Here’s my contribution to a guest blog series on trainerskitbag.com/blog/. Some great contributions there, check them out!

Trainers Kit Bag

Our next guest post comes from John Costello. John is CTO of careergro, the social development planning tool for employees and you can follow him on Twitter here.

John’s learning experience has a sporting context but more arm power and less horse power…

I recently had a learning experience in which the challenge stretched my skills.  I was out of my comfort zone and, in terms of the flow model by Mihály Csíkszentmihályi, I was in a state of arousal and at times anxiety.

Flow is the mental state in which a person in an activity is fully immersed in a feeling of energized focus, full involvement, and success in the process of the activity. To achieve the state you must have a balance between the perceived challenges of the task at hand and your perceived skills.

The river trip

When I joined my two Kayaking buddies Ger…

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Career development from the bottom up – Talk to Organisational Psychologists

Last week the Division of Work & Organisational Psychology (DWOP) of The Irish Psychological Society invited me to talk on the topic of career development. It was one of the first really fine evenings of the summer and I was a bit concerned about whether or not we would get an audience.  It turned out to be a great event, with real engagement from attendees and plenty of discussion. I want to thank them, and particularly Kathryn McCarthy, Heather Weight and Karen Lopez Moore for organising the event.

My slides and an audio of the talk are available here. It is roughly in three parts:

• My career story and how I came to be involved with career development from an engineering background
• The role and importance of career development in organisations, including some discussion about performance management and talent management. See these other posts for more on the topics discussed The new psychological contract , Performance Management v Career Development and The social enterprise, more equal or more successful? .
• A brief overview of how careergro can support employees in managing their career development.

I was scheduled to talk for 1 hour with 20 mins for questions, however I was interested in getting some discussion going with everyone in the room and so I spoke for less than 30 mins. The discussion continued for at least 40mins, which was great. Even better if the discussion continues here, so please share you comments, thoughts and questions below.

The social enterprise, more equal or more successful?

Last week I attended the connectingHR unconference on the theme of ‘The Power of a Socially Engaged Organisation’.  Many things were discussed (See here, here, here, here, here and here.), but the question that I want to focus on is: what is the case for social media tools in the enterprise?

Democratic work place

Miranda Ash (@mirandaash) from WorldBlu spoke about freedom and democracy in the workplace, “Organisational democracy is a system of organization that is based on freedom, instead of fear and control. It’s a way of designing organizations to amplify the possibilities of human potential — and the organization as a whole.”  Enterprise social media (i.e. the use of social media tools to connect people within an organisation) is one of the enablers of organisational democracy. Read our post about HCL technologies for a case study.

In an excellent post – Less formal doesn’t mean more equal – @FlipChartRick   reminds us that, in general, while hierarchies are becoming flatter and company culture less formal, pay differentials across organisations are growing and the control of  resource allocation remains in the hands of those at the top.

“So, while it is difficult to deny the impact of technology and changing social attitudes on organisations, I’m still not convinced that this will lead to any form of organisational democracy. Real sharing of control would mean that big decisions about resources would be opened up. Corporate leaders are still extremely reluctant to do that.”

This is an interesting debate, but it is a debate about organisational design and control. Is this the core issue? I think that is it more useful to ask: can social media in the enterprise contribute to success and how? After all, an organisation is a group of people who come together and hope to achieve more than they would as individuals.

Organisational success

In ‘Organisational Deign’ 101 I was taught that the primary goal of any organisation is to survive, and after that to grow and be effective. Survival is a crude measure of success, but it’s a good indicator that the organisation is achieving it’s mission effectively, otherwise it will cease to exist over the long run. Some of the most successful organisations in history are the world religions and universities. These organisations have very different designs, with religions tending towards a bureaucratic design and universities towards an organic design, i.e. with more autonomy and a flatter structure. If both can succeed then what is the right one for your organisation?

It depends on the environment. For organisations where there is a slow rate of change in the external environment a more bureaucratic type of organisation is more effective, whereas in a fast changing environment with a lot of information to process a more organic structure is more effective.

