OB Practices:  Are They FEDUP?

Free food!  Subsidies for buying hybrid cars!  No lay-off policies!  Paternity leaves!  Employee sabbaticals!  No more performance appraisals!  The list of perks, benefits and organizational practices is almost endless, and as many managers know, simply benchmarking or imitating practices or benefits what some of the “great places to work” employers offer is no guarantee that these practices will work for your company.  And by what will work, I mean whether or not they will lead to outcomes that will improve organizational and business performance.

In my OB class recently, one of my students brought up the potential benefits of salary transparency, a practice used by a handful of companies but is certainly not widespread.  There are a few good arguments that can be made for this practice.  After all, publicly traded companies issue annual reports showing the compensation of their most highly paid executives.  You can easily access the average salaries of different professional groups (including professors) in public universities.  In sports, we can quickly find out what the salary is of every professional player, and what their bonuses are.  And, some would argue, taking the mystery and black box out of salaries might help employee morale.

In my view, here are five questions to answer before one should consider implementing a particular organizational practice in an organization.  You can easily remember these questions using the acronym FEDUP.

First is Fit.  How does the practice align with the organization’s strategy and culture?  Zappo’s and Southwest are two companies known for having a “fun” culture.  Tony Hseih, Zappos’s founder, and Herb Kelleher, former Southwest Airlines CEO, deliberately try to create an informal, almost wacky, atmosphere in their companies.   One of Zappo’s core values is “to create fun and a little weirdness.”  Herb Kelleher used to dress outlandishly and encouraged his employees to do the same.  Now imagine implementing these “fun” practices in companies where the culture emphasizes seriousness and even frugality.  Several years ago, a global company that had instituted “casual” Fridays, where employees could dress more informally one day of the week, decided to implement the practice globally.  I was in Tokyo when the employees of its subsidiary received the e-mail memo.  “Salary men” in Japan dress very conservatively, often in dark suits and white shirts.  This is part of their identity and they take pride in being recognized as such.  Dressing informally made no sense to them at all.

Second is Evidence.  What is the evidence that this practice has worked?  Is there a solid theory or framework behind it?  Is it likely to work in different industries?  Is it likely to work in different cultures?  Fads are common in business, and imitating what your competitors are doing is not unusual.  This is no reason to adopt the same practice in your organization.  Even when there is solid research behind a practice (for example, Collins’ concept of Level 5 leadership in his book Good to Great), it does not mean that this should be applied indiscriminately. 

Third is Difficulty of Implementation.  What are the barriers to implementing such a practice?  How difficult (and/or costly) will it be to implement?  Is the timing right for your company?  In Pfeffer’s classic article “Seven Practices of Successful Organizations,” he identifies one such practice as self-managed teams and decentralization of decision making as basic principles of organizational design.  According to him, “organizing people into self-managed teams is a critical component of virtually all high-performance management systems.”   However, the examples he gives include companies that have implemented true self-managed teams (e.g., Whole Foods) as well as companies that have implemented only certain aspects of the self-managed team concept (e.g., Ritz-Carlton).  In fact, there are very few companies that have implemented true self-managed teams, while virtually all corporations today actually have some form of team concept.  Why are self-managed teams not more pervasive in the work place?  For one, it requires a level of maturity and autonomy among team members that may not be there.  Google at one point tried to increase spans of control and remove managerial levels but decided that their work force needed managers – not so much to supervise and oversee but also to coach employees, many of whom are very technical but relatively inexperienced.  Second, when a company goes through a major crisis, as Siemens did a few years ago with its bribery scandal, its new CEO implemented policies and compliance procedures that required employees to adhere to strict ethical policies.  The timing for self-managed teams would not have been appropriate for this company.

