The figure below shows two types of performance evaluation systems; one that measures individual performance and the other which measures team performance.
Even though the figure implies a causal connection between type of measurement system and quality of team output, as usual, I have no idea if a causal relationship exists. I suspect they are statistically correlated though, and the correlation is indeed as shown. I think the system on the left encourages intra-team competition whereas the system on the right catalyzes intra-team cooperation. What do you think?
I really love this elegantly written paragraph by Stewart Brand:
The combination of fast and slow components makes the system resilient, along with the way the differently paced parts affect each other. Fast learns, slow remembers. Fast proposes, slow disposes. Fast is discontinuous, slow is continuous. Fast and small instructs slow and big by accrued innovation and occasional revolution. Slow and big controls small and fast by constraint and constancy. Fast gets all our attention, slow has all the power. All durable dynamic systems have this sort of structure; it is what makes them adaptable and robust. – Clock Of The Long Now – Stewart Brand
If you think about organizations, the people at the bottom of the hierarchy should be the fast components that instruct and inform the slow controlling components at the top, no? However, if those at the top allow, or turn a blind eye to bureaucratic processes and procedures that impede quickness at the bottom, they’re screwing up big time, no? Requiring the builders dwelling in the cellar to jump through multiple, multi-layer review/approval cycles to purchase a 5 dollar part, or go to a conference, or get a custom, but simple, cable built, or add some useful code to a widely used library, can be considered an impediment, no?
Ninety percent of what we call ‘management’ consists of making it difficult for people to get get things done – Peter Drucker
If those at the top of a borg solely concern themselves with “the numbers“, bonuses for themselves, and rubbing elbows with other fellow biggies while the borg’s so-called support groups and middle managers stifle the builders with ever more red tape, then fuggedaboud having any fast components in the house. And if Mr. Brand is right in that resilient, durable, adaptable, learning systems require a mix of fast and slow components, then those at the top deserve the results they get from the unresilient, undurable, unadaptable, and unlearning borg they preside over.
Amazon just sent me a recommendation for this book on the management of complexity:
Since four out of five reviewers gave it 5 stars, I scrolled down to peruse the reviews. As soon as I read the following JAMB review, I knew exactly what the reviewer was talking about. I can’t even begin to count how many boring, disappointing management books I’ve read over the years that fit the description. What I do know is that I don’t want to spend any more money or time on gobbledygook like this.
Over the years, I don’t know how many times I’ve heard smug, self-important consultants and coaches spout things like: “If your org doesn’t do what I say and/or you don’t get what you want, you should just leave“. Of course, like much of what they say is, it is literally true – you can indeed leave. However, here’s an interesting counterpoint:
“To say people have choice when they are in no position to make one is disingenuous.” – John Seddon
Consultants and coaches love to spout platitudes and self-evident truths couched in the fancy “new” language of the latest fad. Amazingly, stating the ridiculously obvious is what they get paid the big bux to do. To these high-horse riders, life for others is always much simpler than it really is. As outsiders looking in, they have what Nassim Taleb calls: “no skin in the game“. The only thing they have to concern themselves about is sucking up enough to the executives who run the show so that they can get hired back after their $2k/day gig is done. And saying the right things, no matter how impractical they are to implement, is the way they do it.
A disgusted reader recently sent me this link regarding yet another textbook example of corpo scam artistry: “Bwin.party proposes new bonus plan for top execs as share price languishes“. Since the board of directors at a borg is usually a hand picked crew of yes-men by the “senior leadership team“, the article headline should probably read: “Bwin.party executives propose new bonus plan for themselves as share price languishes.“
When pay for performance under the current set of “KPI“s (Key Performance Indicators) stops the money from flowing into the pockets of the head shed aristocracy, the answer is always the same no-brainer. Simply get your board-of-derelicts to lower the bar and champion a new set of bogus KPIs to the powerless and fragmented shareholdership. Ka-ching!
