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From disagreement to performance

In the book « Aequacy, the new human-centered organization design to thrive in a complex world », Hugh O’Byrne, former VP Sales at IBM Europe feel concerned about how large companies attract and retain talents, especially young professionals.


« Millenials want to be more engaged but we are still working with a Victorian command & control style. The idea of command & control is losing some relevance and we are not fast enough anyway. We may need to move toward giving people more freedom »

As described in the same book, the economic growth after World War II gave huge powers to companies to expand, internationalize and organize their structures. During the last 30 years, the matrix structure has known an important development and has strongly impacted the way companies share resources, knowledge, skills, responsibilities and money.


In their researches, Giovanna d’Alessio and Stefano Petti acknowledge the same fact and denounce it in strong terms: « Almost all the systems in place in the average organization (KPIs, reporting, assessments, rules, policies and regulations, performance appraisals…) have been put in place for the purpose of controlling employees. The role of manager has been created for this same purpose: to control employees. The basic assumption underlying these forms of control is that employees cannot be trusted and should be closely monitored. Even if not openly stated, this is the message that people get. If a CEO or a management team aspires to develop more trust among their workers, they need to rethink the way the whole company can demonstrate trust in its people ».


In 2012, a study realized by the Gallup Institute on this topic, showed that only 13% of employees feel engaged in their company. The rest of employees feel « not engaged » (63%) or « actively disengaged » (24%). We could expect these numbers to be different nowadays, but unfortunately, the last studies showed exactly the same trends. Indeed, the well-known company Glassdoor reports that only 54% of employees would recommend their company as a place to work. Again, the Dice Tech salary survey results informs us that two-thirds of all workers believe they could find a better job in less than 60 days !

In another survey realized by researchers in collaboration with ResearchNow, the results showed that employees expect real changes on engagement and collaboration in their companies:

  • 52% want to see a company formed by a network of teams collaborating

  • 59% imagine an organization where decisions are decentralized and made at the team level

  • 64% expect that most of the information should be available

  • 77% believe that the idea of « Smart Working » should be possible (e.g: home working)

More importantly, the cost of management (in this case, meaning time dedicated to supervising employees) accounts for 33% of the payroll. The results of such habits obviously are demotivation, disempowerment and disengagement, as seen in another study by Gallup Business Journal, in which it has been observed that only 27% of US employees believe in their organization.

Of course, we could say that these studies are oriented, contain biais or only depict the opinion of employees without taking into account the middle and the top management. That is why many specialists work on the question and started to publish results of their work in the last years.


According to several articles recently published by Harvard Business Review, even top managers are feeling disenchanted in classic structures and especially regarding the « meetingitis »:

  • 65% of Senior Managers said meetings keep them from completing their own work

  • 71% said meetings are unproductive and inefficient

  • 64% said meetings come at the expense of deep thinking

  • 62% said meeting miss opportunities to bring the team closer together

What could companies do to fight these conclusions ? Many institutes, universities and companies worked on the topic and developed new concepts and ideas, sometimes innovative and unfortunately most often not. Indeed, we have seen many fancy initiatives such as Total Quality programs, Six Sigma or Lean principles, flat organizations or new types of structures.

« Change before you have to » Jack Welch

In a study made by Deloitte in 2016 on the new organizations and ways of working, the results showed clear trends:

  • 82% of large companies are either currently reorganizing, plan to reorganize or have recently reorganized to be more responsive to customer needs

  • 92% of companies cite « redesigning the way we work » as the key challenge of the decade

In an interview conducted by Giovanna d’Alessio and Stefano Petti for their book, Philippe Barrois, former CEO of Novartis France said: « Structure is comfortable. You are the boss, you have a team and this is a way to feel protected and be in the comfort zone ». To fight this natural habit, companies often decide to rethink their processes but « sometimes, the more processes you set in place, the less people can understand what they do. Processes can be detrimental, they disempower individuals and thus people check boxes instead of fulfilling the organizational purpose ».