Not in Kansas anymore

In the past most organisations were bureaucratic. A small number of organisations, for example R&D intensive organisations, were more organic.

Deloitte’s career lattice

Today an increasing number of organisations operate in an environment where a high level of information processing is required. This is driving the trends of flatter organisations and more knowledge workers. It’s not possible for a bureaucratic hierarchy to control and coordinate everything in a fast paced environment like this, it’s better to have a more organic structure where individual employees have greater autonomy over their activities, coordinate with their peers and make more of their own decisions.

In addition the career ladder has been replaced by the career lattice and individuals are expected to take responsibility for their career development. For all sorts of reasons (ensuring that the organisation has the right people and that they are highly motivate) it is critical that career development within organisations works.

Coordination: the role of social media in the enterprise

Typical informal communications network in an R&D laboratory – Allen 1971

Knowledge intensive organisations have always relied on informal networks, inside the enterprise, to process information and to coordinate activity. Enterprise social networks can support and amplify those networks. Yammer is a well known tool which can be used for this, although almost any other social enterprise tool can be used for this too.

Other tools such as basecamp and Jive are used for coordinating project work in a social way, allowing employees to socialise project tasks and collaborate across the enterprise. Thompson Reuters gave an impressive demonstration of this at the connectingHR unconference.

Control or alignment: the role of Social media in the enterprise

It’s clear that social tools can help co-ordination in the flat, knowledge intensive organisation. What about control? In a bureaucratic organisation control is exerted through specific detailed goals and a carrot and stick system of rewards and punishments.  We know that the carrot and stick is at best ineffective and can be counter productive in the case of the knowledge worker.

In the knowledge world some of the control via carrot and stick is replaced with alignment between the purpose and goals of the organisation and the needs of the employee. Knowledge workers who are intrinsically motivated by their work, feel a sense of shared purpose with the mission of the organisation, have some autonomy over their activity and are continually developing and achieving mastery in their role will be high performers and an organisation with these people will succeed. Daniel Pink has popularised these ideas recently in his book Drive, however they are not new in knowledge intensive organisations.

A good starting point is to hire for fit (intrinsic motivation and alignment with the purpose of the organisation) not skills, as discussed in this HRB piece.  Careergro is a social career development tool to help employees maintain a good fit (purpose, intrinsic motivation and ability) as they navigate the career lattice, to socialise career development goals so that achieving mastery becomes a continuous and collaborative activity and to give them a tool that makes taking responsibility for their career a realistic proposition.

Are you using enterprise social media tools in your organisation? It would be great to hear if they are contributing to success or not and the reasons why. If you’re not using these tools let us know why not.

The new psychological contract

According to the CIPD, the traditional employee psychological contract is generally described as an offer of commitment by the employee in return for job security provided by the employer  – or in some cases the legendary ‘job for life’.  An employee joined an organisation and stayed for many years, working his or her way up the hierarchy.

The recession of the early 1990s and the continuing impact of globalisation are alleged to have destroyed the basis of this traditional deal since job security is no longer on offer. Very few organisations claim to offer careers for life any more. Organisations are flatter and need more flexibility, which means they cannot offer long-term career advancement in return for loyalty, organisational commitment, and good performance, which used to be part of the psychological contract.

A new psychological contract has emerged.  Employees still want job security, that much hasn’t changed.  What has changed is that now security comes from being employable rather than being employed.  Employees today offer high productivity and commitment while with their employer.  By contrast, employers offer an improved employability: employees can develop and practise skills in demand while employed, which gives them a better chance to find a new job when the current employer no longer requires them.

Responsibility for career management has moved from the company to the individual: modern employees do their own career management. Success is now seen as achieving personal goals, rather than attaining the lofty heights of an organisation’s hierarchical structure.  Although responsibility now rests with the employee to manage their own individual careers, the reality is that most employees do not do this.  Research suggests that most people rely on luck or random opportunity for their career development, as few as 25% do any actual planning.  Those who practice career development need to create their own opportunities to suit their own personal preferences.  This may involve working long hours, seeking guideance from more experienced employees and building strong network relationships.

