior that is rewarded will become part of the culture, and the culture will attract those who believe in the values manifested through the behavior.
6. What are other intangibles that are important but corporations may not be keen about their importance?
How meetings are conducted, whether employees are permitted to work from home, how much freedom and autonomy versus direction employees are given, how mistakes are handled, how disagreements are managed, how permissible it is to question authority, are just a few of the intangibles that shape cultures.
7. How important is culture today and why?
Organizational culture is probably the most important most powerful force in any corporation. Because culture is the lessons of the past, it provides the template for how to behave in the future. Once a corporation loses sight of its culture, it’s only a matter of time before it slams into a brick wall.
8. Is your sense that most firms are focused on their culture, why or why not?
While many firms focus on their culture, they focus on the wrong aspects of it. Most companies focus purely on the “what,” those superficial artifacts that are easy to see but which have the least significance. It’s hard to focus on the “why.” Indeed, really delving into the “why” of your culture is rather like performing open heart surgery on yourself. In other words, you need the assistance of a trained outsider who is not immersed in your culture to see the elements you take for granted.
9. Any interesting, stats, surveys or other data about corporate culture?
Let me point you my book, “The 36-Hour Course in Organizational Development.” Chapter one is about culture and the entire book discusses how organizational development shapes and is shaped by culture.
10. If a company can make only one change in it's culture, how to determine what should be that priority?
The biggest priority is changing the belief that you can change only one thing… Seriously, culture change is not a precise, surgical operation. Sure, if you’re only after changing the “what,” you can pick one thing, but for anything non-trivial you have to go after the “why.” That requires taking the time to really understand what values and assumptions that are taken for granted are no longer valid, and then building up a new set of values and assumptions. Most culture change fails because it tries to focus too narrowly on one thing. Corporations go through a lot of pain and spend a lot of money only to experience a fleeting success before the culture reverts back to the way it was: when you seek to change only one thing, everything connected to that one thing acts to pull it back to its original form.
As published in the Worcester Business Journal
My 6-year-old son is seriously into Star Wars. As we were watching the movies recently, he turned to me and asked, “Why is Darth Vader such a mean leader?”
Coming from a kid who thinks the Sith are kind of cool, the question took me by surprise. On the other hand, it’s rather heartening to see that even a small child can recognize bad management. Of course, the real question is not what makes Darth Vader such a bad leader. After all, when you’re the Dark Lord of the Sith, you don’t really need a reason. More aptly, the question is: What does it take to be a good leader?
First, we have to dispense with the primary weapon of the Sith: fear. Darth Vader rules through terror, but the fact is, you don’t need to have the power to choke people to death using the Force to create a climate of fear. Fear is very effective at getting people to move away from something. In the practice of Jujitsu, fear of injury is often quite sufficient to convince an attacker to dive headfirst into the ground or into the nearest wall. Some mistakes are a natural part of doing business. When people are shamed for making mistakes or threatened with loss of their jobs if they don’t measure up, they become less creative, less dedicated and errors are not corrected.
To be a positive leader, the first step you need to take is to focus on affiliation. You might also think of it as team spirit. When people come together to form a team, the first thing they do is look for common ground. To really create affiliation, the leader needs to actively get to know his team members and encourage them to get to know one another.
Next is building autonomy. Perhaps counter-intuitively, autonomy is the result of having structure. Structure lets each team member know what the others are doing well enough to trust them when they aren’t visible. That trust is what permits autonomy.
Lack of structure is chaos. Too much structure is stifling. For example, when an employee comes up with a good idea and your response is to ignore them, that is too little structure. When you say, “Good idea! Here’s how we can make it better!” that’s too much structure. Appropriate structure is to say, “Great idea! How did you come up with it?”
Competence is not just hiring competent people. It’s creating an atmosphere of competence. Nothing succeeds like the expectation of success.
Managers can motivate employees in one of two ways: you can focus on failures, and make dire predictions about what will happen if employees screw up; or you can focus on success, and remind the employee of the things they did well.
The keys to great leadership are: get away from fear, build affiliation, create structure to enable autonomy, and craft an atmosphere of competence.
The hard part is finding the right balance for your team and your company. Start slowly and let yourself accelerate as you learn to use these techniques effectively. You’ll soon be amazed at how fast you’re going.
As published in The Imaging Executive
Once upon a time, there was a light bulb. This light bulb was quite a remarkable light bulb: it was praised far and wide for its incredible efficiency. This light bulb gave off no waste heat. This light bulb did not contribute to global warming. It had no carbon footprint. It did not rely on fossil fuels. Truly, it was an amazing light bulb and visitors came every day to see this remarkable light bulb.
