LEADING THOUGHTS

Leaders who excel over time utilize organizational networks in distinctive ways to compensate for weaknesses in formal structures, says Rob Cross (U of Virginia) and colleagues who have conducted network analyses at more than 100 organizations.

In Organizational Dynamics, Cross et al map out five principles that drive productive organizational networks.

1. Manage the centre
Cross finds that 3 to 5 percent of people in a network account for 20 to 35 percent of the “value-added ties” – collaborations that generate sales, efficiency gains, or key innovations. But these hubsters are often not managed or leveraged intelligently. The lesson for leaders: locate employees at the centre of networks and manage them well.

Specifically look for bottlenecks and hidden stars. For bottlenecks, figure out if they are central because of their position on the org chart or because of their expertise and leadership qualities. If they are central because of their roles, shift decision rights or responsibilities to others. If they are experts or born leaders, identify the strengths that the network is seeking from them and build these capabilities in others.

And hidden stars? “We have found that there is only a 25 to 40 percent overlap between the individuals classified as ‘top talent’ by the organization and those who are revealed in a network analysis to be critical enablers of others.” The researchers suggest acknowledging the contributions of hidden stars with promotions or increased pay.

2. Leverage the periphery
For maximum benefit, focus on two outlier groups: newcomers and high performers who have drifted. For new hires, create initial assignments and encourage behaviors that integrate people into existing networks rapidly. For underutilized high-performers, re-engagement has to be done on a case-by-case basis. “Roughly 30 percent of the employees considered as top talent – those on high performer lists or in the top 20 percent performance category – have migrated to the fringe of the network.”

3. Selectively bridge collaborative silos
The strength of the network idea at a unit level, writes Cross and colleagues, “is that it allows us to see more precisely how to connect not everybody – but only the four, five, or six junctures that can allow the organization to differentiate itself strategically.” To bridge the “white space” created by divisional boundaries, geography, or hierarchies, a network analysis can be commissioned to show unit heads how they are connected across regional and product groups.

4. Develop the ability to surge
Cross says “surging” happens when networks sense opportunities or problems in one pocket of a network and rapidly tap into the expertise of others in the network to coordinate an effective response. Cross: “As new opportunities arise, employees need to know who has relevant expertise that can be helpful; they need to have a sense of who knows what in the network.”

5. Minimize insularity
Effective networks do not stop at “city limits” but extend out to clients and sources of expertise. For example in professional services, Cross writes, understanding touch points with key customers is a critical network view.

How Effective Leaders Drive Results Through Networks, by Rob Cross, Amanda Cowen, Lisa Vertucci, and Robert J. Thomas; Organizational Dynamics, Vol. 38, No. 2, pp. 93–105, 2009

Email me for a copy of this paper: Alan [at] AlanMorantz.com

photo credit: edmittance

In this video interview with The McKinsey Quarterly (biz journal of McKinsey & Company), Stanford U Professor Robert Sutton talks about how, in tough economic times, leaders/supervisors experience the “toxic tandem.” On the one hand, people in power tend to be oblivious to the needs and actions of people with less power. On the other, subordinates are hyper vigilant; they closely watch the boss for cues and clues as to what is really going down (“Am I next on the chopping block?”).

I presented the ideas to a group of executives. And this guy walks up to me and he starts describing his executive vice president and how one of the secretaries walked up to him and said, “When are the layoffs going be?” And he says, “What?” And then she went to explain. She said, “Well, it’s an ‘interesting shoes’ day for you.”

What this guy has a reputation of doing is he can’t look people in the eye when he’s upset about stuff, so he would always be looking at his shoes. They were saying, “The boss is having ‘interesting shoes’ day.” So from just the fact the guy walked around not looking anybody in the eye, she went straight up to him. So that to me is a pretty good sign he was oblivious to that, right?

The antidote for the toxic tandem, says Sutton, is prediction, understanding, control, and compassion. “Prediction”: Give assurance where you can and don’t overpromise. “Understand”: Make the effort to clearly communicate  the situation in ways that people will understand. “Control”: Give people a measure of control over the way layoffs happen. And “compassion”?: Have a heart, buddy.

As for dealing with the psyche of those who survive layoffs, Sutton says the key is fairness. “When they see that it’s fair,,” he says, “they are more likely to stay loyal, suffer less psychological damage, and also feel more guilty and work even harder to help you.”