However, studies show that most individuals are not very good at career self-management.  The common lack of personal drive in this area is possibly why organisations that offer career development support to their employees are popular with potential recruits.  A company that supports the development of its employees will garnish respect, because it is seen to attend to employee needs, and not just the needs of top management.  As a result, company driven career management encourages commitment, motivation, performance and reduces turnover, all good outcomes for the company.

Is this new psychological contract alive and well in your organisation?

Can social engagement reduce the risk of losing face and boost performance?

Have you ever been reluctant to seek assistance from someone inside your organisation, perhaps afraid of losing face because you need help?

Extent of communication with colleagues

High performers communicate with their colleagues

In a series of experiments, MIT Professor Tom Allen¹ found that people are more likely to look outside their own organisation for ideas, while at the same time these ideas sourced from outside are less useful than those sourced from inside the organisation. The paradox is described succinctly by Allen, “Those information sources that reward the user by contributing more to his performance are used less than those that do not”.

I was reminded of this paradox during recent conversations at the L&D connect unconference and during a meeting with an R&D team at a multinational electronics company. The scenarios described in these conversations were similar; individuals reaching out to their network, reading the literature, attending conferences to seek information and ideas, while in the organisation there existed a rich, untapped resource of people and ideas.

It is essential to take new knowledge and information into an organisation. However, most of the time, most of us should also look to our colleagues if we want to achieve superior results.

Risk adverse behaviour and the cost of loosing face

The paradox can be explained when the decision process of the information seeker is examined in more detail. Gerstberger and Allen² examined the cost, as well as the benefits, to be expected from an information source. Asking a colleague was perceived as high cost, as it was an admission that you needed help, didn’t understand something you may have been expected to know and the risk of losing face was perceived to be high. In contrast seeking information from outside was perceived as low cost. Interestingly they found that the decision makers were risk adverse, focusing only on the cost of the information source. In fact the higher benefit of sourcing information from a colleague had no impact on the decision. This risk aversion is a common finding in the psychology of decision making and helps explain the apparent paradox described by Allen.

Social engagement – Lowering the perceived cost of consulting colleagues

In another study Allen et al³ looked at the role of informal relationships on communications networks in companies. He concluded, “Simply stated, people are more willing to ask questions of others whom they know, than of strangers”. His advice to management is to increase the number of acquaintanceships within the organisation. He recommends an active program of transfers of personnel between different parts of the organisation and also support for cross functional projects where acquaintances can form.

There is a lot of discussion at the moment in learning and development circles about social learning and it means different things to different people.  John Curran wrote a good  summary of this in his recent blog post ‘What is social learning?’ . Some see it as learning through social media content (i.e. youtube etc) and others that it’s about learning from each other on social networks.

I suggest that company social networks can contribute to social learning by building acquaintances and lowering the perceived cost of consulting colleagues on important work related tasks, leading to better outcomes and higher performance.

You could counter that real relationships, and high bandwith exchange of information, require face to face communication. I have personal experience of work relationships beginning on-line and then moving offline for high quality exchange of ideas and building deeper relationships. My point is that the online relationships allows people to gain enough trust in one another to make it more likely that they will progress to an off line relationships and to helping one another out with ideas and information that benefit the organisation. This tweet from @MervynDinnen highlights the point “Friendships are made eyeball to eyeball not on social media says @ProfCaryCooper – ignoring that many take online relationships offline”

The research that I have cited is quite old, however I believe still valid. I have heard Tom Allen speak several times in recent years and he has continued his research in this area right up to this day. I’ll be attending ‘ConnectingHR Unconference – The Power of a Socially Engaged Organisation‘ on the 16th of May 2012, and I hope to learn more on this topic there. It would be interesting to hear your experience. Can social engagement reduce the risk of losing face and boost performance?

References:

1 T.J. Allen “Communication networks in R&D laboratories”, R&D Management, 1971, vol 1, 14-21

2 Gerstberger, P. G.  Allen, T. J. (1968) ‘Criteria used in the selection of information channels by R&D engineers’. Journal of

Applied Psychology, V01. 52.

