Market-Based Management®

Courage in the Workplace

Lately, I've been reflecting on what MBM directs individuals to do. Reading (and re-reading) the Guiding Principles as well as studying the bottom layer of the Science of Human Action chart (see pages 48-49 of The Science of Success if you'd like to study it along with me) have been my main strategies for trying to understand how individuals can practice MBM. However, reading all of those things right in a row left me feeling a bit overwhelmed and reminded me of when I first started working at the Foundation.

Those feelings led me back to another topic I've been thinking a lot about lately: courage. Recently, I've come to believe that courage has an important role in the workplace, especially in an MBM organization. New employees, often overwhelmed with new mental models, especially need courage. I started bouncing this idea off of my husband and he asked, "what do you mean by courage in the workplace?"

Peter Senge says in The Fifth Discipline, "Courage is simply doing whatever is needed in pursuit of the vision" (page 208). This article (which is fascinating) says, "the ability to act on a perceived good for the organization, even in the face of fear or reprisal." I must admit that I don't have a good personal definition of courage, but I am starting to think about it more and more.

After all this churning on courage, I've started to organize my thoughts around two things:

1. An MBM culture calls on us to embrace the challenge process. The challenge process takes courage: the courage to question a supervisor, the courage to admit that something might be failing and sometimes the courage to just speak up as a single voice in a crowd.
2. Once we've worked someplace for awhile, we can forget how scary some of these things might seem to new people. Moreover, individuals may find different situations require more or less courage.

So, after all this thinking about courage, I've concluded that part of my job as a supervisor and contributor to culture means finding ways to help people be more courageous. What do you think about courage in the workplace? Have you found ways to help people around you be courageous? Am I on the right track here?

Reader Question

KAP Alum, Ben Stafford, sent in this email:

I recently read an article by Collins called "Building your company's vision" and attached is a cheat sheet I wrote based on the essay.  My question after reading this is where do Koch's 10 guiding principles fit in? 

It would seem they are the "Core Values" he talks about it.  But Collins stresses that there should only be only 3-4 core values and companies that had more than five never made the good to great cut, not because that was a qualifier but just by correlation.  So according to him the meaning we can gather from that is we should just pick a few that are core and focus on those.

How does that work at KII / CGKCF?  Do  people really truly focus on all ten all the time or does there naturally end up being 3 or 4 that get more attention?  Does relentlessly trying to balance all 10 perhaps hamper value creation? 

I can only speak for my personal experience, which I've found to be true with both the Guiding Principles and learning the mental models. Some aspects of MBM come more naturally for me than others, and I personally can only give focused attention to only a couple of things at a time to get sustained change.  In theory, once these few things sink in, I can focus my attention on the next step. That's just from one individual's perspective.

Also, I have read articles that claim Koch "over-trains" its people and spends too much time focusing on these "soft" things. So, maybe since Collins is left with just public companies, he isn't picking up on something in which private companies have an advantage: long-term thinking. My view is that with the long-run view, 10 Principles can be balanced (even if it comes in fits and waves) because people have time to learn, grow and internalize over the long haul.

What do you readers think? How would you answer Ben's email?

The Road to Serfdom

F. A. Hayek's Road to Serfdom has been getting some serious attention in the media lately. (Here's the cartoon version if you just want a quick overview.) It outlines what I've come to call a "theory of change" for society based on Hayek's experience.

Recently, I led a reading discussion with the Associates about The Road to Serfdom (and a couple of other works), and I asked them to think about what lessons managers could learn from Hayek's work. Using the panels of the cartoon for reference, here are a few bullet points of what they came up with:

• Small steps can result in large changes over time. Pay attention to the little changes in organizational culture.
• In panels 1 and 2, a war results in centralization of power that stays even after the war. For an organization, a crisis can result in any number of quick changes that may or may not be optimal in the long run.
• Panels 3-7 could have a decision rights lesson. Authority through consensus doesn't always work in an organization.
• Panels 10-13 led us to a conversation about cults of personality and the implications a strong single decision maker.

While we didn't talk explicitly about panels 14-18, flipping through them this time made me think about how miserable I would be in a place that planned every second of my working day. An appropriate translation into the organization might be that entrepreneurial people go elsewhere as their days turn mindless and boring.