In 1993, Michael Hammer and James Champy already showed the difficulties to implement changes on the long term within an organization. In their book « Reengineering the corporation », they estimated that 50% to 70% of the firms that undertake a reengineering effort do not achieve the targeted results. 7 years later, in the Harvard Business Review, Nitin Nohria ans Michael Beer were even more pessimistic: « the brutal fact is that about 70% of all change initiatives fall ». Finally, as mentioned in « Aequacy, the new human-centered organization design to thrive in a complex world », Mc Kinsey revealed, in 2008 and 2009, two surveys in which only 30% of business executives admitted their change program had been successful and observed two important factors: the employees were resistant to change (39%) and the management didn't support the program (33%).


Thanks to these different researches, we clearly see the difficulties encountered during the implementation of such changes. Despite the huge investments of CEOs in management programs, team building events or agile methodology trainings, companies fail to reach their targets in simplifying their processes, giving more freedom to workers, limiting their control and fully trusting their employees. Thus, we could wonder if the best solution should not be to naturally invest on values, people and collaboration without theorizing and complexing it.


« You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete » Richard Buckminster Fuller

The CEO of Heineken Italy, Soren Hagh, seems on the same page in his interview to Giovanna d’Alessio and Stefano Petti: « People don’t take culture seriously. I think creating a certain culture and values in an organization doesn’t come because you write it or you talk about it with your investors. It comes because you live it every single day, so it starts with a total belief that culture drives the success of the business ».


In a constantly evolving world, with deep behavioral and cultural changes, companies would be negligent to think they don’t need to adapt themselves. Publications and articles on millennials are everywhere and seem to be a hot topic for many people without being really taken into account in the corporate environment. The last generations have been exposed to tremendous changes in less than 30 years: technology, war, political instability, social rules, poverty, economic crisis, internet, terrorism, privacy, etc. Students and young professionals don’t expect managers to be their fathers or mothers. They don’t want to live night and days for their company. They don’t expect information to be kept secret. These classic observations from classic corporate structures obviously create inequality and unfairness, which young generations will simply reject.

New collaborative ways of working have been adopted by companies like Deezer, Google, Twitter or Intel. Their common approach is based on a simple question: « What do we want to achieve? » By asking this question and by only expecting qualitative answers, they create alignment and engagement within the firm.


Others companies, such as Zappos in the US and AION Consulting in Europe, have decided to adopt radical and unconventional ways of working. One has particularly shown its relevance since 2007: the Holacracy. Holacracy is a method created of decentralized management and governance in which responsibilities and decision-making powers are distributed throughout self-organizing teams rather than being vested in a management hierarchy. Thanks to different roles, a distributed authority, rapid iterations and transparent rules, this methodology aims to help individuals to take responsibilities and develop themselves more easily in their structure. In opposition to other self-managed systems or hypes, the idea is not to remove all forms of hierarchy or management, but to give space to individuals and teams to develop and implement their ideas with more flexibility.

New concepts such as Adhocracy or Holacracy are growing in innovative companies and we will hopefully observe more and more initiatives aiming to give more responsibilities to the individuals. But we shall also avoid assumptions and false judgments: there is no proved link between employees engagement and companies performance and we would be injudicious to affirm that investing on well-being at work will have a clear impact on the results of a company.


Nevertheless, some studies showed us that focusing on these questions could be efficient in specific conditions. It was the case of a study made in 2010 on « Organizational Changes and Employees Commitment in Industry » in which similar lean projects were directly defined and implemented by the workers of different organizations (Airbus France and French Ministry of Defense). During those processes, project teams composed of employees of all levels were working together to make decisions.