Fourth are Unintended Consequences.  Are there things that could go wrong with the practice that you may not have anticipated?  Many years ago, Stephen Kerr wrote an article called “On The Folly of Rewarding A, While Hoping for B.”  The fundamental concepts of that article are still relevant today.  Creating practices that focus primarily on extrinsic rewards (e.g., bonuses, stock options, status in the organization) will tend to attract people who are extrinsically motivated.  These individuals, while they may performing well in the short term to get their rewards, will not likely develop strong loyalty to their organization and will not perform good organizational citizenship behaviors.  They are likely not going to be interested in behaviors that do not lead directly to these extrinsic rewards.  Is this the kind of organization that you want to build?

Fifth is Purpose.  Are you clear on what you are trying to achieve with this practice?  And is the outcome linked to business performance?  A few years ago, I was advising a company on whether it should implement Six Sigma.  Senior executives had heard about its success in GE and other companies, and they believed that it might have some benefit for the organization, which had been experiencing some challenges with customer service.  They were not sure that Six Sigma would work, so they decided to “pilot” it in one department.  Supervisors went through training in statistical quality control, and applied some of the Six Sigma tools.   There was some improvement but it did not last.  For practices like Six Sigma to work, it has to start at the top, and the “philosophy” has to be embraced by senior management.  By viewing Six Sigma as simply a collection of techniques that could be implemented in pieces, this practice never gained traction and was ultimately abandoned.

So should a company consider implementing salary transparency?  Let’s apply the five FEDUP.  First on Fit.  If your company has a culture of openness, where status differences are minimized, and where gaps in salary levels are not outrageously skewed, then this might work.  But I doubt that there are many companies who fit this criterion.  Second on Evidence.  There is surprisingly very little research that has been conducted on the impact of salary transparency, although we can certainly come up with many arguments on both the pros and cons of this.  So let’s pass on the Evidence test since we just don’t have a lot of information either way.  Third on Difficulty. Implementing this practice would require a tremendous investment in time on the part of executives, and extensive communication throughout the organization.  Is the company prepared to do this?  Is the timing right, especially when there might be some inequities that might have to be explained, or at least corrected, before taking this step.  Fourth on Unintended Consequences.  Will revelations of everyone’s salaries create feelings of inequity and unfairness, and is the company prepared to deal with these consequences?  Fifth on Purpose.   So why exactly would a company want to implement this practice?  What does it hope it will accomplish?  Will revealing everyone’s salaries indeed lead to higher morale and productivity?  Given all this, I would submit that salary transparency is not a practice that should be implemented by many corporations today without a lot of careful thought.

Kerr, S.  On the folly of rewarding A, while hoping for B.  (1995).  The Academy of Management Executive, 9(1), 7-14.

Pfeffer, J.  Seven practices of successful organizations (1998).  California Management Review, 40(2), 96-124.

The Influential Global Business Leader

During a workshop that I conducted recently with a corporate client, I met Tom Walker, who had joined the company several months ago after a 20-year career with an agency of the federal government, where he was in charge of a department of 50 people.  In his new company, he also has a big staff, about 30, but with one difference:  his staff does not report directly to him.  Tom is responsible for one of the company’s most important corporate initiatives, and he has been given resources and a sizable budget to move this initiative forward.  However, he (like several of his peers who are also global leaders with their own initiatives to drive) has to manage a team that is spread out globally.

Although Tom is excited about the challenge and the opportunity to make a difference, he is also quite frustrated.  “When I headed my former department, I had 50 people under me who would do whatever I said.  I was their boss.  Here, I am not their boss.  While I am the global leader for this initiative, and these guys have been assigned to my team, they still have a day job and I am not their direct boss.  It’s hard to get things done this way.”

It is obvious that Tom is still adjusting to his transition, and I hope that he will succeed in learning how to lead in this new way.  Tom’s role is not unusual these days, as many organizations are driving new initiatives and innovations with parallel teams while maintaining their core business.  In some cases, they create what Harvard professor John Kotter calls dual operating systems – preserving the traditional hierarchy while building networks and teams.  In other cases, organizations are building matrix-type structures.

