Douglas McGregor

Thou shalt care for thy customer!

giantknave Brain Farts , , , , ,

I haven’t published a post for ages. However, I was part of a conversation last week in which I realised that I’d drafted a relevant post a couple of years ago. Here it is:

Show me a service organisation and I’ll likely be able to show you posters on their walls imploring (or perhaps commanding) their front-line employees to ‘care about their customers’ (or clients1).

I expect that we are all in agreement that we should care about our customers – who they are, what their situation is, what they really need, how they are thinking/feeling (because of the past, the present and their view of the future)…

…BUT whether our employees can and will ‘see the customer’, and whether they act accordingly, will depend.

The conventional way to ‘convince’ employees to care is to roll out some form of a ‘we must be customer-centric’ programme (which likely includes those posters on the wall). There might even be some framework rolled out to score how well each ‘service agent’ did within each customer interaction or (so called) ‘moment of truth’.

However…

‘Customer-first programmes’ are essentially an attitude/orientation exercise.

All too often we discover that people return highly motivated from an excellent training experience only to find an organisation with procedures, systems and other conditions which do not adequately support the values expressed in the programme.

People can’t delight the customer if their organisation won’t let them!

(John Seddon)

Seddon is clearly questioning the simple (simplistic) notion that ‘our people’ are the problem…and therefore where to aim a (supposed) solution to this.

But what about the ‘bad eggs’?

You might respond with “Yes Steve, but I’ve got clear, undeniable evidence of some of our people providing really poor service to our customers!” and, yep, I’d expect that you do. Perhaps even bucket loads of it.

The fact that poor service often happens isn’t in doubt.

The question that needs asking is “why is this happening?” And just to be super clear, NOT “who did we catch doing it?!”

If you know the why, then you will know what to act upon to achieve meaningful and sustained improvement.

Conversely, you can spend all day rooting out the ‘who’, and perhaps publicly ‘parade them around’ with the aim of shaming them for all to see…but I doubt you will achieve any meaningful improvement to your system and its performance. In fact, likely the reverse.

A self-fulfilling prophecy

So, we want our front-line employees to be ‘customer-centric’ and yet we regularly see instances where it can be said that they weren’t…and it is very easy to fall into a ‘blame game’.

However, a quote to ponder:

“When we take people merely as they are, we make them worse.

When we treat them as if they were what they ought to be, we help them become what they are capable of being.”

(Translation of Johann Wolfgang von Goethe, 1795)

I really like these words, and they have been repeated in various forms by many since they were first written. In fact, it’s almost a perfect fit with the work of Douglas McGregor (ref. Theory X and Theory Y).

To me, there are three points worth drawing out from von Goethe’s quote:

  • ‘As they are’: If we look to blame a person for the poor performance that occurred during an event that they were involved in, then we’ll be heading in the wrong direction!

  • ‘What they ought to be’: If, however, we start from a position of presuming that a person would want to do the right thing (and was likely born that way), then we change the game completely. Clarification: This isn’t denial of what has happened, just a better starting point to move forwards.

  • ‘What they are capable of being’: What I particularly like about the quote is that von Goethe wasn’t suggesting that all people can do/be anything and everything.  Rather, he recognised that people are individuals and that, if they are treated accordingly, they can achieve what they are capable of…which is likely to be far greater than what we can currently imagine.

Do you believe your own rhetoric?

If you are employed in a ‘leadership position’2 then I expect that you often find yourself talking with your team about how they should behave. In fact, if you stood back, this might be somewhat of a ‘broken record’.

However, I am reminded of the proverb “do as I say, not as I do”.

Turning this around – and therefore realising why this proverb is often stated…to little effect – is to make clear that people take note of what you do and use this as their guide…no matter what you say.

Those in leadership positions are responsible for the organisational system – its purpose and the working environment. You can say ‘wonderful things’, but the system you preside over is the key.