3 Allen, T.J., Gerstenfeld, A., Gerstberger, P. G (1968) “The Problem of Internal Consulting in the R&D Laboratory”, Cambridge, Mass.: M.I.T. Sloan School of Management, Working Paper No. 319-68.

Learning in the woods

Last week I attended the L&D Connect Unconference and met lots of people interested in a conversation about learning and development (L&D). Please have a look at this video by Martin Couzins and this storify by Ian Pettigrew from the event. One of the people I met was Flora Marriott who wrote this post on what she’s learned from trees. I’ve spent a lot of time in the forests in the Dublin mountains over the last year and Flora’s post got me thinking about what I’ve learned in the woods. Of course the discussions at the Unconference find a way in here too.

About 18 months ago I took up mountain biking and joined a local club. The first few times were a bit hairy and there were quite a few spills. I was hesitant, nervous and maintained a clenched fist on the brakes. However I really enjoyed the activity, the social side of it and getting to see a new side to Dublin, so I kept at it. Fast forward to last weekend and I took some friends out for their first time mountain biking. They were hesitant..you get it, they were like me when I started. I realised for the first time that I had developed my ability significantly (with still a long way to go!).

My development experience

As Flora says in her post, it’s long term. I didn’t develop new skills and abilities overnight, in fact I wasn’t even aware of how I had developed until time had passed and I was reminded of where I had started from. I did have a clear idea of what I was trying to achieve and I was able to draw on the experience of others in the club, on line resources etc as needed to help me progress. Mostly, I learned by doing, there were no training courses although that might be useful in the future. Learning was fun, social, and challenging. I was usually operating in a state of flow, immersed in the activity and at level of challenge that was pushing my ability (though not too much). Importantly there was no fear of failure, it’s expected that things will go wrong every now and then and if you play it too safe you feel like the odd one out.

Learning in the workplace

Ok, it’s nice to know about my mountain biking but what’s the relevance to work?

First I think it’s important to pay attention to how we learn. Is it engaging and continuous or tedious and short lived? I think on the job, experiential learning, in a social environment certainly works best for me and delivers results over the short and long term.

Secondly, how to balance short term and longer term learning needs?

Day to day learning needs arise due to performance requirements in your current job. Most people and organisations have this covered to some extent and it drives much of the learning in organisations.

Competency frameworks can guide learning and development (L&D) for more medium term objectives, like advancing to the next rung on the ladder. Competency models are developed from the top down and are relatively static, compared to the blistering rate of change in the world of work. Is it possible for them to capture the full picture, especially over the long term and to stay relevant in a changing world?

There are a wider range of career skills, skills in your chosen field and skills that go beyond the roles defined in the competency model, which may be essential for long term success. Each individual should think about what these career development objectives are for themselves work towards them over the long term and in a way is relevant to their current role.

Ideally career development will be a healthy balance of performance driven L&D, competency driven L&D and L&D driven by the career development needs of individuals. It should be a social experience,  engaging and tolerate failure. Mostly, I think the individual needs to be the one who owns their career development, even the performance driven elements of it.

How does all this work in your company? Do you struggle to balance long term and short term L&D? Who owns career development, HR, line managers or individuals?

Personal experience of becoming a learning organisation

One of the case studies to be presented at the forthcoming CIPD HRD 2012 conference and exhibition on Learning and Organisational Development (April 25 & 26, London) is titled: ‘Becoming a Learning Organisation’. The study is a joint presentation by Andy Holmes of Ernst & Young and Andy Doyle of ITV, see:
http://www.cipd.co.uk/cande/hrd/conference/_SeminarDetails.htm?guid={77E19A2D-8172-41B9-8EDD-57CC8B94848C}

Their presentation looks to cover the following topics:

• creating an environment where learning is embedded in the organisational culture
• the business benefits of focusing on learning
• developing a proactive approach to learning where employees take ownership of their own development

My colleagues and I at Careergro have spent the last couple of years working fulltime thinking about, researching and talking to a diverse range of people including HR professionals, business leaders and employees about the challenges they face and the issues there are trying to address in improving learning and development for themselves and their organisations.  As a result, we have built the online career development tool Careergro (www.careergro.com) and as is the want of technology companies who like to swallow their own medicine, we have been using Careergro internally to manage and track our own development, as individuals, as a team and as an organisation.  Now in the lead up to HRD 2012, it is perhaps as good a time as any to reflect on our experience with particular reference to the topics above.

