ISSUE 4

IN THIS ISSUE:

Gold vs. Silver companies – a practical
illustration

In our last issue we wrote about debate, dialogue and defensive routines. We noted that in debate we typically advocate strongly for a position. In debate we need to win the argument. With dialogue we noted that we focus more on the relationship and the valuing of different ideas. In the relationship it was less important to win the argument and more important to arrive at a joint or collective understanding about what an effective solution was. We received a lot of excellent feedback about this article and some people have asked us to comment on how this “plays out” in organisational settings.

In “Built to Last”, Collins & Porras researched what they described as 18 “gold” companies that outperformed the stock market from 1926 to 1990 by a factor of 15. In the same period they looked at another 18 “silver” companies that outperformed the stock market by a factor of 2. What was the main distinction between the gold and silver companies? Collins & Porras called it “The genius of the AND”. That is, the ability to explore and implement the best features of what might appear to be competing positions.

This involved recognising that, in a complex world, pretending the certainty of a position was a false paradise.  The gold companies simply managed contention and contentious issues better than the silver. Collins & Porras are not the only researchers to have identified these critical criteria to company performance. The overall research is clear. There is an extreme competitive advantage to being able to supplement “either/or” type thinking, with “both/and” type thinking, and that both combined will outperform either alone. The way to do this is with more inclusive dialogue and less hierarchal defensiveness and debate.

What we find is that with any dilemma, there is likely to be some positive and negative consequences with either choice. A typical example is the decision to centralise or decentralise some aspect of a company’s operation. For many organisations this has proved to be a dilemma and some have had a crack at both strategies in a quest to find what works best for them. Imagine the total costs over time where the company accedes to the wishes of the strongest debater!

If one were to debate the issue and advocate for one of the options over another, the debate naturally promotes the positive and minimises the negative. For example let’s take two managers working in the same business where sustaining competitive advantage depends on good systems and customer service. The pro centralisation debate highlights greater system integration and coordination and points to an increase in ability to gain consistency in approach. This side either refuses to focus on, or minimises the issue of, potential excessive control and distancing from the customer.

The pro decentralisation debate highlights benefits of greater empowerment of staff and being close to the customer. This side refuses to focus on, or minimises the issue of, people reinventing the wheel, silos and a lack of coordination. In debate, we rarely see that system integration, coordination and consistency (centralisation) can be complimented by empowerment of staff and getting close to the customer (decentralisation). Similarly in debate, we rarely see that excessive control and distance from the customer (centralisation) can be just as uncompetitive as silos and lack of coordination and lack of consistency (decentralisation).

In genuine dialogue we balance advocacy with inquiry. Put another way, we ask as many open questions to gain a deeper understanding of the choices and the potential upsides/downsides of a dilemma as we make statements advocating a single cause or solution. While this might sound straightforward, most of us learn the debating style is due to the way we have been conditioned to solve problems. We learn from an early age the certainty of answers to spelling, maths, history and science. Questions to which there is often only one correct answer. Certainty gives us closure, helps define basic differences between “right” and “wrong” and often shapes our success in terms of rewards. There are no rewards from computing 3 + 3 = 33! But in a complex competitive world, it is the “gold” companies that don’t pretend the certainty of an unknowable future position and actively seek out different perspectives.


Suspending employees pending
disciplinary investigations

Just prior to Christmas 07, the Employment Court heard an appeal brought by an employer where the Employment Relations Authority had earlier found that the employer had unjustifiably dismissed an employee (B & D Doors Ltd vs. Rory Hamilton, CC 28/07).

Mr Hamilton, acknowledged to be technically competent in the industry, was employed to manage an expansion of the business in October 02. Production began in April 03, but by August 03 it had become necessary to confront issues of performance and targets. The employee himself had said that these discussions, including a temporary demotion had left him feeling broody, de-motivated and only doing what he was asked to do.

In the end, the Court found that the employer conducted an appropriate investigation into allegations it had properly put to the employee i.e. to have deliberately sabotaged production which was regarded as a breach of the duty of fidelity (the duty includes not deliberately harming an employer’s business).

One important note in the judgment concerned the letter advising the employee of the disciplinary investigation about to take place. The letter included the statement “In the meantime because of the seriousness of the allegations you are suspended on pay from now until the meeting”.

At the original hearing, the Employment Relations Authority concluded that an employer may only justifiably suspend an employee pursuant to an express right to do so contained in an employment agreement. The Employment Court has since ruled this is an error of law and that suspension may be justifiable in the absence of contractual authority and, even in exceptional cases, in the absence of consultation. In each case, the fairness of the decision must be assessed on the facts.

In this case the Court held that although there were good grounds for suspension, the grounds were not so strong, or the risk of danger so imminent, that consultation could be dispensed with. The employee’s grievance on this issue was upheld but it was a “claytons” victory. The Court also held that when it came to considering remedies, it was required to take into account the extent the employee’s own behaviour had contributed toward the situation leading to the grievance. It decided that the contribution was 100% and therefore no remedies were available to him from the employer.

Comment:

This case serves as a reminder of two important principles. The first is getting the recruitment decision right. The personal and social Emotional Intelligence competencies that account for 75% to 96% of managerial performance must be adequately assessed. Technical knowledge and skill is no substitute in a managerial and/or leadership role.

The second is that, even though suspension was justified and on full pay, the way in which it was done led to a justifiable grievance. Taking a conservative approach to “process” that may potentially disadvantage an employee in some way is something on which to seek advice.


