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April 2012

Closing the gap between rhetoric and reality

PASS iStock_000001252419MediumHow closely does your organisational behaviour resemble your organisational rhetoric? And does it really matter?

I say that it does. After all, if an individual professes something and fails to put it into practice you impugn their integrity and call them a hypocrite. And you would be very careful as to how much trust you place in them. So by the same token you could say that an organisation that does not live up to its principles has no organisational integrity. And you probably wouldn’t want to do business with an organisation that lacked organisational integrity. Would you?

But, then I hear you cynically ask whether there is any organisation today that has that has organisational integrity. You just have to think of BP and their “safety is our first priority” message and the Deep Horizons disaster to realise what a tall order it is. Yet ever since then it has been an issue that has grabbed my attention. (See my earlier blog on the subject here.)

But even I was shocked when I read recently that the very day that Lehman Brothers filed for bankruptcy in 2008, three top credit rating agencies had rated the firm as an above average investment. Even allowing for the caution that prevents the spread of bad news in case it fuels more bad news, this suggests a remarkable lack of organisational integrity. Clearer this is an important issue, and not just for investors, given the fallout of that collapse.

So it was perhaps not surprising that an article on Greg’s Smith’s very public resignation from Goldman Sach’s had me thinking further on these lines. Two things in particular struck me.

First was the statement that “CEO Dick Fuld ran Lehman in an authoritarian manner which created the kind of competitive culture that led to the bank’s ultimate demise.” You have to ask yourself if any kind of authoritarian governance can lead to organisational integrity. It is simply incompatible with command and control because the two concepts are ultimately mutually exclusive. It doesn’t matter how been the management is, people will not necessarily behave as they should just because they are told to.

Second was the question, “How can this culture have changed so drastically during one man’s career?” and the explanation “The shift could be partly attributed to Goldman Sach’s move from the unlisted public domain, (where the employees owned almost all the capital, to the public domain, (the stock market).” This sends a very clear message that the market is not the panacea that it is so widely held up to be. However, it also sends a very clear message that there is a lot more to be said for employee ownership than we generally give it credence for.

So perhaps, if you want the kind of employee engagement that creates true organisational integrity you best bet is to create greater employee ownership. Maybe it won’t be perfect, but it is more than just human capital measurement and it certainly promises to close the gap between reality and rhetoric better than anything else we currently have. What do you think? Are you willing to give it a try? 

Reaching for the sky in performance improvement?

Performance improvement. Are you struggling for it? Is your organisation?

Don’t worry – you are not alone. A quick search on performance improvement in Google returned 32,200,000 hits. That’s right, 32 million! If that doesn’t give you some idea of how ubiquitous the subject has become I guess nothing will.

Do you ever feel that in trying to improve performance you are embarking on an endless quest? You wouldn’t be wrong, for it is becoming permanent. That is possibly why the term ‘continuous improvement’ has become almost as popular. A Google search reveals 21+ million hits for continuous improvement: a term which has only really come into the lexicon in the past couple of decades.

Yet there is nothing new about this. Humankind has been doing it for ever, and indeed owes its progress and survival to the innate endeavour to always get better.  Indeed it is a law of life. So there is absolutely nothing wrong with always striving to improve.

And it makes perfect sense that, “Organisations already invest a lot of time and money developing managers to handle the performance of others. However, it's widely believed this is something that most companies can still improve upon to get the best out of their employees." (HR Magazine)

Challenge iStock_000003187407SmallAnd yet, you have to ask yourself how effective their efforts are. I don’t know about you, but I cannot help feeling that they are not investing that well or putting their ladders in the right places. You see, the focus remains on "getting the best out of employees." And surely that is the wrong focus. Don’t you think you would do far better to invest in “making the best of your employees?”

Perhaps you can thank your lucky stars that few, if any, organisations measure the return on management investment in getting the best out of their employees. Yet when you think about it, is it even feasible to do so? After all people determine their own effort; not their managers. And apart from that there are too many other variables involved to realistically measure the management contribution. That being the case, you have to ask yourself if this investment is the best use of resources.

But I can hear you asking yourself, “What happens if I don’t make this investment? How else can I ensure that performance does improve?”

Surely, if people motivate themselves, the answer lies in investing in the people directly: in allowing them to be the best they can be and to fulfil their own potential? For too long we have been “managing”; using status and position to drive others’ behaviour and thereby creating a rod for both employees’ and managers’ backs. Maybe it is no wonder that performance improvement has become such an issue!

For real performance improvement perhaps it’s time to shift that ladder. That would be true talent management. What do you think?