“People’s behaviour is a product of their system. It is only by changing the system that we can expect a change in behaviour.” (John Seddon)

Management is responsible for that system, and therefore the behaviours that it produces. No amount of ‘training’ or exhortation will undo this tie.

In short:

  • beware the dissonance between management talk and management behaviour

  • don’t spend (waste?) time exalting people to ‘care for thy customer’, provide them with an organisational system in which this is the obvious and natural thing to do

  • to do this requires much reflection as to why things are as they are, which can be discovered  from regular and respectful ‘eyes wide open’ time ‘at the Gemba’

Footnotes

1. Customer or client?: I was interested as to whether there is a meaningful difference between the use of these two words…and, after a bit of a trawl through definitions, I think that there is.

The Oxford dictionary sets out the origin of the word ‘client’ as a person who is under the protection of another i.e. dependent upon them.

The normal use of the word ‘client’ (as opposed to ‘customer’) is when it is associated with the services of a professional (examples: lawyers, accountants,….plumber) and so this now makes some sense…

I am a customer where I am clearly in control of what is happening and can make my own choices e.g. transactional situations.

I am a client where I am highly reliant on another and their care over me.

2. Leadership position…which is very different to ‘leading’. Ref. an earlier post on the notion of leadership

Being an All Black

giantknave Brain Farts , , , , , , ,

hakaSo a few people have sent me the link to the recent Steve Hansen interview* (20 mins. long) – thanks for that, it’s very good and worth writing this post about.

* For those of you who live on a different planet – Hansen is the current coach of the All Blacks (that’s a rugby team!) and is currently at the 2015 World Cup in England.

Listening to the interview shows how truly special the All Blacks environment is. I pick out below what I think are key things said that are applicable to any/ every organisation that wants to continually strive towards its true purpose:

(Quotes are in blue text with my thoughts following in black)

Interviewer’s Question: “…What defines Steve Hansen’s All Blacks?”

Steve Hansen’s Response: “It’s not Steve Hansen’s team…it’s about a collective group who are trying to do something [purposeful]….we have to set ourselves some lofty goals, and some people may say that’s arrogant, but I think if you want to achieve something in life, you’ve got to set big goals…”

This links to the setting of a clear challenge* such that everyone involved understands and wants to drive towards it, not for the leader but for themselves.

As such, this challenge has to be:

  • Meaningful: about making the world a better place in some way;
  • Tangible: easily relevant to everyone who is to be involved, not distant and abstract; and
  • Real: not a fake side-act for something else (see POSIWID).

*The challenge is not about a solution – you should know where you want to go but not impose how you believe you are going to get there (See How to have a successful journey).

Interviewer’s Question: “Is that one of the defining factors – the fact that it is a collective?”

SH Response: “…for this team to really play well, we need to be as one and the team has to be greater than the individual…”

This fits perfectly with the idea of systems thinking. The All blacks are a system made up of component parts – 15 individuals on the pitch, 7 on the bench, more in reserve, coaches and back room staff.

They want, and need, to optimise the system, not its component parts.

Every player will want to be picked in the 1st 15…but will work together even if they are not. If Dan Carter isn’t picked for a game, you’d still expect him to use all his 100+ caps of experience to help his replacement…and he most certainly will – and if you doubt it, look for the water boy!

Interviewer’s Question: “You’ve talked about humility and..devolving leadership…as the coach…you have to give up some control. Is that right?”

SH Response: “Well, it might seem like you have to give up control, but, really, it’s not about control. It’s about everybody going in the same direction, trying to achieve the same thing, so you’re not having to control anyone to do that. They want to be alongside you. And in some cases, you want them to be in front of you because they’re the people that are out there playing, and they’ve got to make the big decisions in the moment in the contest. And all we [the coaches] are is here to facilitate an environment…that is conducive to them being able to play.”

This echoes everything posted on this blog about the important thing being the environment. We need to move away from a ‘command and control’ logic (and all its management instruments of torture) and replace it with a realisation that Purpose + Environment = the starting point!

