Re-humanizing Management: Q+A with Dr. Gary Hamel (Part 3)

February 25, 2016 Sarah Payne

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Are our organizations really inhuman? What will it take to make them more human—more transparent, open, and collaborative?

In this third and final part of our Q&A series with WorkHuman speaker Gary Hamel, we discuss the annual performance review (or lack thereof), how social recognition impacts culture, and what it means to have a more human workplace.

Gary makes a compelling case as to why recognition is so motivating and why our inhuman organizations need to change—and fast.

Read the last part of our Q&A below.

 

  1. A lot of companies today are moving away from the annual performance review. Can you share your thoughts on this and how you see performance management evolving?

I think this move is healthy. The traditional performance review was more of a ritual than a genuine opportunity for personal development. It created a lot of anxiety, was overly politicized, and wasn’t real-time. Hence, the ratio of value to effort in the process wasn’t very high.

Different companies are approaching this in different ways. Some organizations are opting for a more of dynamic process where every couple of weeks there are feedback sessions between employees and managers. The whole process is much more embedded in the everyday workflow.

Another positive development is that the review process is becoming much more peer-based. What matters isn’t the opinion of one individual—your boss—but of all the people that work with you. Ultimately, I believe compensation decisions need to be peer-based. Pay needs to reflect the collective judgment of your peers about your value to the organization. This approach is already being used in organizations like W.L. Gore and Morning Star.


“The review process is becoming much more peer-based.” @profhamel #workhuman
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Changing the performance review process is a great beginning, but I believe we have to rethink every element of the management model we’ve inherited from the industrial economy.

Most organizations around the world are run in almost an identical way—they are all still bureaucratic at their core. Strategy gets set at the top. Resources are allocated centrally. Individuals compete for the scarce resource of promotion. Managers assign tasks and assesses performance. These are artifacts of a world in which information was scarce, employees were mostly unskilled, and the environment was stable. None of these conditions apply anymore.

In some progressive organizations there has been a complete dismantling of formal hierarchy; there are no titles, no set job descriptions, and virtually no top-down mandates. Control is based on shared norms rather than oversight. People compete to add value not to get a bigger title. Operating units are small and every employee is financially literate. Employees choose their leaders, and can un-choose them. When you look at companies like Nucor in the U.S., Svenska Handelsbanken in Sweden, and Haier in China, you can start to see the outlines of a radical alternative to the industrial-age management model that still typifies most companies.

The big pay-off: organizations that are as capable as the individuals who work within them.

 

  1. What role do you think social recognition can play in transforming workplace culture?

I think it’s huge. All of us work, in part, to be able to put bread on the table and afford the material comforts of life. But beyond that, most of us work for the recognition—I would even say the affection—of the people around us.

If you ask anybody, “When in your life were you most energized, most enthused, and had the most fun?,” they will describe a time when they were part of a small, tightly-knit community of individuals doing something extraordinary and exciting, where there was a high sense of purpose and little in the way of bureaucracy. It might have been a sports team in high school, a volunteer initiative, or a tiger team project at work.

In a community there’s not much in the way of hierarchy. Everyone matters. Everyone can contribute to the full extent of their capabilities. A community is small enough that everyone feels like they matter. You can say to yourself, “My colleagues care that I’m here. They are grateful for the talents I bring. I feel valued, perhaps even indispensable.” This is why our organizations have to become more like communities and less like hierarchies. We don’t do our best for a boss, we do our best for friends and peers.


“We don’t do our best for a boss, we do our best for friends and peers.” @profhamel #workhuman
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I can reflect on my experience as a professor. I shouldn’t admit this, but faculty members don’t pay much attention to the ‘boss’—their dean or department head. But we pay a lot of attention to our students. At the end of every term they rate us and tell us how we’ve one. We also care about our peers. They are the ones who judge the quality of our research. So we work in an environment where all our kudos, all of our emotional strokes come from customers—the students, and from our colleagues. That’s why I set out to be a professor. I wanted to work in that sort of environment. Let’s be clear—it’s not a soft environment. It can actually be quite brutal because it’s often easier to suck up to a boss than it is to win the respect of your colleagues. On the other hand, it’s a lot more meaningful, when a group of people says to you, “That was an inspiring lecture,” or “That was an insightful piece of research.”

One of the most valuable assets for any organization is its relational capital—the strength and quality of relationships that people have with one another. If those relationships are mostly transactional or adversarial, it’s not going to be a very successful organization.

That’s why I think the idea of creating a peer-based ‘currency of recognition’ is such a powerful management breakthrough.


“A peer-based ‘currency of recognition’ is such a powerful management breakthrough.” @profhamel
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  1. In your view, what does it mean to have a more human workplace?

In three very critical ways, our organizations are less human than the people who work inside of them. They are literally inhuman.

First, they are less adaptable than we are as human beings. I’ve often heard it said that “people are against change.” That’s rubbish. If people were against change, we’d still be huddling round a fire in the woods. All of us are novelty acts. We love to read new books, take vacations in new places, learn about new cultural memes, and try out new technologies. Human beings are extraordinarily resilient and adaptable.

Second, our organizations are less creative than we are. As human beings, we were born to create. We can’t help but do it. It may be laying out a garden, re-decorating a house, writing poetry, or improvising a new recipe. We love creating new things, and we’re proud when we do it. It starts with putting your child’s finger paintings on the refrigerator. We celebrate even the most humble acts of creativity. And yet our organizations are mostly inhospitable to those impulses.

Third, most individuals have real passions in their life—for a sports team, their children, a political cause, a social cause. There’s something in their life that has extraordinary meaning for them and for which they sacrifice in ways you wouldn’t expect. And yet our organizations are mostly passion-free zones. They’re banal and profane.

The things that make us most human—our passion, our creativity, our capacity for change—those are exactly the capabilities that our organizations need today.


“The things that make us human…are exactly the capabilities that our org’s need today.” @profhamel
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How is it that collectively we are often less than we are individually? The culprit is bureaucracy. Management as we know it was invented about 150 years ago with the goal of turning human beings into semi-programmable robots. And there’s benefit in doing that. In that model—we need human beings who are diligent, focused, and color inside the lines. If I work on an Intel fab line, there are certain things that have to be done in certain ways. So there’s a tension here.

We need organizations that are disciplined and efficient, but also adaptable and innovative.  This shouldn’t be a trade-off. After all, as human beings we wash the dishes, do the laundry, and take out the garbage—pretty mundane stuff. But we also climb mountains to watch the sun rise, cross oceans to explore different cultures, and take up new hobbies to stretch our minds. Our organizations need to be similarly versatile; and for that to happen, they must become fully human. This is the challenge I’ve been working on, and I’ll be sharing some of what I’ve heard at WorkHuman.


Re-humanizing Management: Q+A w/@profhamel (Part 3) #workhuman
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Did you enjoy our Q&A with Gary? Register for WorkHuman, May 9-11, and hear him speak more on this topic of humanizing management.

 

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