What is clear is that more leaders today need to learn how to “influence without authority.”  Authors Cohen and Bradford wrote about this many years ago, and their book is still very helpful.  As I have observed, experienced, and thought about this, here is my advice on what characteristics people like Tom need to build on to improve their influencing skills, especially in the context of a global workplace.  For each of these, I am just scratching the surface on the subject, so consider this as just a starting point.

1.     Legitimacy.  Yes, we no longer should rely only on our title or our place in the organization’s pecking order.  However, people in organizations still want to know the legitimate basis for your authority.  Is the team that you are leading supported by a powerful sponsor?  Is the team’s mission an important one for the organization?  Especially in cultures that respect hierarchy, your influence will be greater if employees see you as having the title and the authority.  You just need to be very careful not to over-rely on formal authority as your basis for influence. 

2.     Reputation.  People in organizations have more respect for those who others perceive as a winner.  Have you been involved in other initiatives or work that has had a positive impact on your department or with other departments?  If you are new in the organization, how many people know about your past experience?  Building your internal reputation will help you to become a more influential leader.   In some organizations, it might be the experience you have had working in the industry, or your academic degrees.  In other organizations, it might be your accomplishments for having worked on some successful projects.  Or your reputation might come indirectly, that is, through your association with a prestigious department or initiative, or with a manager you worked for who himself had a good reputation.

3.     Credibility.  This is related to reputation, but is basically about whether people see that your deeds match your words.  Do you follow through on what you say you will do?  Do you honor your commitments?  It’s not surprising that the more credible a leader is, the more influence he or she is likely to have.

4.     Likability.   There has been a lot of research lately on the importance of being likable.  Or recent Harvard Business Review article emphasized the importance of connecting first, and then leading.  In my discussions with executives, many of them are not convinced that being liked is as important as some other characteristics, and perhaps they are right.  Leadership is not a popularity contest, although it helps if people have a positive emotional connection to you.  Think about executives in your organization who are very competent, but disliked.  Your competence will only take you so far.  Here’s the thing about likability.  It’s not about going to charm school, or being slick.  In fact, it is quite the opposite.  You make yourself more likable if you think more of the other person than yourself, if you show a genuine interest in others and listen well to them.  It is really not about you, but about them.

5.     Communication.  Not just what you communicate, but how well you communicate is important to influencing effectively.  You don’t have to be a charismatic speaker, nor have a dynamic-sounding voice.  You do need to be sure that your content is substantial, and that you master some communication basics.  For example, when speaking to an audience, maintain eye contact, stand erect, and show confidence.  When sending an e-mail, make the subject line interesting and impactful, and keep the e-mail short.  It also helps to know your audience so you can tailor your communication accordingly.  When I used to make presentations to research scientists in a pharmaceutical company, I made sure that my presentations contained lots of data and references. When working with colleagues and customers in different cultures, learning to adjust how you communicate is critically important to business success. 

6.     Alignment.  So this is where you have to figure out how meeting the team’s goals will also help meet the individual’s goals.  This means you have to take the time to know each of your team members better, to find out what they are interested in, and to find ways to align their goals with your team goals.  If you are a leader of a global virtual team, it is especially important to understand team members’ goals and how you can help build alignment.  Chances are, your virtual team member has an office close to her local boss; perhaps, she was even hired by her boss and they have maintained close working relationships over the years.  You will clearly not have a strong initial influence on this virtual team member unless you build trust and alignment.  One of the ways to do this could be through connecting with your virtual team member’s boss.

You don’t need all of these to be an influential leader; however, but their impact tends to be cumulative.  For Tom, some of these are easily achieved than others.  He certainly has legitimacy, for he was brought in by senior management and placed in charge of one of the company’s most important initiatives.  His reputation and credibility are still untested.  Tom comes across as a bit gruff and brusque, giving the impression that he does not care for your opinion, and so his likability quotient may need to improve.  His communication skills are adequate, but a little passion in his style might help.  And Tom needs to spend more time with each of his team members (yes, all 30 of them!), and even with their day-to-day bosses, to be able to help align everyone’s goals with the team goals.