There were no managers nor leaders, but an interviewer to report the reactions, discussions and decisions within each group. In the end, both projects were successfully implemented (after years of negotiations without success) and interesting survey results were stated:

  • 62% of the employees confirmed to be reluctant to changes before the operations

  • 56% participated in order to improve the collaboration and the atmosphere in the organization

  • 76% were very happy with the changes afterwards

Some years later, these two organizations were still working with this methodology and successfully reached new milestones such as excellence certifications and performance records. Other similar experiments and initiatives have been made and still are strong examples of the benefits of well-being at work. Bill Gore, Founder of W.L Gore&Associates (mostly known under the brand Gore-Tex), was a pioneer when he decided in 1958 to give more freedom to its employees and to promote the natural leaders nominated by the different teams.


As explained by Ethan Bernstein in the Harvard Business Review in 2016, the point is more about finding the right amount of self-management than about completely implementing new structures and as a result, being stuck in another « old-fashioned » way of working:

« Ultimately, and somewhat ironically, the next generation of self-managing teams is demanding a new generation of leaders—senior individuals with the vision to see where it is best to set aside hierarchy for another way of operating, but also with the courage to defend hierarchy where it serves the institution’s fundamental goals. »


« The best way to find out if you can trust somebody is to trust them » Ernest Hemingway

As we have seen it, companies need new organizations, new decision-making processes, new mindsets, new ways of thinking, new terms, and new strategies in order to create a better world. Employees and managers need to be preserved, encouraged, supported and trusted. CEOs and entrepreneurs need to be reassured, open-minded, courageous and inspired. Strong changes are required to reach these targets and modify old behaviors or ways of thinking and nothing tells us that those changes will be enough. Nevertheless, it seems clear that some values can be easily implemented and shared amongst coworkers: integrity, accountability, diligence, perseverance and discipline.


In the Harvard Business Review in 2002, Patrick Lencioni identified the different types of values: core values, aspirational values, permission-to-play values and accidental values. It is the responsibility of any company to clearly identify its core and aspirational values but employees and managers can obviously be part of this process. The question is: will they do it under constraint or will it be a collective initiative ?


Thibaut Griboval

AION Consulting


Credits

Giovanna d’Alessio and Stefano Petti; Aequacy, the new human-centered organization design to thrive in a complex world; 2018

Deloitte; The New Organization: Different by Design; https://www2.deloitte.com/content/dam/Deloitte/na/Documents/human-capital/BCTWF-2016/na_HC_Trends_2016_presentation_BCTWF_Launch.pdf; 2016

Gallup Institute; State of the Global Workplace; https://www.gallup.com/services/177083/state-global-workplace-2011.aspx; 2011

Leslie Perlow, Constance Noonan Hadley, Eunice Eun, for Harvard Business Review; Stop the Meeting Madness; https://hbr.org/2017/07/stop-the-meeting-madness; 2017

Gary Hamel, for Harvard Business Review; First, Let’s Fire All the Managers; https://hbr.org/2011/12/first-lets-fire-all-the-managers; 2011

Nate Dvorak, Bailey Nelson, for Gallup Institute; Few Employees Believe in their Company’s Values; https://news.gallup.com/businessjournal/195491/few-employees-believe-company-values.aspx; 2016

Patrick Lencioni, for Harvard Business Review; Make your values mean something; https://hbr.org/2002/07/make-your-values-mean-something; 2002

Scott Keller, Carolyn Aiken, for Mc Kinsey; The Inconvenient Truth about Change Management; http://www.aascu.org/corporatepartnership/McKinseyReport2.pdf; 2009

McKinsey; Conference Board Report; http://www.narucmeetings.org/Presentations/Efficiency_McKinsey.pdf; 2009

Thibaut Griboval; Organizational Change and Employees Commitment in Industry; 2010

Ethan Bernstein; Beyond the Holacracy Hype; https://hbr.org/2016/07/beyond-the-holacracy-hype;2016

Clémence Boyer; L’entreprise libérée: stade ultime du bonheur au travail?; https://start.lesechos.fr/rejoindre-une-entreprise/actu-recrutement/l-entreprise-liberee-stade-ultime-du-bonheur-au-travail-9167.php; 2017



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