With the old bonus benchmarks now akin to launching manned space flights to Alpha Centauri, Bwin.party is proposing a new scheme that more accurately reflects the company’s lowered expectations. Under this plan, CEO Norbert Teufelberger would pick up a maximum bonus of 550% of his annual base salary of £500k, while chief financial officer Martin Weigold would receive 435% of his £446k annual pay packet. – Steven Stradbrooke
When borgs perform brazen acts of inequity like Bwin.party (“party” is literally true for the execs), the rationalizations they spew to the public are mostly hilarious repetitions recycled from the past:
- Bwin.party says the paydays are necessary because the US market is beginning to open up, and the hordes of US gaming companies looking to move online lack senior management with online know-how.
- The potential for US companies to poach senior execs from experienced European companies represents “the single biggest threat to Bwin.party’s ability to retain its senior management.”
- Bwin.party also suggests its top execs deserve danger pay due to “aggressive enforcement of national laws against senior executives within the industry.”
Danger pay? Bwaaahahhah and WTF! That excuse certainly wasn’t dug up from the past. Ya gotta give the clever board-of-derelicts bonus points for such creative genius: “If ya break the law and damage the company, don’t worry. We’ve got ya covered.” Why not go one step further and give Bwin.party’s employees hazard pay for having to work under such a cast of potentially criminal bozeltines?
To determine if executive compensation has any correlation to company performance, BD00 performed 30 seconds worth of intensive research and plotted the results of his arduous effort for your viewing pleasure:
So, whadya think? Is executive compensation tied to performance over the long haul? Regardless of how you answer the question, ya gotta love capitalism because after all is said, it’s the worst “ism” except for all the other “isms“.
According to “No Managers Required: How Zappos Ditched The Old Corporate Structure For Something New”, by the end of 2014, Zappos.com will have dismantled their corpo pyramid. Under the stewardship of maverick CEO Tony Hsieh, the 1500 employee company will be transitioned into a “holacracy” of 400, self-governing circles.
Talk about having huge cajones. Just think of the disruptive risk to business performance of making such a daring structural/operational change to a billion dollar enterprise.
Although I look forward to watching how the transformation plays out, I’m a bit skeptical that Mr. Hsieh can pull it off. After visiting the site of the “consultant” that will be advising the company during the transition (holacracy.org) and browsing through the ungodly long, complicated, formal Holacracy Constitution, the first thought that came to mind was “D’oh!“.
Somewhere on the road from small startup sensation to huge institutional borgdom, the oft-repeated process of “manage-ification by growth” fires up and kicks into high gear. It’s inevitable, or is it?
In the context of complex decisions with uncertain outcomes and no obvious right answer, the managerial mind inevitably longs for some handrails to grasp amid the smoke and flames. Strategic planning offers that consolation— or illusion— of a sure path to the future – Stewart, Matthew
In “The Management Myth“, Matthew Stewart researches how the business of “Business Strategy” got started and how it evolved over the decades. He (dis)credits Igor Ansoff with starting the phantom fad founded on “nonfalsifiable tautologies, generic reminders, and pompous maxims“. Mr. Stewart also credits mainstream strategy guru Michael Porter with growing the beast in the nineties into the mega-business it is today.
Perhaps the most interesting outcome from the rise of the business of strategy was the stratification of “management” into two classes, top management and middle management:
Top management takes responsibility for deciding on the mix of businesses a corporation ought to pursue and for judging the performance of business unit managers. Middle management is said to be responsible for the execution of activities within specific lines of business. This division within management has created a new and problematic social reality. In earlier times, there was one management and there was one labor, and telling the two apart was a fairly simple matter of looking at the clothes they wore. The rise of middle management has resulted in the emergence of a large group of individuals who technically count as managers and sartorially look the part but nonetheless live very far down the elevator shaft from the people who actually have power – Stewart, Matthew
I always wondered how the delineation between “top” and “middle” management came about. Now I know why.
Without a doubt, the most impactful (and depressing) management book I’ve read over the past few decades is Matthew Stewart’s “The Management Myth“. In his unforgettable masterpiece, Mr. Stewart interweaves his personal rise-and-fall story as a highly paid management consultant with the story of the development of management “science” during the 20th century. Both tracts are highly engaging, thought-provoking, and as I said, depressing reads.