Whether your team reports directly to you in the organization, or they are matrixed to you, I am convinced that building these foundational elements will help you become a more influential global business leader.

Cohen, A. and Bradford, D.  (1989).  Influence Without Authority.  New York:  Wiley.

Cuddy, A. et al.  (July-August, 2013).  Connect, Then Lead.  Harvard Business Review.

Kotter, J.  (2014).  Accelerate.  Boston:  Harvard Business Review Press.

The Impact of Culture on Hard-Wired Behaviors

Anthropologists tell us that our species of humans called Homo Sapiens first surfaced about 200,000 years ago.  And our ancestors survived through certain behaviors that became pretty much hard-wired into their brain circuitry.   When agriculture was invented about 10,000 years ago, our ancestors no longer had to move around, live in small groups, and live a hand-to-mouth existence. 

However, according to Nigel Nicholson (1998), all the environmental changes we have experienced since that time have not stimulated further human evolution.  Evolutionary psychologists believe that 10,000 years is simply not enough time for significant genetic modifications to take place across populations.

“ … there is a limit to how much the human mind can be remolded.  Proponents of evolutional psychology assert that, because of natural selection, human beings living and working in today’s modern civilization retain the hardwired mentality – that is, the needs, drives, and biases – of Stone Age hunter-gatherers.”

So what are some of the behaviors which Nicholson believes are hard-wired?  They include the following:

1.     Relying on emotion or instinct as the first screen for all information received.  Stone Age people tended to rely on instinct so they could react quickly to predators or strangers outside their circle.

2.     Feeling more self-confident than reality justifies.  Those who survived the brutal conditions of the Stone Age had to project confidence so they could attract friends and mates. 

3.     Quickly classifying people, situations and experiences into categories (e.g., good or bad, in our out) rather than engaging in time-consuming and nuanced analysis.  Without relying on “big data” or complex analyses, our ancestors had to make decisions quickly, whether they were about people to befriend or about the types of food that would not be poisonous.

4.     Participating in public competitions for status and chest thumping about their successes.  Winning in contests and battles, as well as showing off through elaborate rituals and artistic displays, were important to impress others and to boost their status – making them more attractive to potential mates.

5.     Empathy and mind reading.  Our ancestors were not all about crushing their foes.  To survive, they also needed to anticipate shifts in status and build alliances.  They needed to share food, barter and trade, and those who learned how to be friendly and guess what others were thinking tended to be more successful. 

Sound familiar?  We haven’t changed that much, it seems.  I generally agree with Nicholson, and certainly the evidence he and others provide is quite strong.  However, here is what is interesting:  different cultures seem to encourage or discourage these behaviors based on their cultural values.  So while there may be some universal truths to these behaviors, we are malleable enough that culture may trump some of these so-called hard-wired behaviors.

Let’s examine how each of these hard-wired behaviors can be seen through the filters of some cultural values, focusing especially on workplace behaviors.  In my experience, organizations across the world vary in the importance and emphasis they place on different organizational and management practices, in part as a function of their cultural values.   And some preferred practices (and their underlying values) may clash with some of these hard-wired behaviors.

Relying on emotion.  Many organizations like to pride themselves as being data-driven, and push for decisions that are based primarily on facts and air-tight logical reasoning.   On the surface, this might seem to contradict those hard-wired behaviors that rely on instinct.   Yet we know that, like our ancestors, emotion plays a large part in our decision-making.  So organizations with practices that place a high premium on rationality and logic (e.g., through the use of quantitative tools and a preponderance of data to drive decisions) may sometimes find them difficult to implement. Not only are we hard-wired to use emotion, but there are cultures where freedom of expression and spontaneity are encouraged (what Hofstede calls “high indulgence”).  On the other hand, even societies where emotional expressions are not encouraged will have citizens who will from time to time find ways to express their emotions.  Several years ago, the organization I was working for decided to assign a very competent and passionate leader from a Latin American country to become the general manager of its failing German subsidiary.  He was just what the German employees needed; he energized the organization, excited the employees in that subsidiary; in two years he had turned the subsidiary around to profitability.