Then, and only then, will the whole team truly work together for the good of all.

Purpose is necessary. Environment is necessary. Neither, on its own, is sufficient.

The other point is that it is about the people ‘at the Gemba’ making decisions. The coach’s job is just to provide the direction and support to enable this.

Interviewer’s Question: “How do you, Steve Hansen, see…get the feel for what a player needs?”

SH Response: “Well, once we’ve talked about the team coming first, the team’s made up of a whole lot of individuals, so you try and do your best to get to understand the individuals and what makes him or her tick…You’re really looking at them, ‘how am I going to get the best out of that person?’ along with the other guys that are helping you do that. It’s about watching them every day…you just know after a while when you’re rubbing shoulders with them all the time what individuals need and what they don’t, and I guess that’s the art of coaching.”

This echoes what was written in People are people so why should it be. We are all different, we have different strengths and weaknesses – the task is to develop each and every one of us, not judge and compare us!

Interviewer’s Question: “…you spend a lot of the time motivating the team…”

SH Response: “Interestingly enough I don’t think my job is to motivate the team. My job is to create an environment where motivated athletes can perform…”

I think Hansen might have read a bit of McGregor and Herzberg

He understands that I can’t motive you…but I can strive to provide an environment that has the best chance of you getting the best out of yourself for the good of you and your team.

I very much doubt that Hansen uses the management tools of cascaded personal objectives, individual targets, judgement and extrinsic rewards. Can you imagine him taking, say, SBW (that’s one of the players) to one side and saying “Right Sonny, your target this game is 6 offloads, 4 crunching tackles and 2 tries and if you do it, I’ll give you a sports car”. This would destroy the collaboration that he wants from his collective. It would make it about the individual rather than the team. It would make it about hitting the target and then doing no more.

Who’s had a son or daughter playing sport and seen what happens when a parent tries to motivate their child with, say, money for scoring a try (or goal or…). It is a coach’s worst nightmare! How on earth can they persuade this individual to get that ‘dangling carrot’ out of their mind to pass that ball?!

Interviewer’s Question: “Everyone wants to get better. I mean, how do you actually do it?”

SH Response: “I think it’s about living it every day. You create an environment where you’re living every day trying to get better and you’re not accepting that what you’re doing today’s good enough. And I think if you keep pushing that and everyone’s bought in to it first and foremost and then you keep pushing it and driving it, it’s achievable. But the minute you decide that ‘Okay, we’ve arrived’ someone’s just going to draw [go] straight past you…”

He understands that it is a never-ending journey and the moment you think ‘aren’t we just great!’ then you are in trouble.

It’s also about looking at yourselves and what you are doing rather than trying to be like somebody else (see Benchmarking – worse than cheating)

…and finally:

Whether they achieve their lofty goal (retaining the world cup) or not, I think you’d agree that they appear to be going about it in a fantastic way.

When I look back at Steve Hansen’s interview I think ‘he really gets it’. I also believe him – I don’t think he is just saying it…and, as such, I would follow him (I just need to get good at rugby now!!!).

If you didn’t know differently, you could easily think that Hansen was a student of Deming and Ohno …and who knows, he might be!

An Exercise in Futility

giantknave Brain Farts , , , , ,

Dalmatian-chasing-tail-006Now this post is a bit longer than normal, but I hope that the 1st quote grabs you and sucks you in…I reckon that once you start you won’t stop 

“Performance evaluation is an exercise in futility” (Scholtes)

Every organisation operating a ‘command and control’ management system uses the performance appraisal as a key tool in its arsenal.

The contention in this post is that one of the key steps in providing an environment that fosters a highly motivated and capable workforce is to scrap the performance appraisal system and replace it with something far better.