If you've not read The Road to Serfdom, I highly recommend it. Do you think there are other lessons we can draw from this? Do you agree with Hayek's theory of change presented in The Road to Serfdom? Do you think I'm trying too hard to draw lessons into the organization from it?

Cultural Tales

One of my favorite economists of all time, Bruce Yandle, gives a great lecture about achievement, based off of the work of psychologist David McClelland's Achieving Society. For me, the punchline is that cultures that tell stories and have traditions celebrating achievement, tend to have those values transmitted to younger generations and perpetuated. Yandle uses The Little Engine that Could as the example for America culture.

One day, as I was thinking about this, Ben Pratt commented that most people agree with the Guiding Principles after reading through them the first time. This made me wonder if there are generally known tales that transmit these principles through American culture. So, here's my best shot at making the connection.

1. Integrity: The boy who cried wolf did not demonstrate integrity and ended up paying for it in the end. Pinocchio also came to mind.
2. Compliance: I had trouble thinking of one for compliance. I wanted a story about complying with the law, not with a parent figure or something like that.
3. Value Creation: King Midas did not focus on what was of real value to him and lost what was most valuable to him in the end.
4. Principled Entrepreneurship: George Washington and the cherry tree is all about accountability. The Goose that Laid the Golden Egg warns what can happen when we don't think through a situation.This Guiding Principle has so many aspects to it, I could probably spend hours finding ways to tie all the pieces to stories.
5. Customer Focus: In Beauty and Beast, Belle has to understand the beast in order to uncover the reality of the situation.
6. Change: The Ugly duckling is all about a radical shift in understanding where one fits in the world.
7. Knowledge: Rumpelstiltskin is all about finding the right knowledge.  
8. Humility: The emperor has no clothes shows us an emperor who has lost touch with reality.
9. Respect: Cinderella has many variations, but often the story is a warning to treat others well.
10. Fulfillment: The Little Engine that Could shows us a little engine that works hard and reaches his potential.

I know this might seem silly to some of you, but I do think the Guiding Principles are grounded in long-known wisdom. In general, I think parents want to transmit wisdom to their children, so we see that wisdom embedded in stories.

What do you think of my parallels? This was just a first take and are meant to be fun. I hope this lightened up your day.

Swearing at Work

I've worked in places where swearing was regular, even expected. I've worked in places where it was explicitly against the rules. Since I've been thinking about management, I've been wondering about the effects of swearing. What does it say about a workplace culture? Even if no one is offended by it, does it have a place?

Starting with this post by Bob Sutton, I followed a series of links on the topic of swearing in the workplace. This HBR article talks about leaders swearing. This study found "positive effects" of swearing. There are lots of articles that about how swearing "boosts morale." And of course, there are lots of opinion pieces, like this one, about "swearers" at work.

I don't know the "right" or "best" answer here. Maybe it's an "it depends" situation? I do want to point out that MBM calls on us to take a long-term view, which is something the articles I looked through weren't really explicitly considering. Many of the studies talked about "stress release" in the moment or fitting in with the workplace culture and such. What if using a swear word shocks people in the moment to be more productive, but sends out tiny cultural waves? What's the tradeoff?

Bob Sutton's article talks about how swearing levels might be different in closed team meetings versus public venues. The idea of split norms bugs me a bit. I've been in a closed meeting where a leader has said something a bit disparaging when referring to another that s/he would never say in public. This made me wonder what that leader was saying about me when I wasn't in the room. It also made me wonder if the public face of the leader was genuine; it literally devalued the praise of that leader in my eyes.

In short, I don't know what level of swearing is optimal in the long term. I do know words matter and contribute to culture, and the Guiding Principle of Respect calls on us to be sensitive and encourage team work. After haplessly typing on this subject for 30 minutes, I think would recommend being conservative in your language, especially as a leader. You never know who is listening and what messages you are sending.

Leave a comment about how you feel about swearing in the workplace. How does it contribute to culture? What are the long term consequences of swearing? Am I being stodgy?

Personality Conflicts

I once had an Associate ask me what MBM brought to the table when it comes to personality conflicts or dysfunctional relationships. He asked because he had a personality conflict at work that seemed insurmountable. I responded by pointing to the Guiding Principles and tried to make the point that if folks act in accordance with the Guiding Principles, personality conflicts could probably be worked through.

