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
Big data is no longer a novelty for corporate organisations, nor is it the territory of those companies that are particularly pioneering. It frequently makes its way into board meetings and the C-Suite see the value of their organisation using the vast data points that technology now makes available to them. Then why is it only customers, and not employees, feeling the benefit of these advances?
Let’s take a look at how much big data has revolutionised the way that companies market their products and tailor experiences to the individual customer. Amazon has even introduced anticipatory shipping in order to ensure that one of the key differentiators of their service, speed of delivery, remains ahead of their competitors. The company collects a huge volume of data on buyers’ previous purchases, where they hover their mouse and their demography. Complex algorithms allow Amazon to predict what the customer will buy next and they then ship this product to a warehouse or transit van near the customer, ready for their click and buy. The item is subsequently delivered in a matter of minutes or hours rather than the conventional days or weeks, and Amazon maintains its competitive edge.
If organisations have this level of big data on their customers to ensure the company can consistently deliver on their USP, why are they not doing the same for their people? We know that employees are increasingly mobile and retention of the best talent is a huge focus for many organisations. By using big data about their people, organisations can contribute to the employee experience that people want.
At the Hot Spots Movement we have been struck by the benefits of using big data within organisations. When our clients look to bring about a major organisational change, they come to us to run a Jam – a global conversation lasting up to 72-hours. The Jam enables our clients to get the input they need drawing on expertise, experience and creativity from different functions and geographies from across their company. Analysing this thoughtful, extended conversation in the platform allows our clients to have access to the kind of qualitative big data they require. Challenges that have been tackled through this qualitative big data have included work/life balance, brand values and unleashing talent potential.
Our plea to the C-Suite of big corporate organisations? Use the data they have available to them within their companies to help tailor the employee experience and provide an environment they want to stay in.
This week, Republican candidate Paul Ryan was confirmed as the new Speaker of the US House of Representatives. However, his acceptance of the post was on the condition that he would travel less than previous speakers in order to preserve valuable time with his family. Of course this type of demand from such a high-profile man garnered a lot of press attention, as notions of family time and flexible working remain rooted in the ‘working mum’ domain in many countries, industries and companies. It’s still (sadly) rare to hear as may working dads negotiating school drop offs with busy work schedules, as working mums. So, will Mr. Ryan’s bold statement be a catalyst for change?
My work at the Future of Work Research Consortium highlights time and again the importance of role models when it comes to shifting an organisation’s culture. No matter how many policies and practices HR may devise around flexible working and work/life balance, if those at the top aren’t using them, then those attempting to climb the ladder will take this as a signal that they shouldn’t either. Having leaders simply avail of flexible working options isn’t enough either. They need to use the options in a way that is visible to the rest of the organisation. One of the most interesting comments I heard recently from leaders at a Professional Services firm was that they were working flexibly and assumed that others in their teams were doing so as well. However, this was not the reality. Their teams were often unaware that they were taking this approach as the leaders weren’t communicating about it and hence the signal that this kind of autonomy in working style was accepted and, lo and behold, normal was not being received. Mr. Ryan’s very visible commitment to work/life balance will hopefully act as the cue to his team that making time for family is not a barrier to success.
That is the implication for his own team, but what about the wider American and Global audience? What impact can this action have on a larger scale? These are tougher questions. While Mr. Ryan has the bargaining power to make such demands, the average American worker does not. Moreover, he has previously voted against providing paid family leave for federal employees, which has made him an unlikely advocate for a cultural shift in favour of work/life balance. It’s promising to see signs of his change in views on this and we will have to expect that as a matter of course, he will now work for these rights to be extended broadly so that it is both socially acceptable and financially viable for all dads – and not just those in powerful political positions – to exercise the same choices.
So, can Paul Ryan move the needle on work/life balance? My view is that he can certainly change one important aspect of the dialogue. We need more male leaders to demonstrate their desire to be actively involved in their children’s upbringing and highlight the challenges they face in juggling responsibilities – and of course the flexibility they avail of in order to strike a balance. Making this a conversation that managers have with all employees, rather than a request working mums submit to HR, will be a significant step in achieving work/life balance and gender parity.
