Technology and Organizations
In my last post, I focused on the value of transparency for getting work done. Transparency can also have a broader effect. In a recent peer-reviewed study in the journal Organization Science, Emilio J. Castilla looked at merit-based rewards for almost 9,000 employees before and after changes related to transparency were implemented. Before accountability and transparency tactics were put in place, women and underrepresented groups had lower pay unexplained by differences in performance or position. After transparency and accountability practices were implemented, the gap went away. My take, supported by over 30 years of research in my field, is that given information, managers do the right thing. Without information, bias can creep in.
This is timely, important research and especially interesting from my Silicon Valley location. The graph below shows 2014 data from the top tech companies. To their credit, they share this data voluntarily and it has focused attention on the problems for women and underrepresented groups. Apple recently reported their 2015 data, though with little change showing up yet. Slack, Pinterest, and Airbnb are all working with Paradigm, a startup focused on helping change these numbers.
I’m very interested in the internal accountability and transparency in these companies. Google has been in the spotlight around a spreadsheet Erica Baker, then a Google employee, created for Googlers to share information about their pay. The data raised questions about pay equality. She received great support from her peers, but not always from management. In later reports, Google told reporters that “employees are welcome to share information about salary if they choose.” What if such a spreadsheet were part of standard practice? Gender wage gaps are smaller in government and union settings where there is pay transparency as a matter of course.
It’s wonderful that these companies are sharing and taking action. (I’d also like to see data on age diversity - Microsoft provides theirs here, but guessing results look different in some of the other firms.) Internal, at least, accountability and transparency may be directions for them to consider. We can all take part by supporting young people interested in STEM fields and the organizations that give them solid backgrounds.
Tools to Support Transparency and Accountability
Technology may also play a role. Transparency and accountability are areas where technology can help us do the right thing. Technology supported task feedback helps us do work “right” and better. Process and outcome transparency (at the heart of the Castilla study) help us stay on the right side of just behavior. As internet enabled sensors, ubiquitous video, and internet-enabled work become the status quo, it’s easier to “work out loud” without extra effort and to hear the work of others as part of the ambient environment. Transparency doesn’t have to be hard and it can provide great value even as it supports our values.
More on Castilla’s Research
Castilla opens with a detailed review of accountability and transparency research. Building on Tetlock’s research in the 80s, Castilla describes accountable situations as those where you will have to justify your decisions and actions. Accountability provides motivation to make more analytical/careful decisions. As shown in some of Castilla’s earlier work, this can reduce bias in organizations. Transparency is about relevant, accessible, and accurate information. He splits both accountability and transparency into process and outcome categories -- which for those of you keeping score -- also ties the work nicely into research on how just people feel an organization is.
Transparency is at the heart of modern work and organizations. Tom Malone, in his book, The Future of Work, talks of a shift to more decentralized organizations where there is “participation of people in making the decisions that matter to them” [emphasis in the original]. People can’t make decisions if they don’t have information.
Warren Bennis, in Transparency: How Leaders Create A Culture of Candor, highlights the monetary value of transparency, "[a]gain and again, studies show that companies that rate high in transparency tend to outperform more opaque ones." He cites a 2005 study finding that a group of 27 U.S. companies noted as "most transparent" beat the S&P 500 by 11.3 percent.
Lead By Letting Go: Transparency
I’ve had the chance to talk with a variety of executives about the value of transparency. These conversations, combined with results from peer-reviewed research, prompt me to place transparency at the heart of how you lead by letting go. It’s not that transparency is an absolute positive, but rather that managing transparency is a key skill in our future of work. (Below, I’ve provided links to three articles if you want to follow the recent research on these issues.)
Avinoam Nowogrodski, CEO and founder of Clarizen, the online collaboration and project management company, provides thoughtful advice as well as a tool to support transparency. Over a coffee on the San Francisco waterfront, he and I talked about the challenges of modern work. We are often physically separated from our teammates and the pace of our work seems to be increasing. I’ll add that, though not really a change, it surprises many that the U.S. median tenure with a company is just 4.6 years. We don’t have a lot of face-to-face opportunity to learn from our colleagues.
Technology Can Help
These dynamics are enabled in part by by technology tools. Brynjolfsson and McAfee, in their book, The Second Machine Age, describe the good and the bad of our changing work environment. They suggest that we learn to “race with machines,” rather than against them.
One way the machines can help us is by providing greater transparency around our work. Rather than proactively reporting on our work, the machines can automatically share as we get on with the tasks at hand. Teams do better to the extent that their members know who knows what, who needs what information, and how to coordinate. If we have tools and the will to apply the knowledge gained via the tools, team performance can be supported by technology. In the past, when it was more typical to work in the same room with our teammates, transparency was supported by the technology of the furniture layout. Today, our electronic tools can provide some similar access to knowing who knows, and needs to know, what.
It’s a classic example where the outcome is the result of the human, technical, and organizational dimensions of the work. Transparency has value, if we pay attention to what we see and don’t make the process of providing transparency onerous.