Of course, the Associate did not like this admittedly unsatisfying response. I didn't mean it this way, but he basically heard me say that personality conflicts don't exist where the Guiding Principles are upheld. What I meant was that people can work together without personally liking each other.

What do you think a more satisfying response to this question might be? How should I handle this question when it comes up in the future? Moreover, does MBM have a stance on personality conflicts?

Measures?

Lately, I've been thinking a lot about measures. I wanted to bring you a brilliant video about measures that would blow your mind. However, when I went to search "measurement" in the usual places, curiously, this video came in on the top nine:

What's interesting is that I think he does hit on some interesting measures. If you were to print out your calendar for the last three months and count the scheduled hours you spent working on projects, do you think it would reflect your stated priorities? It makes me wonder about symbols. What symbols do I have around the office? What are some other ways we could measure culture?

If you want to see more of this talk, click here.

Grounded in Reality

Today I re-watched the movie "Enron: The Smartest Guys in the Room." The Associates watch this movie during the first couple of weeks of KAP, and this year I'll be leading the session. We use the movie as an example of a decline in a company and pair it with Hayek's Road to Serfdom, which shows the decline of a society.

This is probably the fifth time I've seen this movie, and I found myself thinking a few things throughout the movie:

• "Egos" and "greed" aside, the lack of grounding in reality was rampant.
• Don't confuse value creation with profit.
• The movie claims that Jeff Skilling was an advocate of free markets and tried to foster free-market thinking in his firm. However, the Enron culture blatantly ignored how freedom of speech and standards (among other things) translate into the firm. I hope my family doesn't watch this film and think that I believe he was a free-market kindred spirit.
• With the rise of wide-spread internet use and decreasing costs in communication, could such a spectacular fall happen again? Would employees out their employers?
• Moreover, where were the whistle blowers? Was everyone top to bottom okay with the behavior or were people just leaving?
• I don't think we'll ever really know everything that went on there.

I'm looking forward to hearing what the Associates have to think about the movie. They always seem to surprise me with interesting questions that I can't answer (those are the best kind of questions). 

If you've seen the film, what did you think about it? What questions would you ask to people who are new to Market-Based Management?  

Reviews

Bob Sutton's recent blog post about reviews got me thinking about reviews. Everyone seems to have a take on reviews. Some of us hate reviews. Some of us view them as a necessary tool for growth. I don't know if anyone actually loves reviews? 

At any rate, I ended up talking with my colleague Mandy about reviews, and the conversation took an interesting turn. We ended up talking about how much we've learned from giving reviews. Most of the research and conversation focuses on the people being reviewed, but I had not thought about how putting together and delivering a review is a learning process. Since I'm pressed for time, I need some more time to think through this and put together a more coherent post about that process. 

One topic that often comes up around the time Associates get their reviews is how reviews contribute to culture. Often, there is at least one Associate who claims that confidential feedback for reviews gives folks incentive to not give each other open and honest feedback throughout the year. My response to this is to point out that reviews shouldn't contain surprises. They are a way to see the feedback you've gotten throughout the year in one place and talk about how feedback relates to the Guiding Principles.

What do you think of my response? Most people don't find it very satisfying. How do you see the review process contributing to culture? 

Customer Focus

While a graduate student, I didn't think too hard about customers. As an economist, I believed the market worked and the customers were just one side of that. They were the people who bought stuff from producers. It was a naive (and not very useful) view of the world. 

Since I've been working at the Foundation, I've been fascinated how nuanced and profound the idea of a customer can be. I would find myself in reading discussions with Associates where they were wrestling with the question of who their customers are. There's always a sense that donors are customers, but there's also discomfort with that as well. I did not have a good answer for them. 

Then, one day a wise man named Paul heard a few of us talking about customers in a non-profit world. He looked a little stunned, and then said, "Read the Principle. Really read it." 

Here's the Foundation's Guiding Principle of Customer Focus: Understand and develop relationships with those who can most effectively advance the Science of Liberty^TM.

It was at that point that my mental model of a customer changed. I'd spent months as a new employee in a non-profit searching for an end user. Meanwhile, my customers were all around me, and I didn't realize it. 

I'm always looking for ways that I can help others learn and internalize the Guiding Principles. Has "really reading" a Guiding Principle helped you? What have you done to help internalize the Guiding Principles?