One day, though, a traveler coming to see the light bulb in action was delayed by an unfortunate flood that closed several roads. He did not arrive until well after night had fallen. Much to his surprise, he found the light bulb sitting in a pitch dark room.
“Why aren’t you giving light?” asked the traveler.
“Give light!” replied the light bulb in shocked tones. “You must be joking. If I did that, I would use fossil fuels. I would have a carbon footprint. I would give off waste heat. I would no longer be efficient.”
“But isn’t the purpose of a light bulb to give light?” asked the traveler.
“I’ve always been told to be efficient,” replied the light bulb with a shrug. If you have never seen a light bulb shrug, it is truly a wonder to behold. The traveler would have been amazed, except, of course, that the room was too dark for him to see the miraculous event.
Once upon a time, there was a software company named “Soak, Inc.” Soak’s product relied upon a very complex database server. One day, the VP of Engineering stormed into the office and declared, “The server is too slow. We need to speed it up.”
From that day forth, every effort was focused on improving the speed of the server. Other issues were deemed insignificant beside the one, critical, goal of performance. Engineers who dared to raise other issues were publically humiliated for wasting the company’s time. Bugs that did not relate to performance issues were deemed “optional.” People who spent time reviewing the optional bugs and trying to fix them were warned that their insubordination would cost them their jobs if it did not cease immediately.
Eventually, Soak developed an amazingly efficient server. It was fast. It was robust. It was ready to demonstrate to potential clients.
The demo started out remarkably well. The server did not crash, causing some to believe that this couldn’t actually be a demonstration of a software product. Indeed, the server performed flawlessly. All would have gone well indeed for Soak had not someone noticed that the data being delivered by the server didn’t make sense. Yes, what the server had gained in performance it had lost in accuracy. In other words, it was incredibly good at very rapidly delivering useless or incorrect information.
When the engineers were questioned about this unfortunate oversight, they shrugged and replied, “We were told to be efficient.”
While it is not nearly as amazing to see an engineer shrug as it is to see a light bulb shrug, the effects are much the same.
Once upon a time, there was a large company called “Red.” Red Inc. had a team of salesmen who were, it seems, not producing the necessary volume of sales.  While this may have gone a long way toward explaining the name of the company, it was not exactly a viable long-term strategy.
One day, the VP of Sales decided that the problem was clearly that the salesmen were not calling enough potential clients. They were wasting their time. They needed to be more efficient with their calls.
Much effort was spent focusing on the calling habits of the salesmen. They were given scripts. They were forced to practice making calls with various managers listening in and rating them on their performance on these practice calls. Those salesmen who demonstrated too great, or at least too obvious, a reluctance to make calls were dismissed. Those who questioned whether this was the right way to approach the problem either learned quickly to shut up or were also dismissed.
The sales team became very efficient at making calls. Sales did not increase. The remaining salesmen shrugged.
It turns out that even the best salesmen are reluctant to make calls. The problem was not with making the calls. The problem was with projecting the necessary confidence and optimism to attract and hold the interest of the client. Clients, it seems, are not all that likely to buy from salesmen who do not appear enthusiastic and confident in what they are selling. It also helps to know how to close the deal.
In each of these situations, a goal was set, a metric for success was defined, and that metric became the sole determinant of progress. Goals are extremely powerful tools: the best thing about them is that you accomplish them. Unfortunately, sometimes the worst thing about goals is that you accomplish them. In each of these examples, they accomplished their goals. A dead light bulb is extremely efficient, but not useful. Similar observations can be made about the server and the sales team.
Before leaping into setting a goal, especially a goal to solve a problem, it helps to understand the actual problem and to understand what the actual symptoms are. At Red, they assumed that an unwillingness or inability to make calls was the cause of the low sales and set their goals accordingly. We’ll never know how many top salesmen they dismissed because they didn’t realize that even the best salesmen suffer from call reluctance. Rather than create useful goals, they fixated on a symptom. That did not, however, actually change anything.
At both Soak and Red, the respective VPs stated that they were trying to solve the problems their companies were facing as rapidly and effectively as possible. They were setting goals. They were Taking Action! Taking action is certainly helpful, but it is even more helpful to be taking the correct action. Since it’s not always possible to determine just what the correct action is, it becomes even more critical to listen to the feedback and questions from the people who are charged with actually executing the action. The engineers and the salesmen knew that something was wrong, but no one was willing to listen to them. Remember, a key aspect of successful goal setting is understanding the feedback you’re getting.