Problems with performance appraisals

Let’s first consider just some of the problems with actually carrying out what might be considered a valid performance appraisal of an individual – that’s you and me:

  • Appraiser Bias: Performance assessments tell us as much about the appraiser as the appraisee. It tells us how harsh a critic the manager is, how good a job he/she expects the employee to do, how well the two of them get along, what basic values they share and even whether their backgrounds are similar; 
  • Management performance: The quality of management has a huge influence. “any individual’s performance is, to a considerable extent, a function of how they are managed…so the manager is in part evaluating him/herself without appearing to do so.” (McGregor) 
  • Interdependence: None of us act alone. “Almost nothing is accomplished by an individual operating alone. Most work is obviously a collective effort. Yet even workers who seem quite independent depend on others for ideas, stimulation, feedback, moral support and administrative services.

When an individual makes some heroic effort and accomplishes an extraordinary task, often he or she can take the time to do that work only because others have filled in on the less heroic parts of the job. When someone is credited with a success, he or she is individually honoured [e.g. by money, award, public acclaim] for what was most likely the work of many.” (Scholtes)

  • The effects of the system: Deming used his famous red bead experiment to illustrate this point simply yet brilliantly. He explains that the performance of the employee is 95% governed by the system that they work within. The ranking of people is actually merely ranking the effect of the system on the people. 

“It is simply unfair to the extent that employees are held responsible for what are, in reality, systemic factors that are beyond their control.” (Kohn)  

  • A straight jacket: Appraisals ‘compare’ everyone against a uniform expectation (albeit per manager – see 1. above) rather than understand and embrace the reality that everyone is unique, with very different (often subtle) contributions to make.

Deming wrote the wonderful words that “a [true] manager of people understands that people are different from each other. He [or she] tries to create for everybody interest and challenge and joy in work. He tries to optimise the family background, education, skills, hopes and abilities of everyone. This is not ranking of people. It is, instead, recognition of differences between people, and an attempt to put everybody in position for development.”  

  • Ignoring variation: The work of each individual is characterised by variability…it will naturally fluctuate! You cannot be the same every minute of every day….if you were, you would be a machine! Further, the major causes of such variation are beyond the attributes of the individual. So should you be criticised or praised because of ups and downs in your supposed ‘performance’ outside of your control?

I could go on…but I fear that I would write a book!

The performance appraisal creates the illusion that management have indeed isolated and determined the performance of an individual. Worse still, it allows management to abdicate their responsibilities – they will simply meet the person each period, get the person to justify themselves (with evidence!) and then judge them….no need to actually get to understand who they are, what their dreams and aspirations are, and therefore discuss how they can help them become reality.

The effects of performance appraisals

Most organisations running performance appraisal systems will answer back in denial: “yes, we know all about the above and we have ‘continuously improved’ our process through much iteration so there’s no such problems here!”

I would contend that they may have succeeded in creating a (laborious, bureaucratic and wasteful) process that masks (i.e. disregards) the above, but they cannot remove them.

But, for the sake of argument, let’s just suppose they have….what about the effects of the performance appraisal:

[the system by which merit is appraised and rewarded is] “the most powerful inhibitor to quality and productivity in the Western world….it nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry…and leaves people bitter.” (Deming)

“Even if performance appraisals were adequate to gauge how well people were doing their effects are usually so destructive that they shouldn’t be used anyway. Not only is the fact of interdependence in the workplace ignored, but people are discouraged from cooperating in the future.” (Kohn)

“Appraisals leave people bitter, bruised, despondent, dejected, feeling inferior, some severely depressed.” (Seddon)

What do people running performance appraisals say they are for?

Rather than simply looking for a new technique to continue with the old flawed logic, let’s consider why people are being evaluated.

Kohn notes four ‘defences’ as being used by those that contend performance appraisals are required. They say they are needed to:

  1. Determine how much each employee should be paid and/or who should receive various awards and incentives;
  2. Make employees perform better for fear of receiving a negative evaluation or in the hope of getting a positive one;
  3. Sort employees on the basis of how good a job they are doing so we know who to promote; and
  4. Provide feedback, discuss problems, and identify needs in order to help each employee do a better job.

