I listened and spoke to a lot of the leading management thinkers in the world at the Drucker Forum. Everybody is pretty much in agreement that we need to sort out our economies and to do that we need to have meaningful work to enable everybody’s full potential and capacity to be realised for their individual good as well as their employers, the economy and society generally. As always with this high-level thinking, there’s plenty of good research and evidence to support it, and some examples in real life companies, and that number of companies is growing. I had some input into one of the Creative Economy posts published on the Forbes website presented at one of the sessions in the Drucker Forum 2014 recently, which gives a flavour of current thinking.
The oft quoted case study at the Forum was of Morning Star – a California tomato producer which employs 4000 people with a very flat management structure. So flat in fact that anybody can make a capital expenditure proposal, and if it is validated by their peers, it happens.
But still it felt to me that there was something missing. Reading the Morning Star case study by Gary Hamel on the Harvard Business Review blog, it struck me that yet again only corporate objectives have had any credence. We all talk about engaging our employees better, but we don’t seem to bother to find out what objectives those employees have in coming to work. If we simply brush this off as they get paid and incentivised to do better whilst at work, then we’re not that far from the Henry Ford model even after a hundred years. We are still only paying lip service to employee engagement, because we’re still using a simple measure which is money or money equivalents to buy somebody’s time and engagement. If we don’t know what that person values, then we may be missing an opportunity. Dov Seidman spoke at the Forum about How matters in an organisation, and yes it does. But I contend Why matters more and that seems to be ignored by most corporates.
Other sessions at the forum focused on the Mittelstand model, which includes a view of a more extended family to include employees and their families such that sustaining profits is more relevant than maximising profits. The idea is to ensure future generations can benefit from the company model – both future generations of owners, and also employees. This indicates an informal way of understanding employee positions, and isn’t far away from the employee benefits at campuses such as at Google and Nordstrom. These concepts were pioneered by Victorian factory owners such as Lord Lever at Port Sunlight and Cadburys at Bourneville. These paternalistic solutions worked well but left little to employee choice, which at the time was virtually non-existent. Employees have more choice now, and a better standard of living, and might appreciate less paternalism and more inclusiveness.
We do a lot of work with strategic planning for small businesses and always start with personal objectives in detail. That simply doesn’t mean how much money they want but why they want it and what they going to do with it. We drill down to deeply understand what fulfils them as human beings. Aligning business and personal objectives generally produces significant improvements. Then, looking at the business from the customer’s perspective, and aligning this with personal and business objectives produces subtle and powerful forces for change. Businesses become easier to run, with a team that understands themselves, each other, and the business better, and they produces a clear and consistent message to their marketplaces.
Peter Drucker looked for ways of building a more inclusive entity in Management in the 21st Century (1999) “We will have to redefine the purpose of the employing organization and of its management as both, satisfying the legal owners, such as shareholders, and satisfying the owners of the human capital that gives the organization its wealth-producing power, that is, satisfying the knowledge workers. For increasingly the ability of organizations — and not only of businesses — to survive will come to depend on their ‘comparative advantage’ in making the knowledge worker productive. And the ability to attract and hold the best of the knowledge workers is the first and most fundamental precondition.”
But no methods of doing that as part of core strategy are commonplace. We all talk about employee engagement whereas we put should perhaps be talking about employee capability – discovering all the abilities and drivers that each individual can bring so that business and personal objectives can be better understood and overall performance improvements obtained.
There is a lot of talk about customer engagement as well. It is clear that customers don’t want mass produced, push marketed products. Most have enough things- they now want personalised solutions to their needs. If we expect to do this for our customers, why wouldn’t we expect our colleagues to have the same desires, and expect the same attention to them from their employers?
There is a simple structured way of discovering personal objectives, which can be easily integrated into a performance appraisal meeting, such that HR departments could be at the forefront of driving business improvement. There will be mismatches, and those will have to be managed. But it would be better to find those out and manage them explicitly than wonder why capable people continue to slightly underperform or even leave. Some will show scope for improvement and they will need some support. Whatever the results, having the conversation and sharing business objectives will enable managers to get their people very much more onside, much more engaged, and much more able to take decisions which can be trusted. This will help to build a flexible and agile workplace with less need for rigid bureaucracy, so more able to adapt to a fast changing world.