To my mind, the key driver to creating a learning organisation is intrinsic motivation.  In our organisation, nobody is told what to learn, the requirement on each employee is to come up with a learning and development plan that meets the needs of their role and to be able to advocate and justify why their development plan is the right one to meet the needs of the organisation and increase the value they bring.  Each employee is still required to meet the performance goals defined for them as part of our strategic objectives.   However, we believe our individual employees are best placed to identify how they need to develop themselves to meet those goals.

The online career development tool Careergro has three main sections:

1. Assess: career coaching assessments designed to grow awareness both of ourselves and our fit with our current and/or future role, but also of the world of work around us which can be used to help identify areas for learning and development.  These include considering how we can better align our role with our values, identifying the skill strengths that we can work to master and considering the trends and changes happening around us in our team, organisation and industry.  There are also more advanced assessments which include for example looking at our limiting beliefs.This awareness is I believe key to creating an environment where learning is embedded in the organisational culture.  To paraphrase Donald Rumsfeld, if we don’t know what we don’t know, we are not going to be very motivated to learn.  Likewise, being told what we don’t know by our line manager and promised extrinsic rewards for learning has proven time and time again to be ineffective when competing for time against achieving other performance related goals.  The only true way to ensure the learning takes place is for it to be intrinsically motivated.
2. Develop: an online development plan supported by automated email reminders where we can define our learning and development objectives and the actions that we will take to achieve them.  This development plan is shared with our manager to get their feedback, approval and support.Providing our employees with the tools to allow them create a development plan for themselves that they can then collaborate on with their manager and colleagues is the most effective way to develop a proactive approach to learning where employees take ownership of their own development.
3. Share: an online enterprise activity feed where we can share achievements, completion of development actions and other development related updates, give thanks, ask questions and receive recognition from our managers and peers – essentially an ongoing social career development conversation with our managers and colleagues.  This is also the place where we capture private feedback from our line managers as part of more formal face to face development reviews.It is our experience that the key to creating a learning and development organisational culture is getting insight into how our peers are developing and the intrinsic motivation that comes from sharing our own learning and development progress.

The key outcomes for me of this new career development journey to date which are driving the business benefits are:

1. my awareness of what brings me satisfaction in my career has grown significantly, even in the tough times I now know why I am doing what I are doing and why it is the best thing for me, this makes going the extra mile very easy
2. I now look at our learning and development as driving our performance rather than as a distraction from it.  Learning and development have now become central to everything we do
3. actively managing my career has brought a great sense of control over our destiny which greatly helps with managing stress
4. the trust that transparency into our learning and development activities has fostered is greatly enhancing our team and organisational performance and  engagement

I am very much looking forward to seeing how my experience compares to the case study to be presented at HRD2012.  I would also love to hear what drives learning and development in your organisation.

Kevin

Twitter: @ksorohan

Current best practices in employee development and innovations to look forward to

One of the case studies to be presented at the forthcoming CIPD HRD 2012 conference and exhibition on Learning and Organisational Development (April 25 & 26, London) is titled: ‘Creating a leading organisation through innovative people development’. The study is a joint presentation by British Airways and the London Organising Committee of the Olypmic and Paralympic Games (LOCOG). The link to the session is here.

In anticipation of the presentation and in order to recognise the innovations for what they are, I thought it would be a good idea to recap on current best practices in employee development. I am going to reflect on two sources and then introduce a valuable reference table from Bersin & Associates http://www.bersin.com/.