Taking each of these in turn, and using some of my previous posts so that you and I can finish this post today!!…

Regarding 1: Please read the following posts already on the blog that debunk the use of contingent rewards: The Chasm and Money as pay

Regarding 2: Please read Oh no, not that old theory and Making a wrong thing righter that explain why ‘carrot and stick’ approaches to motivation are counter-productive.

Regarding 3: Please read Anointing heroes. Further, there is a whole post to be written on promotion (I’ll add it to my list!). It’s not a good reason to carry out performance appraisals.

Defences 1 – 3 are about doing things to people…which leaves 4 as the only one which could be about working with people….mmm, if we got rid of 1 -3 then this is sounding promising! Read on.

So what should we replace performance appraisals with?

Kohn suggests that, if the over-riding purpose is to foster improvement (for the individual, and for the organisation) then the following principles take shape:

  • A two-way conversation:
    • An opportunity to trade ideas and ask questions;
    • NOT a series of judgements about one person pronounced by another;
  • A continuous process, rather than a time bound event (e.g. annual, quarterly);
  • It never involves any sort of relative ranking or competition (no scoring!);
  • It is utterly divorced from decisions about compensation
    • “Providing feedback that employees can use to do a better job ought never to be confused or combined with controlling them by offering (or withholding) rewards.” (Kohn)
    • It is “foolish to have a manager serving in the self-conflicting role as a counsellor (helping someone improve performance) when, at the same time, he or she is presiding as judge over the same employee’s salary” (Meyer)

Essentially, Kohn is arguing for good old fashioned regular and meaningful conversations between employee and manager within an environment of openness and mutual trust. I’ll have some of that!

Scholtes takes this further: Performance appraisals focus on the wrong target! The true opportunities for improvement are in an organisation’s systems and processes, rather than individuals or groups. Instead of focusing on individuals, managers should be working with individuals to focus on the problems with the system.

It’s worth noting that an organisation taking the above seriously won’t be able to move to this highly desirable state overnight: Once the scoring, ranking, rating and rewarding has been stripped out, it will take a bit of time for managers to establish the trust of their employees.

On the plus side, the vast majority of managers will relish the removal of the hugely wasteful processes and painful conversations of the old way…and will really enjoy spending the newly created time actually helping their team.

What about the advice from all those expensive consultants?

You will find queues of expensive consultants who will tell you otherwise.

Scholtes notes that most ‘research’ on performance appraisals consists of opinion polls asking “which kind of performance appraisal do you prefer?” They are usually:

  • conducted by consulting companies selling their ‘Human Capital’ services;
  • filled out by HR managers who, as a group, are predisposed in favour of performance appraisal…no disrespect meant but it is, after all, a major part of their (current) job; and then
  • sent back out to the same group of HR managers in glossy consultancy report format along with a nicely worded proposal as to how the consultancy can help implement what they now claim to be ‘best practise’ and move them up some supposed ‘maturity curve’!

Scholtes notes “when biased people ask the opinions of biased people, the results cannot be described as research.” This quote is so relevant to many a ‘big consultancy’ report purporting to be ‘research’.

…and finally: what do the Japanese do?

A really nice story from John Seddon:

“I was asked to write an article exposing the problems with performance appraisals for a Sunday newspaper. I submitted my 1st draft.

  • The editor suggested I should provide balance by talking about what to do instead.
  • My response was that you don’t need to find an alternative to doing a bad thing – you should just stop doing it!
  • The editor said ‘ring your friends in Japan and find out what they do’.
  • …so I did.
  • I asked ‘what do you do about performance appraisal?’
  • The reply was ‘what is that?’
  • …I explained.
  • Japanese people tend to be too polite to laugh.”