Feeling self-confident.  I am sure that we are all familiar with cultures where this kind of behavior is encouraged.  In fact, in countries like the U.S. and Great Britain, pointing out your accomplishments, doing a bit of self-promoting, and making sure that colleagues and bosses know about what you have done are in general acceptable behaviors (as long as they are not done excessively).  In other cultures, individuals may let their accomplishments speak for themselves because of the cultural norms around humility.  Ken Watanabe, a very well-respected Japanese manager in a Tokyo-based financial services organization, is looked up to by all his colleagues.  He has a quiet and calm style, is always prepared, and has developed a reputation for his research reports on the industry he is focusing on.  Yet he is very self-effacing, and to a Western manager, may seem to constantly be diminishing his accomplishments constantly.  In some ways, this behavior reminds me of the profile of what Daniel Zweig (Harvard Business Review, May 2014) calls the “invisibles” in an organization, those who do not toot their own horn but are at the top of their game and are very valuable to an organization.

Classifying people into categories rapidly.  We will tend to do this, don’t we?  What I have observed is that different cultures make judgments about people based upon a narrow or wide scope.  In some cultures, we look at someone’s face, perhaps their attire and their bearing and the way they speak, and quickly classify them accordingly.  People from other cultures may cast a wider net in classifying people.   They may also consider a person’s family background, social status, and the way they follow the unwritten rules and the cultural code.   For example, George Freidrich, an Austrian manager just recently back from Buenos Aries on a two-year assignment, made sure that while in that country, he was careful about his attire, his body language, the way he addressed people at different levels in the organization, and his deference to women.  He knew that the Argentinians would be looking at all these cues in reaching conclusions about him.

Engaging in competitive behavior.  Our capitalistic culture is based on the value and benefits of competition, and most organizations encourage some form of competitive behavior – whether it is through beating the competition, or competing for scarce resources within the organization.  Yet in some cultures, such competitive behavior is downplayed; Hofstede refers to these cultures as more feminine, in that they place less emphasis on power, wealth, assertiveness and “living to work.”  It’s not that these cultures (which include Denmark and Norway) are not competitive; the competitive drive may still be there, but it is within the larger context of a culture that values family time, relationships, and “work to live.”

Empathy and mind reading.  While Daniel Goleman popularized the term emotional intelligence, it seems that even with our ancestors, having this characteristic enhanced one’s chances of survival and success.  I definitely think that cultures that are more high context (Edward Hall’s term) develop people who are good at “reading between the lines,” and who can communicate in different ways without offending others.  These cultures have code words that people in that culture understand.  For example, in Japan, a statement like “that might be difficult” really means “I don’t agree with you.”  Similarly, in China, a statement like “it’s not convenient” really means, “I don’t want to do it.” 

As a leader managing individuals and teams across cultures, there are two implications for you.  First, be aware that these hard-wired behaviors are part of what makes us “human” and it will be impossible to completely eliminate these behaviors in the work place. Through organization design and the reinforcement of specific management practices, we might be able to curb some of these behaviors but they will always be present.  For example, many organizations have implemented hiring and promotional practices that emphasize merit and results rather than relying on the initial impressions or judgments that people might have. 

Second, recognize that a society may differ in how the workers in that society express behaviors associated with these hard-wired behaviors.  Understanding the cultural code and the hidden cues will help you better manage and motivate individuals in different cultures. 

Goleman, D.  (2005).  Emotional Intelligence.  New York:  Bantam Books.

Hall, E.  (2013, reissued).  The Silent Language.  New York:  Anchor Books.

Hofstede, G.  (2001).  Culture’s Consequences.  New York:  Sage Publications.

Nicholson, N.   (July-August, 1998).  How Hard-Wired Is Human Behavior?  Harvard Business Review.

Zweig, D.  (May, 2014).  Managing the Invisibles.  Harvard Business Review.