Cornell University identified six ‘Best Practices in Employee Development’. They are:

• Use shared services – to avail of synergies and to deliver training needed to develop required competencies
• Make use of online training
• Leadership development – instigate formal programs
• Benchmark your development practices – to maintain competitiveness
• Provide career development services – high performing organisations typically do this. The listed benefits: retention, employee mobility and succession planning
• Secure and share organisational knowledge – make it easy for employees to find and share knowledge, foster informal ‘communities of practice’ within the organisation, online and social networking technology may also be of help.

Eric Jackson of Forbes magazine approached the topic from the perspective of addressing the global leadership shortage in business, in his article ‘6 Things Best-In-Class Companies Do To Grow Leaders’ . The practices highlighted are:

• Develop people at all levels of the organisation, not just at executive level.
• Measure progress – people want to know how they are progressing
• Meet with your boss – development programs will fail if the boss is not involved
• Create a development plan and track it over time. In best practices companies, this is supplemental to and separate from the performance reviews
• Encourage mentors – mentor participation should be voluntary
• Discuss your career path – this focus helps to bolster employee loyalty

It was useful to come across these articles and you can see how the approaches could form the foundation of good development programs. The question occurred to me though – how widely should you cast the net in developing the people in your organisation? In the rapidly-evolving, knowledge economy, probably very widely indeed. The words of Sir Terry Leahy, former CEO of Tesco, the UK’s largest supermarket retailer, came to my mind. He has stated that “The key to organisational success is for people from every rung of the corporate ladder to take responsibility. Leadership matters everywhere. The great thing we always tried to achieve at Tesco was to have thousands of leaders, not just one”.

What Sir Terry is describing is the empowered organisation. Here is Bersin’s excellent list of ’40 Best Practices For Creating An Empowered Enterprise’.

I am keen to see how the innovations of British Airways and LOCOG can add to current best practices in people development and to see where they can be positioned on Bersin’s list.

Gerard

Twitter: @Gerard_cpd

Performance Management v Career Development

I listened in to a HR seminar given by Mike McDermott from HumanR yesterday and it answered a very fundamental question for me: what should drive learning and development in a knowledge sector organisation, performance management or career development?

Mike described how performance management up until the turn of the century was based on the following paradigm:

PM = ability * motivation

With the advent of performance management tools over the last decade, alignment started to play a more significant role:

PM = alignment * (ability * motivation * opportunity)

According to Mike, this process is based on work that can be planned with expectations set, where performance can be monitored and abilities developed, performance rated, ratings summarised and top performance rewarded.  This approach is based on scientific management ideas from the likes of Fred Taylor from the turn of the last century, ideas designed for largely uneducated factory workers.

Automating this process made it more administratively efficient, a record was kept, there was legal compliance and it drove compensation within organisations.  Unintended consequences however included the process becoming too formulaic, it became a numbers game, inhibiting meaningful conversations, reducing the voice of the employee and growing the gap between managers and employees with a greater emphasis on external motivators and where the PM process is seen as a necessary evil.

The question Mike posed is what type of performance management system should we use for highly eduated knowledge sector workers who spend their time establishing relationships, evaluating priorities, identifying trends, making connections, brainstorming, focusing, creating new capabilities and strategies?  Mike’s answer focused on intrinsic motivation which directs behavious towards particular goals,  leads to increased effort, increases initiation of activities and enhaces cognitive processing, essentially leads to greater employee engagement.

Mike’s answer involves taking an holistic approach to performance management with 3 cornerstones based on everyday conversations, engagement principles and leadership practices.  Engaging conversations include conversations about what is important, about goals, learning, meaning, recognition and appreciation.  Engagement principles include widening the circle of involvement, connecting people to each other, creating communities of action and promoting fairness.  Leadership practices include speaking honestly, being transparent and being authentic.

Mike concluded with a new paradigm for knowledge sector performance management:

PM = [Org Capabilities * (Conversations * Community * Leadership)] – Under Performers

Mike then went off to ride his bike in the Washington sunshine having greatly enlightened the members of his audience.  The answer I concluded to the question of peformance management versus career development is that it is the wrong question, the real choice is between industrial age performance management and knowledge age performance management.  The sooner knowledge sector organisations realise this distinction the sooner they will increase their performance.

