Are You Managing to Prevent the Worst or Bring Out the Best?

July 10, 2014
# min read
Paradigm Associates LLC

If most of the people in your company hit the lottery with a huge win, would they come to work the next day? If you thought "Who are you kidding?" after that question, maybe it's time to take a long hard look at how you're managing your human assets.

I often think back to the rescue of Chilean miners last year. If you watched any of the live coverage, you'll have seen what I can only describe as a triumph of human potential, a mixture of ingenuity, courage, perseverance, and collaboration. Think of the resources that were brought to bear and coordinated -- local resources, the mining company, the Chilean government as well as international resources, from NASA to the small Pennsylvania company that made the drill bit that reached the miners. Think of the leadership and coordination, the shift leader, the psychologist giving guidance to keep the men in good spirits. Think of how the miners engagement in their own survival. Seems that people at all levels took responsibility for that rescue. I didn't see any "us" and "them" during the whole effort, just "we."

Extraordinary circumstances? Yes. But doesn't it also illustrate that given the right circumstances, people can rise to the occasion and do whatever it takes to accomplish the goal? I've found, both as a manager and a consultant, that (a) you can create a work environment in which people will "run through walls" for you and (b) if you haven't done that, you're probably leaving a lot of money on the table.

Following are some thoughts on how to create such an environment:

Max DePree, 2nd generation CEO of Herman Miller furniture manufacturer, in his book Leadership Is An Art makes a distinction between contractual and covenantal relationships. Contractual relationships cover things like expectations, objectives, compensation, working conditions, benefits, incentive opportunities, constraints, timetables, etc. - the quid pro quo of working together. Labor agreements are a good example.

Another example could be a written succession plan and operating agreement for management succession that spells out the management structure and transition process. They may be necessary for a smooth transition, yet like labor agreements, they are not sufficient for the business to really thrive and succeed.

DePree cites this thought from Alexander Solzhenitsyn -"Whenever the tissue of life is woven of legalistic relationships, this creates an atmosphere of spiritual mediocrity that paralyzes men's noblest impulses." Additionally, "legalistic thinking induces paralysis; it prevents one from seeing the scale and the meaning of events." On the other hand DePree talks of covenantal relationships that "induce freedom, not paralysis. A covenantal relationship rests on shared commitment to ideas,to issues, to values, to goals, and to management processes." Covenantal relationships "fill deep needs and they enable work to have meaning and to be fulfilling."

Research by Theodore Herzberg in the 1960s and The Gallup Organization, Towers Perrin, and the Federal Reserve Bank of Boston more recently documented the distinction between factors that keep things from falling apart and those that create higher levels of performance and positive business results. The former consist of things that DePree cites as examples of contractual relationships - compensation, benefits, working conditions, expectations, objective, timetables, etc. They may keep people from leaving the company for a better offer, but they'll never get people engaged, going the extra mile for their employer, getting outstanding results.

Covenantal relationships and the factors that create, encourage, allow higher levels of commitment and performance include things like recognition, meaningfulness of work, trust (two-way, horizontally and vertically), being cared for as people not just as workers, having the opportunity and resources to do their best every day, and things like that. Dan Pink, in a video you may have seen on YouTube, put it in terms of creating a workplace environment with these three ingredients:

Self-direction. Especially in a fast-paced business environment where it's critical that people act and react quickly, make sure people understand the contribution that's needed from them, and give them the autonomy to do it. An entrepreneur who built and sold four businesses (she was currently on her fifth) told us the key to her success was, "I hire the right people. And I spend a lot of time making sure they know what done looks like. Then I turn them loose to do their jobs." Initiative and creativity emerge that may otherwise have never seen the light of day.

Mastery. Most people have an urge to get better at things they do. Allow and expect themto do that. Whether through appropriate challenges, training and developmentopportunities, frequent feedback and discussion, or providing the right toolsto do their work, give people an opportunity to excel. A question in one of theGallup surveys of the links between employee opinions and business results was,"Do I have the opportunity to do my best every day at work?"

Meaningfulness. People need to know that there is significance in what they do beyond making a profit. That doesn't mean profit isn't important or that employees are averse to the company's making a profit. It does mean that people are motivated to perform better when there's significance beyond the profit. Several years ago at the conclusion of a presentation we did at a conference at Bellagio, I thanked the staff people who were rearranging tables and chairs, refilling water pitchers, and replacing pads and pens for making it so easy for us to conduct the workshop. One of them replied, "That's why we're a five-star hotel." There was something about her job and her employer that she could be proud of, and she was.

When those three ingredients exist in your business and are supported by every leader, manager, team member, you'll have gone a long way to developing and sustaining an engaged workforce and an improved bottom line. Oh, by the way, apply same to family members in the business as well as to non-family members of your staff. If done religiously, you just may be amazed at the difference it makes.

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