I realize that many of you reading this are probably chuckling to yourselves and thinking that this scenario could never happen at your companies. The folks at Soak and Red said the same before, during, and even after it happened to them. The light bulb had no comment.
Setting a goal, for example, to be more efficient , seems like it makes sense and certainly feels good. However, it pays to determine if that goal is actually going to get you what you want. Otherwise, you may just end up with a dead light bulb.
As published in Corp! Magazine
A good many years ago, I was working at a small software company. For various personal reasons, the VP of Engineering abruptly left the company and one of the senior engineers was promptly promoted to take this place. Now, this guy was an excellent engineer and I learned a great deal from him. He was a fun person to work with and someone who was always enthusiastic. He was picked for the job exactly because of those qualities and because of his engineering prowess. However, as a manager of engineering, he never appeared to have the same joy and excitement about his job. Indeed, he often gave the impression that he’d rather be writing code than managing other people who were writing the code. After the company folded, as far as I know, he went back to engineering.
At another company, Jim was a star researcher. He was brilliant. He was the person who came up with idea after idea. He did so well that eventually he was put in charge of the lab. At that point, things went downhill. Working through other people drove Jim up the wall. He wanted to be in the lab, not arguing about the best way to do things. He couldn’t go back, though, without being viewed as a failure. At the same time, he couldn’t get promoted until he “shaped up” and “made his lab more productive.” He was trapped doing a job he didn’t particularly enjoy and wasn’t particularly good at.
Both of these stories are examples of a hypothesis first proposed in the 1960s by psychologist Lawrence J. Peter. Today, the “Peter Principle” is spoken about with a certain amusement and a smug “yeah right” attitude. Unfortunately, “yeah right” is the only construction in the English language in which a double positive makes a negative. In other words, the Peter Principle is popularly seen as a joke. In fact, it’s not. Moreover, it turns out that when you have an environment in which someone can be promoted into a job that is significantly different from what they’ve been doing, the Peter Principle is virtually inevitable. The key point lies in recognizing what constitutes “significantly different.”
Well, as it happens, managing engineers is significantly different from being an excellent engineer. Managing researchers is significantly different from being a top researcher. Managing salesmen is significantly different from being a top salesman. However, being a top engineer, researcher, salesman, or whatever is exactly what brings that person to the attention of senior management. If this isn’t disturbing enough, in the study confirming this phenomenon, authors Pluchino, Rapisarda, and Garofalo also found that the best way to avoid it was to either promote people randomly or promote the best and the worst performers equally.
As Monty Python might say, “This is getting silly!” After all, how can it possibly be true that random promotion would work better than promoting the best performers into management?
Consider how much time, effort, and training is required to become a top engineer, researcher, salesman, doctor, or just about anything else. Nothing in the training these people receive prepares them to manage others. In fact, good management is, in many ways, the antithesis of being a successful solo performer: instead of doing the work yourself, you are now doing it through others. Motivating others is a different experience than motivating yourself. Helping others stay focused and on track is different from keeping yourself focused and on track.
So, without resorting to promoting people randomly, what could be done to prevent the Peter Principle from taking over in your company?
Well, if it were possible for someone to both be a manager and not be a manager at the same time, you would be able to see if they could do the job, and allow them to continue along the track they’re on if they don’t shape up. Unfortunately, literally attempting this is pretty hard on the person and the business; someone who tries to be both a manager and an individual contributor at the same time usually ends up doing one, or usually both, badly.
An alternative, though, is to take a page from sports and provide practice space for people. Just as a sports team might rotate players through different roles before figuring out what each one is best at, companies can use predictive scenario leadership games and exercises not just to train existing leaders, but to find leaders. Quite simply, when people don’t know what to do, they do what they are most comfortable doing. In predictive scenarios, people have the opportunity to demonstrate talents that might not be obvious or which may never come up in their regular jobs. For example, the best managers create order in chaotic or ambiguous situations and know how to build employees’ confidence. When you enable an entire department to participate in a predictive scenario, you can see who is actually doing those things. Rather than promote randomly, you can pick the people who most strongly demonstrate the desired skill set for the position you are looking to fill!
Is this easy? Not necessarily. It takes some serious effort to avoid the Peter Principle. I suspect that many of you reading this are thinking that you simply can’t afford do anything about it. The real question is, can you afford not to?
Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead (www.7stepsahead.com), an organizational development firm focused on helping businesses get unstuck. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill, and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” Contact him at steve@7stepsahead.com.
Very cool… my book, “The 36-Hour Course in Organizational Development,” was just put on the recommended list at the CEO Refresher, which also named me one of their Insight/Thought Leaders.
As published in Corp! Magazine
Very few companies are ever driven out of business by their competitors.
I’ve found that this statement upsets a great many people, all of whom are quick to jump up and start providing examples of companies that were, in fact, driven out of business by their competitors. This is missing the point. Indeed, it’s rather like a detective in a murder mystery concluding that the cause of death was that the victim’s heart stopped. It matters whether the heart stopped due to lead poisoning, for example in the form of a bullet, or due to some other cause. Indeed, understanding exactly what led to that heart stopping moment is a key part of solving the mystery.
Similarly, while it’s not so unusual for a failing company to have the coup de grace administered by a competitor, how they got to that point makes all the difference. Focusing only on the end point provides a very simple, comfortable solution, but not necessarily a particularly useful one.
Robotic Chromosomes, for example, was a company that dominated a particular niche in the bioinformatics market. They were an early entrant into the field and their products were initially the best on the market.
Over the course of several years, though, they developed a view of their clients as idiots. The fact that their clients were all highly educated research scientists did not enter into the equation. If they had trouble using the software, they were idiots. As a result, the company became increasingly less open to feedback from either clients or the market. While their market share was increasing faster than the market itself, they could get away with that attitude. Eventually, though, their growth started lagging the growth in the market. Phrases like “law of large numbers” and “temporary aberration” were batted about. When their market share started shrinking, phrases like, “temporary aberration” became even more popular. The view of the clients as insanely stupid for buying competing products became more common.
Today, they no longer exist. Were they driven out of business by their competitors? Only in the sense that they put themselves in a position to allow their competitors to drive them out of their dominant position in the market. Sure, their competitors may have pushed them over the cliff, but they were the ones who chose to walk to the edge and lean over.
Now, it may reasonably appear from the preceding description that Robotic Chromosomes was taken down by a clearly defined event, that is, viewing clients as idiots. That is not, however, quite correct. While it may appear that way in retrospect, the reality is that Robotic Chromosomes suffered from a series of cascading errors. Each mistake was small, easily overlooked or ignored. Each mistake led to more mistakes until eventually the company was suffering from so many small cuts that it eventually had no strength left to resist when its competitors moved in. So how does a company avoid this death of a thousand knives?
The obvious answer is that they needed better communications. While true, it again misses the point. Communications is where problems show up, but the communications are rarely the problem. Rather, the dysfunctional communications are the symptom of the problem. It’s critical to look beyond the symptoms to identify the real problem. Otherwise, you spend all your time looking at the wrong things, as Robotic Chromosomes so eloquently demonstrated.
Avoiding that fate requires a willingness to accept negative feedback; it means being willing to hear what people are saying about your product, your service or your management style. If you aren’t willing to listen, or if you structure the way in which you listen to negate the feedback, you’re setting yourself up for failure, one step at a time. For example, creating a culture that mocks and demeans your clients is not a recipe for success, and closes you off from valuable feedback from those clients.
Being willing to accept feedback is only a first step though. You have to create a context in which employees are not afraid to give you that feedback, and in which they believe that providing feedback is worthwhile. If people believe they’ll be punished for being critical or regarded as “not a team player,” it’ll be hard to get them to provide feedback.
Next, you need to clearly define your goals and also define how you’ll know whether you’re succeeding or failing. Robotic Chromosomes had very fluid definitions of success, definitions that shifted regularly to avoid facing unpleasant results. It’s important to separate the evaluation of the feedback you’re getting from the testing to see if the criteria for that evaluation are valid. In fact, verifying the validity of your criteria should be done before you then evaluate your feedback: otherwise, it’s too easy to redefine success and give yourself a few more cuts. None of them seem all that bad at the time.
Step by step, over the course of several years, Robotic Chromosomes successfully created an environment where any negative feedback could be ignored because that feedback was always coming from idiots. Their competitors didn’t drive them out of business. They drove themselves out of business; their competitors simply put them out of their misery. How will you avoid the death of a thousand knives?
Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead (www.7stepsahead.com), an organizational development firm focused on helping leaders grow their businesses. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill, and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” Contact him at steve@7stepsahead.com.
