Month: April 2016
Despite all the talk about the strength of peer networks and the new technological utopia in which increased connectivity yields instant equality, power is still often a zero-sum game. In fact, getting organisations to do away with hierarchies is proving to be next to impossible. Notwithstanding the rich example provided by Morning Star and millions of books that call for employee empowerment, shared power arrangements remain extremely rare. On the other hand, for all its enemies, hierarchy is amazingly resilient.
Why do hierarchies persist? In 1832, as Charles Darwin travelled through Tierra del Fuego on the southernmost tip of South America, he came across a series of native tribes whose living conditions he described as ‘‘wretched.’’ He blamed their conditions directly on lack of power structures: ‘‘The perfect equality among the individuals composing the Fuegian tribes must for a long time retard their civilization. In Tierra del Fuego, until some chief shall arise with power sufficient to secure any acquired advantage, it seems scarcely possible that the political state of the country can be improved.”[i] Since he made that assertion over 180 years ago, numerous social scientists have similarly argued that hierarchies are necessary. In fact, many theorists have even argued that hierarchies are inevitable as they stem from our evolutionary roots. In other words, if different forms of organisation were more beneficial, groups would have successfully adopted them long ago.[ii]
Hierarchy has evolved to be the most dominant form of social organisation because it works. All those structures and roles serve a purpose. At its most basic level, the invisible hand of hierarchy helps people know who does what, when and how, and promotes efficient interactions by setting clear expectations and role clarity. Hierarchy also offers purely psychological benefits. Research indicates that perceptions of our rank and status in hierarchies are extremely important to us. In his book The Status Syndrome, Michael Marmot details how closely status is aligned with longevity and good health. Status even surpasses education and income, two factors that usually determine how healthy an individual can be throughout their life. An indicator of this is when Zappos gave the choice of embracing holacracy or taking a buyout, almost 210 of its 1,500 employees took redundancy rather than relinquish their hard-won management rank and the status that accompanies it.[iii]
Whilst it seems hierarchies are inevitable and here to stay, there is no doubt that they can sometimes be dysfunctional. The way forward therefore, is to reap the benefits of hierarchy while at the same time mitigating its negatives. At our recent Future of Work (FoW) Masterclass on Power and Leadership, we asked our participants the following four key questions in order to help them assess and future-proof their organisations’ power structures:
Does power inhibit voice? The vast literature on voice has underscored the reluctance of employees lower in hierarchy to communicate with their bosses. Laboratory research on groups also illustrates a similar pattern; participants temporarily assigned a low-power position tend to voice their opinions less, even though the hierarchy was just constructed moments before. How does your organisation create a psychologically safe environment for all employees to voice their opinions and ideas?
Does power have legitimacy? To ensure legitimacy of power, formal rank and competency must always align. However, people have been shown to rise to power for reasons other than competence. For example, research indicates that we are more likely to select leaders according to their sex, age and physical attractiveness than competence. In this context, it is interesting to note that there are fewer S&P 1500 companies led by women than S&P 1500 companies led by men named John. And John is more successful if he has a deep voice, a large signature and superior golf game.[iv] How does your organisation ensure that power has legitimacy?
How do leaders cope with power? Hierarchies will harm collective success when the possession of power induces leaders to be disinhibited and less sensitive to others’ needs. A significant body of empirical research demonstrates that there is a little bit of ‘Trump’ in all powerful people. In other words, powerful people are more inclined to be rude, to lie and cheat.[v] How does your organisation help leaders to cope with this dark side of power?
What is the effect on the powerless? Profound insights from neuroscience have brought to attention the multi-dimensional effect of powerlessness on employees. For example, lack of power has been shown to have negative consequences on employee well-being, motivation and even cognition. These findings should not really surprise you. Not being able to control your environment produces feelings of helplessness and stress, and study after study has documented that stress can harm your health and well-being. How does your organisation give employees opportunities to feel powerful, so that they do not suffer the consequences associated with powerlessness?