At the end of this post, I’m gonna present a passage from Matt’s book that compares the Winslow and Mayo approaches to “scientific” management. But before I do, I feel the need to provide some context on the slots occupied by Winslow and Mayo in the annals of management “science“.
The Taylor Way
Frederick Winslow Taylor is considered by most to be the father of “scientific” management. In his management model, there are two classes of people, the thinkers (managers) and the doers (workers). Thinkers are elites and workers are dumbasses. By increasing piece/hour pay, Taylor’s model can be used to mechanistically increase efficiency, although it doesn’t come for free. Executed “scientifically“, the increase in labor cost is dwarfed by the increase in profits.
The Mayo Way
Elton Mayo, although not nearly as famous as Doug MacGregor (the eloquent theory X and X guy who I liked very much before reading this obscene book), is considered to be one of the top “scientists“, and perhaps creator of, the human relations branch of management (pseudo)science. In Mayo’s management model, there are also two classes of people, the thinkers (managers) and the feelers (workers). Thinkers are also elites, but workers are bundles of emotions. By manipulating emotions, Mayo’s model can be used to “humanely” increase efficiency. But unlike the reviled, inhumane, Taylor model, the efficiency gains from Mayo’s “nice” model are totally free. A double win! Productivity gains in an ethical manner with no additionally incurred financial cost to the dudes in the head shed. Management is happy and the workery is a happy, self-realized community. W00t!
OK, now with the context in place, here’s the passage I promised:
Mayo’s drive for control makes Taylor look like a placard-waving champion of the workingman. The father of scientific management may have referred to his workers as “drays” and “oxen,” but with his incentive-based piece-rate systems he nonetheless took for granted that these beasts of burden had the capacity to make economic decisions for themselves on the basis of their material self-interest. In Mayo’s world, however, the workers of the world lack this basic rational capacity to act in their own self-interest. – Stewart, Matthew (2009-08-10). The Management Myth: Why the Experts Keep Getting it Wrong (p. 135). W. W. Norton & Company. Kindle Edition.
When I first read that passage, it sent an uncomfortable shiver down my spine. Was it as good for you as it was for me?
Shoving all the preceding BD00 drama aside, I’d rather be happy (and duped?) making $XXXX than be miserable making the same amount. I just wish that badass Matt didn’t throw his turd in my damn punchbowl! :)
In case you’ve been wondering why I’ve been relentlessly railing lately against the guild of agile coaches on Twitter, this post exposes my main motivational force. From what I’ve seen, the coaching community rarely, if ever, thinks or speaks or writes about where the fruits of their so-called 400% efficiency improvements end up. They either auto-assume that the tropical delights are doled out fairly, or the topic is taboo; undiscussable (RIP Chris Argyris).
Take a guess at which CEO recently made all these inspirational statements:
- “Overall I am very pleased with the progress we have made, but we still have a lot of work to do to drive consistent execution and navigate a rapidly shifting marketplace.”
- “We saw improved sales in our mainstream XXXXX business, but we need to improve our pricing discipline and profitability,”
- “We saw improved sales execution, a strong hyper-scale quarter, and stabilization in XXXXX complimented by revenue growth in YYYYYYY”
- “We improved our share position in all three regions”
- “We continue to manage the end-to-end cost structure of our XXXXX business with profitability very much in mind.”
- “Looking forward we will stay committed to smart capital allocation and profitable growth.”
- “As we said at our security analyst meeting last month, we believe we can grow both margin and share over the longer term. We’ll continue to be aggressive in targeted cases, but we have more opportunity to improve our profitability”
If you’re expecting an answer from BD00, then fuggedaboud it. You can pick any CEO because the vast majority of C-execs speak in this same tongue. But ya know what? Despite the standard BD00 sarcasm oozing from this post, the “system” demands that somebody do it; and I’m thankful that those who do it, do do it. I wouldn’t want to do it. In addition to not fitting into the physical and psychological profiles required by the C-level community, it’s not my cup of tea.