Link to Bob Sutton’s excellent blog

A good argument can be made that the key reason a new initiative fails is employees’ perception that their organization is not ready for change. If that’s the case, what can change agents do to get employees to believe that the organization is indeed primed and ready? Researchers Inta Cinite and Linda Duxbury (Carleton U) and Chris Higgins (U of Western Ontario) developed an empirically-tested diagnostic to do just that.

As a basis, the researchers started with the concept of PORC, “perceived organizational readiness for change.” Developed back in the 1970s, PORC defines employees’ belief that the organization not only can initiate change but also engages in practices that will lead to successful implementation. They then developed a way to measure PORC in public sector organizations, based on research from five organizations that had initiated transformational change. Projects included a shift in the strategic direction toward a higher degree of transparency, a shift from a command and control management style to one that was based on employee empowerment, a change in reporting relationships, and two organizational restructuring efforts.

This is what they came up with:

“Organizations that want to be perceived by their employees to be ready for change should pay close attention to the behaviours of their leaders, change agents, immediate supervisors at all levels, organizational practices around the change, and how these practices impact people’s daily work.” The researchers suggest that managers who have direct reports should be well equipped to communicate change to their staff and provide the necessary support.

“Organizations are judged to be not ready for change due to poor communication practices when employees perceive that the outcomes, benefits and reasons for the change are not well explained and when employees do not understand the vision behind the change.”

Employees’ perceptions are also informed by the impact the change is thought to have on
their work. They will remain skeptical of change if: old duties are not phased out when new ones are assigned; they are discouraged from saying ‘no’ to work; and they are assigned heavy workloads that hinder them from getting involved in the change initiative.

Measurement of Perceived Organizational Readiness for Change in the Public Sector, by Inta Cinite, Linda E. Duxbury, and Chris Higgins; British Journal of Management, Vol. 20, 265–277 (2009)

Email me for a copy of this paper: Alan [at] AlanMorantz.com

photo credit: Auntie P

I was just rereading an interview that the Gallup Management Journal conducted with behavioural economist Alan Krueger, Bendheim Professor of Economics and Public Affairs at Princeton University. Krueger was talking about how the pay structure has to be perceived as fair if an organization wants to get maximum performance out of employees.

GMJ: How fair does it have to be if it’s secret?

Krueger: That’s a good question, and I’ve done a little bit of research on how much employees know about what their fellow workers are paid. I once did a survey with employees at a non-union service company. We asked employees to identify another worker and then tell us how much they thought that other worker was paid. Most of the time, they couldn’t or wouldn’t guess. It’s a taboo subject, and not delving into it may be one way in which employees cope with the sensitivity of the issue. By the way, this was a fairly enlightened, progressive company. I think one way in which workers find it easier to work with each other is not to even speculate on those subjects.

GMJ: So do issues of pay hold the same power in companies where people do know how much everyone else is making, such as union shops?

Krueger: I suspect that morale suffers. I think there are probably reasons why the social norms developed that discourage employees from discussing pay and employers from bringing it up. But I think employees do want their pay structure to be perceived as fair in case information leaks out. It is also interesting to note that unionized workers report being less satisfied with their jobs despite their higher pay, on average.

Music provides an intriguing window on the world of work, says law professor Rafael Gely (U of Missouri).

“Throughout the centuries people have used songs while engaging in working activities,” Gely writes in The International Journal of Comparative Labour Law and Industrial Relations. “Workers have used songs as a form of entertainment, as a way to tell stories, as a means to achieve solidarity and as an avenue of voicing their concerns.”

During the pre-industrial era, when labourers had a high degree of control over work processes, songs were used by weavers, domestics, and sailors to set and respond to the pace of work.

During the Industrial Revolution, workers lost autonomy to machines, and machines then dictated the rhythm of the work day. Management theory also evolved to view music as a leisure activity that had no place on the factory floor.

Over time, management tried to use music to boost efficiency, while for workers songs became tools for class struggle. “Songs became a mechanism to voice the workers’ grievances,” Gely writes, “and also a mechanism to transmit the struggle of workers and develop class solidarity.”