By understanding and answering these questions, organisations can create hierarchies that lead to victory with the fewest causalities along the way. The key lesson is that the future of power lies in making peace with hierarchies and learning how to empower employees without dismantling power structures.
[i] Darwin, C. (1906). The voyage of the Beagle (No. 104). JM Dent & sons.
[ii] Anderson, C., & Brown, C. E. (2010). The functions and dysfunctions of hierarchy. Research in organisational behavior, 30, 55-89.
[iii] Monarth, H. (2014). A company without job titles will still have hierarchies. Harvard Business Review.
[iv] Sebenius, A. (2016). CEOs Behaving Badly. The Atlantic
The quest for talent is one that has long preoccupied the world’s corporations. Many have honed their talent-acquisition skills to a very high degree, continuously boosting their intellectual resources by bringing in the most talented people from around the world. And it is undeniable that one of the biggest assets possessed by large corporations is their potential to find and connect some of the most talented and creative people in the world.
While the talent search is undeniably important, companies still often neglect the next crucial step: taking the intelligence inherent in their carefully picked talent pool and amplifying it to maximum effect.
The amplification of intelligence and wisdom is becoming ever more central to how corporations are addressing the challenges they face and to building resilience. There are four key elements to achieving this: the surfacing of ideas, amplification through open innovation, experimentation and the celebration of risk taking.
For most of the history of corporate life, collaboration has happened when small groups of people worked together face-to-face. Technology is changing this – we now have connectivity tools which enable us to share ideas and knowledge not just within small groups meeting face-to-face, but also across thousands of people meeting in virtual environments. And yet, many large organisations still find themselves going back to the same small group of people for their next big business idea.
One example of how corporations can break this cycle and start harnessing the intelligence of ‘wise crowds’ is the Indian IT company Infosys. Their executive group decided to give younger employees a more active part in the long-term success of the business, by launching a virtual “Innovation Co-Creation Platform”. The platform enables employees to identify colleagues with whom to collaborate, to gain access to business data, and to consult experts and submit a business case for an idea. As well as generating valuable business insights and creating a fast and continuous flow of information from around the world, the platform has made it easier for senior management to identify the most knowledgeable and excited people in the organisation.
Amplification through open innovation
No matter how many great people you have within your organisation, there are always many more outside. Corporations have always been aware of this, hence their habit of engaging with universities and specialist research groups to boost their innovation capabilities – but they now have the opportunity to cast the net far wider and to gain access to ideas outside their established networks. Some good examples of this are InnoCentive, a platform which uses open innovation to connect problems to those with knowledge, and Proctor and Gamble (P&G), which has opened up its innovation challenges to the world through its Connect and Develop scheme – a process the company expects will deliver $3billion towards the its annual sales growth by 2015.
The importance of experimentation
One avenue for surfacing ideas which I think too many companies ignore is experimentation. This can be a particularly valuable process when you are faced with problems to which no-one has a ready-made answer. All the breakthroughs we have seen in medicine, for example, have come through a process of hypothesis, experimentation and clinical trials where several different options are tried out and compared.
Despite the scientific record, very few companies dare to experiment. When I was seeking out examples of corporate experimentation for my book, The Key, I found that they were few and far between and most of them were led by scholars or academics – further underlining companies’ apprehension about experimenting themselves. In fact, the only two that made it into the finished book were at Roche and Xerox. And yet, I feel that if companies would only dare to try, experimentation has a wealth of benefits to offer. After all, one of the biggest changes in the workplace – flexible working – was the result of repeated experimentation at BT.
One of the problems with experiments is that they represent a risk: it is not possible to be right all the time, and some experiments will fail. This can be a serious barrier to empowerment. If an employee is aware that their idea may not lead to the desired outcome, they are less likely to act upon the idea for fear of failure or – in the worst case – losing their job.
So how can corporations encourage employees to set aside their fear of failure? The key is to create a culture where experimentation is valued and failure is seen as a natural part of the process. At Tata Group, for example, the company’s Group Innovation awards include a ‘Dare to Try’ category for daring attempts at innovation which have failed.