Historically the answer was simple – money. That’s why the HR function of most companies goes to such extreme lengths to design pay packets (bonuses, team-based rewards, stock options and so on) and to decide through antiquated performance management systems who gets paid what. Indeed, it’s why they’ve been persuaded that senior leaders really are worth up to 200% more than the pay of an average employee.
Yet we have known for sometime that although pay might indeed be a valuable asset for an employee, it’s unlikely to be the driver for their motivation. Indeed, years of research have shown that this valuable asset turns out more often to be a source of dissatisfaction rather than a motivator. Most people don’t work harder, or more creatively or cooperatively because they are paid more.
So recently the search has been on for more ‘intangible assets’ that could be really valued by employees. Perhaps it’s the opportunity to work more flexibly, or the chance to work for a boss that likes you, or to work in a convivial open plan office that employees value. And indeed, perhaps it’s this combination that results in employees being engaged rather than disengaged.
I think – to use a simple metaphor – we are barking up the wrong tree. Let me explain. Over the last couple of years my colleague, the economist Andrew Scott, and I have been asking a simple question ‘What happens when most people live to 100 years’. It’s been a fascinating exploration. One undeniable truth is that if you live to 100 then you will probably need to work into your 80s. Now there is no doubt that over the course of a long working life money is indeed crucial – no one wants to look forward to an old age lived in poverty. So money is a valuable asset that a company can give to an employee.
However, across a long life this tangible asset, whilst important, has to be balanced by equally important intangible assets. It seems to me that chief amongst these crucial intangible assets is the type of work an employee is given to perform. Work that is valuable both now and as a hedge against the future has three crucial elements:
- It is interesting and allows workers to engage their mind and creativity
- It has developmental potential – particularly to in terms of capabilities that are ‘portable’ in the sense that they can be used beyond the current job
- It is non-routine so is unlikely to be substituted in the short term by robotics or Artificial Intelligence
For the sake of simplicity let’s call this ‘good work’. Now let’s play a mind game. Let’s assume that a leader in a corporation acknowledges that the intangible asset of ‘good work’ is as valuable to an employee as the tangible asset of money. If this were the case, what would we expect to see happening within the corporation? Here are five ideas:
- We would expect jobs to be analysed with regards to the extent that they are composed of tasks that are interesting, developmental and non-routine. We could even imagine that these job characteristics are rated against a common currency – let’s call this unit a ‘tang’.
- So when an employer is advertising a job, they are able to show both the financial assets the job is valued at (salary, bonus, stock options etc.) and also its ‘tang’ assets (interest, developmental potential, non-routine)
- When an employee is deciding on whether to take a job, they can balance the tangible and intangible assets it creates. They can decide, for example, that they are prepared to take a higher ‘tang’ rated job at a certain point in their career, even if the salary is lower. Or indeed take a higher paid job whilst acknowledging that the ‘tang’ value is low.
- It could be that managers who are particularly skilled at designing jobs for their team that have a high ‘tang’ value are celebrated for this sculpting skill.
- We might expect that if the ‘tang’ value of a job falls below a certain level then the whole job has to be re-designed to increase the ‘tang value’ by adding tasks that are interesting, developmental or non-routine. This re-design could be initiated by the manager, or indeed by the worker who is performing the job and who is encouraged to broaden the scope of the job to envelope more ‘tang’ rich activities.
Right now it is still money that dominates the negotiated relationship between an employee and employer. Let’s widen the conversation to include an equally important asset – good work. Perhaps by understanding the value of work with as much finesse as we currently understand the value of reward systems, we can begin to give employees a better choice about the deal they want to strike.