Winnsboro Cotton Mills Blues

Old man Sargent, sitting at the desk
The damned old fool won’t give us no rest,
He’d take the nickels off a dead man’s eyes
To buy a Coca-Cola and an eskimo pie.

In the post-industrial era, iPods and other music-listening devices allow workers to regain a measure of control over their workspace. But managers are still using mood music to structure behaviour for both employees and customers.

Gely offers a host of research questions that he says are worth pursuing. To wit:

• How common is it for employers to allow the use of music in the workplace?
• Do policies regarding the use of music vary by industry?
• In the context of unionized workplaces, have labour organizations negotiated over the use of music?
• Are there cultural differences in the way workers interact with music?
• Are there demographic differences in the use of music at work?

Workplace Songs: Developing a Framework for Research and Teaching, by Rafael Gely; The International Journal of Comparative Labour Law and Industrial Relations 25, no. 1 (2009): 49-58

Email me for a copy of this paper: Alan [at] AlanMorantz.com

photo credit: danceonair1986

As head of the world’s largest confectioner, Cadbury CEO Todd Stitzer has plenty of challenges, not least of which is leading a multinational corporation that retains some of its Quaker culture. In this interview with INSEAD, Stitzer discusses his own leadership journey, managing through a “de-merger” and downsizing, waging a war for talent, and maintaining your sanity.

Go straight to the 4:20 mark, where Stitzer talks about the split between Cadbury and Schweppes.

At 6:38 he explains his messaging to employees going through a major downsizing.

At 8:50 he discusses the still prevalent Quaker culture, and the tension between high performance and social responsibility.

At 10:12 Stitzer reveals the Cadbury approach to talent management. Factoid: over the past five years, about 30 percent of the top 150 employees changed positions.

At the 12:00 mark he discusses the qualities he looks for in a leader: selflessness and high engagement (a willingness to “invest in accomplishment”).

And at 14:15 Stitizer gives his recipe for work-life balance: not playing golf with the boys on Saturday mornings.

Here is a video clip of Hal Varian, Chief Economist at Google, speaking at the Association to Advance Collegiate Schools of Business Deans’ Conference. Skip ahead to the 16:10 mark, where Varian talks about Google’s people management principles.

At 19:27, there is an amusing anecdote about Google CEO Eric Schmidt arriving at his new private office and being met by a squatter who introduced himself as the “Chief Lumber Jack” (the guy in charge of the logs). As it would happen, the two  bunked together in the office for a few months, giving Schmidt a great introduction to the organization.

At 21:20, Varian talks about “OKRs”, Objectives and Key Results, that all Google employees complete to list work plans for the following quarter.

At 27:02, he talks about how business decisions are made either by HiPPOS (“Highly Paid Person’s Opinions” or hard data.

Two thirds of all change programs sputter and fail. Could it be that rational change leaders rely too much on common sense while disregarding the inherent irrationality of their colleagues? Two very rational McKinsey consultants build the case that human nature gets in the way of truly changing behaviour.

Consider the old chestnut of the compelling change story. It is now a given that leaders must communicate a clear story, which usually amounts to a narrative about regaining lost momentum. Aiken and Keller say this may seem like a rational approach, but it does not tap into what motivates most managers and employees.

These are the real drivers: “impact on society (for instance, building the community and stewarding resources), impact on the customer (for example, providing superior service), impact on the company and its shareholders, impact on the working team (for example, creating a caring environment), and impact on “me” personally (my development, paycheck, and bonus).” If a change leader can hit those five buttons, she is off to the races.

The manner in which the change story is told is no less significant. Instead of rolling out town halls and websites, change leaders would do better to help employees learn for themselves what the story needs to be. It may be easier to just lay it all out but employees are much more likely to buy in to the program when they are part of building the story.

Aikens and Keller offer a number of other insights:

• People think that they are better than they are (except me). Change leaders fall into this trap by thinking they themselves do not need to change.
• Do not over-invest in trying to woo the social “influencers”. More important is how receptive the organization is to the idea of change.

The Aikens-Keller article includes advice on how to follow up on skills-building programs with fieldwork assignments, as well as a reading list.

The Irrational Side of Change Management, by Carolyn Aiken and Scott Keller; The McKinsey Quarterly (Number 2, 2009)

Link to the article

photo credit: adinaduke