It’s clear that the amplification of intelligence and wisdom – whether from inside or outside the corporation – plays a crucial role in helping people and organisations become more resilient. As the examples I have highlighted show, technology has a role to play, but it is those companies who are able to build amplification and connection into specific and every day organisational practices and habits that will reap the benefits.
In 1932, philosopher Bertrand Russell wrote an essay titled In Praise of Idleness. He was writing at a time when only the most affluent in society had the opportunity for leisure time while the poor laboured away in dirty, dangerous and dull work. Today, the situation is quite the opposite: for the first time in history, the most skilled, highest earners in society are working the longest hours. But why is it that those who can afford the most leisure are now taking the least?
It turns out we still have much to learn from the old greats such as Russell and Keynes. Both had distinct yet complementary philosophies on the meaning of work that may help us understand why affluent knowledge workers, with above average pay cheques and already high standards of living, are slaving away to the point of burnout.
The first message is that as a society, we have had a vested interest in seeing work as virtuous. Back in the 18th and 19th centuries, the virtues of work were extolled by the affluent, upper classes who, according to Russell, preached ‘the dignity of labour [to the poor], while taking care themselves to remain undignified in this respect.’ The dignity of labour ‘kept adults from drink and children from mischief,’ by distracting them with 15-hour work days. This ideology was reinforced by religious beliefs that the poor were far more likely to go to heaven than the rich, thus their gratification was coming, just posthumously. So what does this mean for today? According to Keynes, despite entire populations moving into higher skill, higher paid work, ‘we have been trained too long to strive and not to enjoy.’ We ascribe status now to those who make valuable contributions to the success of organisations and our ‘busyness’ has become a proxy for that level of contribution. Perhaps then, if we are to resolve the challenge of long working hours, burnout and stress, we need to remind ourselves of the meaning of work, its role in our own lives and in society as a whole. Now that we don’t need work to prevent us all from becoming delinquent on gin and to get into the afterlife, maybe we can reassess how we spend our time?
A second message from the works of the old greats is that how we spend our leisure time is also a point of contention. Both Keynes and Russell stressed the importance of leisure time in pursuing academic and creative interests. According to Russell, the small leisure class in previous centuries ‘cultivated the arts and discovered sciences; it wrote the books, invented the philosophies, and refined social relations […] without the leisure class, man would never have emerged from barbarism.’ Today, we might argue that these activities take place within institutions such as universities, businesses and NGOs. However, Russell warned that when ‘studies are organised […] the man who thinks of some original line of research is likely to be discouraged,’ making it an inadequate substitute for real leisure time.
While our context has changed markedly since the 18th and 19th Centuries, perhaps there is still something to take from this. How can we liberate people to pursue their passions, experiment and innovate under the necessary pre-condition of ‘no required output’? Some companies such as Google and 3G have attempted this with their ‘20% time to play’ rule, allowing employees to spend the equivalent of one day a week following up on an idea they have had on the understanding that it may come to nothing. But maybe, instead of creating rules around when and how much work time people can spend in liberated, free-thinking, we need to accept the fact that people need to be absent, disconnected and unrestricted if we want them to come up with new ideas. In short, we need to acknowledge the value of leisure time and ensure that work does not encroach. Likewise, we need to reserve energy as well as time for the pursuit of leisure or else, according to Russell, ‘pleasures […] become mainly passive: seeing cinemas, watching football matches, listening to the radio, and so on [… as a result of our] active energies being fully taken up with work.’
Keynes predicted that we would all be working three-hour days by now. We’ve perhaps ended up closer to Russell’s depiction of ‘a large percentage of the population idle, because we can dispense with their labour by making the others overwork.’ We simultaneously have people working extended hours and persistent unemployment. Could our ineffectiveness at addressing the skills mismatches behind this phenomenon be in part because we can make the skilled overwork? Both Keynes and Russell expected it to take some time to transition into a society that can accept and create value through extended leisure, without blindly pursuing more and more work as an end in itself. But perhaps it’s worth remembering Russell’s departing line: ‘there is no reason to go on being foolish forever.’