Speaking at the recent OMN Future of Work meetup on the HMS President in London last month, I noted that, according to the employee engagement company Gallup, only 13% of our employees are engaged. In the ensuing Twitter debate, people were surprised but resigned to the statistic. They recognised that their workplace contributed to this data. Quite simply, our engagement models are broken. We need to rectify this.
Since speaking at the event, I’ve been looking into companies that are trying to remedy the situation – a vital step given that employee engagement figures are getting progressively worse and churn is increasing. I’ve previously examined what motivational performance management looks like, and this week I’m going to take a look at creating sophisticated and meaningful employee value propositions (EVPs). In an effort to reduce churn and increase engagement, some companies are utilising customer-segmentation techniques in their talent management strategies, giving rise to the ‘employee customer’.
This increasingly popular approach to talent management views talent as customers when considering the employee value proposition. No longer are people viewed as small cogs in a machine; in an increasingly competitive talent environment they need to be given the same care and attention that their customers have long enjoyed.
In global corporations, your people are likely to include four generations and a myriad of cultures, languages, concerns and aspirations. Assuming that you can take this as one homogenous group and create a single employee value proposition (EVP) will lead to misalignments between what you are giving your people and what they actually want. So what’s the solution? Segment, segment, segment!
As your colleagues in marketing will tell you, segmentation is identifying and grouping clusters of consumers that share the same or similar preferences and needs. Clearly, from cluster to cluster, these preferences and needs will vary. Though how you choose to segment is fairly subjective, it is crucial that the segments you create are actionable. That is to say segmentation creates meaningful insights with regards to the EVP for each ’employee customer’ segment.
Click here to learn more about technology that enables you to fully understand your ’employee customers’.
Organisations tend to base performance management approaches, and many other practices for that matter, on the assumption that human beings are innately self-interested. As such, motivational tools tend to be individually focused and based on financial incentives. For example, many roles still run along a ‘reward or punish’ line. That is to say, bring home the bacon and you’ll receive big bonuses; produce mediocrity and you’ll be sanctioned with taking home only your basic salary.
But are we really that self-interested?
Our founder Lynda Gratton has investigated the contrast between the self-interest that organisations expect from their people and what we actually see around us. She points out that many people give their time and resources to help others. Crucially, they do this without getting anything back in return except, perhaps, personal satisfaction. What gets in the way of this natural propensity to give is in fact the performance management structures that many organisations have put in place. These structures isolate personal monetary reward as the sole driver of performance, and underplay the contribution of other more complex motivational factors such as autonomy, mastery of a skill, and a sense of purpose. Therefore, despite being institutionalised in many companies, the wholesale belief in the innately self-interested human being is perhaps misguided.
Increasingly complex world, increasingly sophisticated solutions
Organisations seeking to enhance their performance management approaches must therefore look beyond traditional, hyper competitive performance management where the only motivational tool is financial reward. It is, of course, perfectly possible to manage people in this traditional style, but the outcome is usually compliance, rather than innovation or high performance. As I mentioned in a previous post, we live in a world where the work we do is increasingly complex, requiring employees to produce more sophisticated solutions. A more holistic approach to performance management, in which people are self-directed and engaged, is far more likely to achieve the sophisticated solutions required. To see how this might work in practice, I’d like to introduce you to Atlassian, an Australian enterprise software company. Every third week of the month, Atlassian gives its software developers 24 hours to work on whatever they would like and with whomever they wish. The only caveat to this is that they present what they worked on to their company. Not in a formal, boardroom-style meeting, but in an informal, party-style meeting intended to create a collaborative and innovative environment.
Through creating a more intrinsically motivated workforce, thanks to a reduction in the amount of individualized incentives, Atlassian’s once-monthly 24 hours of innovation has led to myriad improvements for existing software and ideas for new products. This shows that exactly what so many employers are nervous of, giving autonomy to people, can achieve precisely what they need: engaged people producing sophisticated solutions.
For more information about tools that give people the chance to set their own agenda, invest in the future of their organization, and create solutions to complex challenges themselves, you can read about our FoWlab Jam platform here.