Oh no, not that old theory!

giantknave Brain Farts , ,

9365403Most of us who have been on some form of management course will likely have heard of ‘Theory X and Theory Y Management’. You may groan and say “oh no, not that old theory…I’ve never used it for anything” or “you’re a bit behind the times…we’ve all moved on since then!”

The more I look back at the early work on management, the more I believe that they contain profound foundations for what has come since. Let me explain.

A short history lesson (taken from Scholtes ‘The Leaders Handbook’ and Handy’s ‘Understanding Organisations’):

  • Douglas McGregor’s father and grandfather were ministers;
  • His grandfather founded a homeless shelter in Detroit during the 1930s depression;
  • A young Douglas worked in the shelter alongside his father and grandfather.

Douglas and his father held very different views on the people they assisted, something that they would argue about.

  • His father held negative views towards the unemployed and homeless, considering them shifty and lazy etc;
  • Conversely, Douglas considered the poor to be no different from others, just that they were simply down on their luck and victims of a terrible economic situation.

As Douglas grew older, his thinking evolved into his famous 1960s articulation of Theory X and Theory Y assumptions about workers.

Theory X:

  1. The average human being has a natural dislike of work, and will work as little as possible;
  2. He/she lacks ambition, wishes to avoid responsibility and prefers to be led;
  3. He/she is by nature resistant to change but is gullible and not very bright;

Because of these characteristics, most people must be coerced, controlled, directed or threatened so as to modify their behaviours to fit the needs of the organisation.

The above might be said to require a ‘command and control’ style of management.

Theory Y:

  1. The expenditure of physical and mental effort in work is as natural as play or rest;
  2. People will exercise self-direction and self-control in the service of objectives to which they are committed;
  3. The motivation, potential for development, capacity to assume responsibility, and readiness to direct behaviour towards organisational goals, are all present in people;
  4. The capacity to exercise a relatively high degree of imagination, ingenuity and creativity towards organisational problems is widely, not narrowly, distributed in the population.

It is the responsibility of management to arrange the conditions and methods of operation so that people can achieve their own goals best by directing their own efforts in alignment with the purpose of the organisation.

The above matches the teachings of W Edwards Deming and what has been labelled a ‘Systems Thinking’ management system.

The point: McGregor was NOT writing about two different types of people. His theory was about two sets of assumptions made about people.

We can see that this will be a self-fulfilling prophecy. If management apply Theory X assumptions to their people (commanding and controlling them), then they can expect to see Theory X behaviours in return. This is cause and effect.

People are not, by nature, passive or resistant to working towards the organisation’s purpose. They have become so as a result of the management system that they experience.

Conversely, if management provides an environment that allows systems thinking, collaboration, interesting work content and choice through self direction, then we can expect Theory Y assumptions to become a reality.

A clarification: Theory Y still requires a clear sense of organisational direction (purpose) and systemic structure (though not necessarily hierarchical).

As an aside:

  • I always see a flaw in Theory X assumptions. It requires manager and worker to be two different sub-species of human beings. Otherwise the theory is disproved by contradiction – if, for example, people don’t like responsibility but managers do, then they can’t be the same human variety!;
  • Conversely, I see that Theory Y fits with one human genus. It works no matter where you are positioned within an organisation’s system.

Actions speak louder than words: Now, you will likely say “…but leaders always talk about their ‘Theory Y’ assumptions”….and, yes, I realise that this is so…this is what they (rightly) think the people want to hear.

But are their actions the opposite? What about the management instruments of cascaded personal objectives, arbitrary numeric targets , contingent rewards , and the rating and ranking of people’s ‘performance’.

A subtle, yet massive implication: If leaders use carrots and/or sticks then they are subscribing to Theory X assumptions about their people….otherwise carrots and sticks would make no sense.

A thought-provoking quote from Scholtes:

“Behind incentive programs lies management’s patronising and cynical set of assumptions about workers….Managers imply that their workers are withholding a certain amount of effort, waiting for it to be bribed out of them.”