Keynes, John Maynard. “Economic Possibilities For Our Grandchildren”. (1930): n. pag. Print.
Russell, Bertrand. “In Praise Of Idleness”. (1932): n. pag. Print.
Henrik Ibsen’s play, Master Builder, tells the story of a self-made architect, Halvard Solness, who is increasingly afraid of the young displacing him. As I was watching the piece in the Old Vic Theatre a few weeks ago, one of Halvard’s lines caught my attention: “The young are waiting. In all their power. Knocking on the door.” This made me wonder whether Halvard’s fear is actually real. Will older workers be made redundant by young upstarts? Does the mature workforce need to step out of the young’s way and give them space? And what are the implications – positive and negative – for organisations?
It turned out Halvard was worried about a myth. The reality is that your organisation will see teams in which employees like Halvard and the young will work together. The young were not knocking on Halvard’s door to take his job. Quite the contrary, the young showed up to take jobs his activity created. So how exactly can employing older workers help your organisation grow and create more jobs in the process?
Age diversity provides you with the opportunity to combine skills and characteristics unique to different groups and thus create an effective and efficient organisation:
- The equivalent to Halvard in your organisation has been building their network for more than 40 years. The young know well that they cannot compete with that. Instead, on one hand, their ambition and determination can keep Halvard motivated. On the other hand, Halvard can transfer his network to the young, so your organisation has access to it when he retires.
- Younger workers are often still trying to define their mission and passion, which can translate into higher turnover. Indeed, according to one recent study, Millennials expect to change jobs every three years. Chances are Halvard has worked for you for a while and he has stayed with the organisation through thick and thin. This means he has a deep understanding of the history and culture of your company that cannot be easily emulated by new entrants.
- In the past decades, work became part of Halvard’s daily routine, and all of a sudden he has 8 hours on his hands to kill. Flexible working is a good way of helping people like Halvard transition to retirement. In fact, there has been a 140% increase in over-65s running their own business in the last decade, revealing the many new ways in which organisations can engage with more mature workers. It’s a win-win as the organisation retains Halvard’s critical skills at a reduced cost, and he gets some help with his pension too.
So what can you and your organisation do to avoid a Master Builder-like frustration?
- Help the Halvards in your organisations continually update their skills to stay relevant in a new day and age. Organisations such as GE and HP use reverse mentoring to help different generations learn from one another and to enhance generational cohesion.
- Sense check the signals you are sending to older workers. Do your people processes and practices signal that mature workers are valued? Or do pension arrangements, performance processes and training budgets signal that careers have a hard stop at 65 in your company?
- Break the perceived link between age and stage in your organisation. Retaining older workers will mean people may be managed by someone younger than them. This can create conflict in organisations in which progression and seniority are strongly linked to age and tenure. Creating more flexibility in career ladders is one way to ensure that age and seniority are no longer considered one and the same.
So, what’s the conclusion? Yes, the young are coming and knocking on the door in all their power. Halvard however still has a great deal to offer. As his good friend and counsel, Dr. Herdal, tells him, “You are not laid on the shelf yet, I should hope. Oh no—your position here is probably firmer now than it has ever been.”
Find out more about the challenges and opportunities of longevity by pre-ordering your copy of Lynda Gratton and Andrew Scott’s upcoming book, The Hundred-Year Life at www.100yearlife.com or contact David at firstname.lastname@example.org
 As written on the Old Vic Theatre’s website.
 Milligan, B. Older workers create extra jobs for young people – report, BBC – British Broadcasting Corporation 2015
 Meister, J. Job Hopping is the ‘New Normal’ for Millennials, Forbes, 2012
 Trends and Drivers of Workforce Turnover. Mercer Workforce Metrics Survey, 2014
 Altman, Dr. R. A New Vision for Older Workers: Retain, Retrain, Recruit, A Report to Government 2015
 Steimle, J. Reverse Mentoring – Investing in Tomorrow’s Business Strategy, Forbes, 2015