Tim Harford’s ‘Adapt – Why Success Always Starts With Failure’ – How are businesses putting it into practice?

I just finished reading Tim Harford’s latest book: ‘Adapt – Why Success Always Starts With Failure’. Harford is a smart man, as befits a leader writer for the Financial Times and a successful author of popular economics books. He has a particular gift for putting us in our comfort zone by first describing situations we are familiar with before revealing the economic forces at play underneath. He does all this in his trademark breezy and insightful style.

Probably the key issue in the book is: what is the best way to solve complex problems? The narrative flows around the solution to this question. Real-life challenges are explained, a proposed approach is offered (‘Adapt’) and plenty of examples are given to support Harford’s proposal.

As a starting point, Harford argues strongly against a culture of reliance on experts and centralised management in the face of complex problems. He cites research which demonstrates that the power of experts to make accurate predictions is poor. Harford uses both the USSR and Donald Rumsfeld’s stewardship of the war in Iraq as examples of spectacular failures of centralised control. Both were guided by top-down, all-knowing ideologies and both were intolerant of dissent. Consequently, both were incapable of learning what was happening on the ground and were blind to evidence that what they were doing was not working.

For truly complex problems Harford argues that a ‘trial-and-error’ approach to problem solving works best. He draws on evidence from biology (evolution), business and military warfare to support his case and outlines the three steps to follow, given here:

1. first, seek out new ideas and try new things (‘fail often’);
2. when trying out new things, do so on a survivable scale;
3. seek out feedback and learn from your mistakes

In supporting this approach, Harford stresses the value of having a  ‘worms-eye’ view of the situation, whereby those solving the problems get to see them up close. What implications does this have for business? It means that we need to encourage feedback from the coal-face of the operation. For example, we should consider: What is the true nature of the problem the customer has? What does the customer really value? We need, therefore, to harness the wisdom and experience of the employees who are working in the ‘value zone’ of the company. This is reminiscent of the Employees First Customers Second approach taken by Vineet Nayar and HCL Tech (http://blog.careergro.com/2012/03/14/the-employees-first-customers-second-phenomenon/) where Nayar is adamant that it is impossible for him, even as CEO, to know all the answers. Consequently, Nayar made conscious efforts to empower HCL Tech employees to take the initiative in and responsibility for solving the business’ problems.

In ‘Adapt’, Harford provides examples of companies which take a decentralised approach to the successful operation of their businesses. One is the UK high-street repair-service retailer, Timpson, whose business model is founded on a culture of transparency and on staff being empowered to solve customers’ problems as they arise. Timpson has gone so far as to remove EPOS systems from his shops because he wants the local outlets rather than head office to run the business.  The owner, John Timpson calls his approach ‘Upside Down Management’ and has, literally, written the book on the subject http://www.amazon.co.uk/dp/B003NX730G/ref=rdr_kindle_ext_tmb

A second example is W L Gore, which Fast Company magazine has labelled ‘the world’s most innovative company’. From the outset, W L Gore believed that engaging his employees was critical to his goal of Gore becoming an innovative organisation. To this day, Gore associates set their own career goals, self-commit to the work they choose to do and feel a deep association with the goals of the organisation. Gore is a perennial on the ‘great companies to work for’ lists. See an excellent interview with Gore CEO Terri Kelly by Gary Hamel here: http://blogs.wsj.com/management/2010/03/18/wl-gore-lessons-from-a-management-revolutionary/

What Timpson, W L Gore, HCL Tech and Whole Foods (also featured by Harford) each do, in addition to giving employees freedom and responsibility in the business, is to  make them accountable to each other. Each organisation places a lot of weight on peer-to-peer feedback. With bottom-up power comes peer accountability, it seems.

Thanks to Tim Harford for yet another good read. You can find out more details about him, his books and his other activities at http://timharford.com/

Gerard

Twitter: @Gerard_cpd