Leadership when changes are afoot

Why is it that the most compelling and logical cases for change do not always win the hearts and minds of those who may be advantaged as a result?

We have worked with public and private sector organisations assisting the introduction of change in structure or processes, helping to minimise cynicism and maximise engagement with ideas through facilitating dialogue. This approach helps avoid the spectacular international failures of business process re-engineering in the 1980s where 70% of change initiatives were considered to have failed over time. In this context, failure means the net costs of change e.g. redundancies, outweighed the long term benefits associated with productivity gains and overhead reductions. This equation was often coupled with long term damage to the company through cynicism, distrust and a focus on survival rather than growth.

Putting aside whether people can do the numbers accurately, our view is that a significant contributor to the failure to make the costs vs. benefits equation work results from the way ideas for change are introduced and how “resistance” is dealt with. In essence, we have noted that change responsiveness of individuals in organisations can be assessed on a continuum.

At one end of the continuum are the “change junkies”. Their attitude is “bring it on”. They love the buzz of a dynamic and fluid organisation, they are intellectually stimulated by imagining how things might be and see a glass “half full” rather than “half empty”. People at this end of a change continuum tend to be adventurous and open to reasonable risk-taking. With reserves of optimism, they are comfortable with ambiguity and are less inclined to wonder what might go wrong. They find changes to roles involving new people contacts and business processes invigorating and have sufficient self-confidence to believe they can win people over and exert influence.

At the other end of the continuum is a group who are more “change averse”. Their attitude is that while things might not be perfect, they do a pretty good job despite obstacles. They don’t really see value in putting at risk that which they have worked hard to achieve. They love to get things right, take pride in what they have done, particularly where there has been some effort involved. With change they see the comfort in existing relationships is challenged, not just the work output. For people at this end of the continuum it takes time to get to know how people like to work, what they like and dislike. Working with new colleagues or customers as a result of change requires additional effort in areas they may not be all that comfortable with. They are more intellectually stimulated by the tasks and processes associated with the status quo. They therefore tend to be more cautious, prudent and more challenging of changes proposed, particularly if the scale of the change is likely to impact on them significantly. Generally, the change averse are less comfortable with ambiguity and spontaneity and more comfortable with what provides security and predictability.

In the middle of the continuum where most people seem to be is the “change jury”. If change at the ends of the continuum represents a choice between black and white, the change jury are grey. For them, they are deliberating. The proposals might work and they might not. There is neither a clear embracing of and commitment to change nor a reluctance and resistance to change. Change jurors tend to see the benefits of change and opportunities slower than the change junkies but quicker than the change averse. Neither ally nor enemy, they are open to possibilities. This does not mean they are permanently on the fence. It means they are unlikely to wholeheartedly commit to either supporting or resisting too soon. Their commitment is there to be won. Politically, this group may run with the hares and hunt with the hounds communicating with and offering support in either camp. They may see more complexity in deciding which way to go. While the “junkies” and the “averse” may have more intuitive and visceral responses, the “jurors” are out deliberating over the available evidence. Their questions, not always articulated, are about the pros and cons of change, the benefits and risks, the opportunities and threats associated with themselves, customers and their colleagues.

Clearly, dealing with these psychological responses requires some sophisticated leadership. It is obviously important not to treat the “workforce” as a homogenous entity. One size definitely does not fit all! It’s also important to acknowledge a leadership dilemma between a desire to empower the choices and actions of others and the desire to make progress and get to a resolution. As leaders we intellectually understand the importance of involving and engaging others. We also feel that it’s the right way to get to enduring solutions. Yet we are expected to arrive at a point of closure by ending the debate and taking responsibility for action, rather than debating the direction of the vision or falling prey to paralysis by analysis over the options.

Like many other leadership challenges, introducing and facilitating change requires its own set of Emotional Intelligence (EQ) competencies across personal and social domains. At the personal domain we clearly need to balance a focus on achievement with understanding our own inner signals around haste and patience. Being able to connect to a compelling vision of the future and how it may be different from here and now, doesn’t mean everyone will grasp that message immediately. Then there is the skill of self-control and being deliberate rather than instinctive in dealing with reactions from others that may not be positive, or even the frustration that comes from the “jurors” who won’t (in the moment) express any view. The skill of adaptability is also an important skill. We need to be nimble in our thinking and include others’ ideas that we may not have previously considered.

In the social domain, the ability to be in tune with others’ emotions in a time of change is fundamental. Many personal grievances or ongoing disaffection with change processes simply arise because of the failure to grasp another person’s perspective and deal with it sensitively. Managing conflict, influencing thinking, and maintaining collaboration within teams are also important social skills as we grapple with changing organisations to achieve benefits that outweigh costs. In the end, facilitating successful change requires more than compelling vision and logic. We need to understand the range of reactions others give, how we react to those reactions and what it takes to get widespread collaboration with our change agenda.

New appointments

We are delighted to announce the appointments of John Maskill to our team of consultants and Amanda Gissing as our Administration Manager & Test Administrator at PeopleFit.

John has significant management and business expertise across industries, and will assist our clients in recruiting, developing and advising on performance. He has previously been a management consultant with clients in transport and food processing industries, as well as leading the sales, marketing and business development functions with companies in the pharmaceuticals, nutraceuticals and engineering industries. John describes himself as a “straight forward person who looks to build long-term business based on trust, professionalism and performance”.

Amanda comes to us with an excellent secretarial and administrative background from Southern Community Laboratories and Central Secretarial Services. We are confident that clients will find Amanda organised, professional and very helpful.