Nowogrodski suggests four principles which span the human, technical, and organizational dimensions of work, as well as crossing individual, team, and organizational levels of action:
- Democratic information sharing
- Evolution into a transparent enterprise
- Aligned input and impact
- Organic innovation
It’s not transparency for transparency's sake, but rather for impact and innovation. In an article for Entrepreneur.com, he offers:
[L]eaders within enterprises that exercise transparency do not feel the need to “force feed” transparency to employees. This is because transparency is embedded within the fabric of their culture.They own it. As such, they unleash transparency from within to qualitatively and quantitatively improve employee engagement, workflow management, communication and collaboration, customer support and development, program and project governance, and more.
Take Action -- At the System Level -- Then Let Go
Performance is a combination of motivation, opportunity, and ability. Transparency can help motivation by letting people understand the connection between their actions and their outcomes. Transparency can help opportunity by signaling about the work that needs to be done (I’m looking forward to posting about a recent interview with RallyTeam founder, Dan Ellis, on a related topic). Transparency can help ability as people get feedback closer to their own actions. Build organizational systems that enable transparency, then let people get on with their work. Lead by letting go.
Deep Dives into the Academic Work on Transparency Process and Outcomes
- The Transparency Paradox: A Role for Privacy in Organizational Learning and Operational Control (Bernstein, 2012)
- Organizational Transparency: A New Perspective on Managing Trust in Organization-Stakeholder Relationships (Schnackenberg & Tomlinson, 2014)
- E-leadership: Re-examining transformations in leadership source and transmission (Avolioa, Sosik, Kahai, & Baker, 2014)
Getting (More of) What You Want: How the Secrets of Economics and Psychology Can Help You Negotiate Anything, in Business and in Life is Margaret Neale and Thomas Lys' valuable new book. I've known Maggie and Tom for decades, but friendship isn't needed to motivate this review. I need this book. I bought both electronic and hardcover versions because this is a book I'll use in my work -- and you should too.
If You Are a Negotiation Novice
You should read this book because is provides an accessible foundation. I cover negotiation as part of my Plugged-In Management workshops and this will be the book I offer (at the end!) of the sessions I teach. The preface gives you a clear perspective on the power of a disciplined approach to negotiation. By the end of Chapter 4 you'll already have the ability to to get more of what you want. If you've been trying out the techniques as you read these chapters, you'll have already paid for the book and the time it took you to read them. Neale and Lys also have done a wonderful job distilling the material from their consulting and courses into clear frameworks and tables to support your preparation.
If You Are A Self-Taught Negotiator
This book will take experienced, self-taught negotiators to the next level. You’ll discover why your good techniques are working and how to improve on your results. I expect that even the most experienced negotiators will be interested in the results from recent research on negotiation and the connections across psychological and economic perspectives. Neale is the Adams Distinguished Professor of Management at Stanford’s Graduate School of Business. Lys is the Eric L. Kohler Chair in Accounting at Northwestern’s Kellogg School of Management. Have no fear, this isn’t a textbook nor is it heavy statistics. What it is heavy with are solid examples and eye opening results. I've read the foundational research on whether or not to make the first offer -- and the systematic review provided in the book both extended what I knew and put it into actionable terms.
If You’ve Already Had a Great Negotiation Class
I suspect that even Neale & Lys’ students will find significant value in the summaries following each chapter. As soon as my hardcover arrives (this review is based on the Kindle version), I’ll be adding tabs so I can quickly flip to the summaries as preparation for any upcoming negotiation. No doubt you learned in your negotiation course that preparation and high expectations are critical to getting more of what you want. Use these summaries to kick off your preparations and problem solving efforts. Chapter 8, Managing the Negotiation: Supplementing and Verifying What You (Think You) Know will get special attention as it describes how to learn from the responses of the person you're negotiating with - a topic I know I need to give more attention.
If You Don’t Negotiate
Perhaps you don’t negotiate in a traditional sense -- but you do negotiate. Change management, technology implementations, teamwork, and social settings are all full of negotiations. In my book, The Plugged-In Manager, I rely on negotiation to help people leverage their human, technical, and organizational resources. I learned the basics and more from Maggie Neale and our colleague, Greg Northcraft. I recall feeling, and being, far more powerful once I understood the problem-solving nature of their negotiation practices.
Getting (More of) What You Want: How the Secrets of Economics and Psychology Can Help You Negotiate Anything, in Business and in Life is a book you should use, not just read. It’s also the kind of book that you should share with your colleagues. The last practice of a a plugged-in manager is sharing. The idea is that if others understand the same language you do, you’ll find new value in your day to day work. This is a language you want to know.
Is your organization ready for the 21st Century? Do you understand the increasing pressures on organizational structure and management? Is your organization’s design and leadership approach ready to face these demands? These are the questions twenty-eight senior executives from the U.S., Colombia, India, Oman, and Thailand addressed as we worked together to leverage old and new strategies for their organizations and careers. The occasion was Northwestern University’s 21st Century Management executive program. The phrase, “scanning the future” is drawn from the last segment of my sessions.
I promised the participants additional readings (building on my earlier, Summer Reading List), and hope others will add to what I have here via the comments. I’ll also include the pre-readings we used to prepare for each segment.
The Demands on 21st Century Organization
In this segment we worked through the pressures on organizations today and in the future. These included (vast simplification): globalization, artificial intelligence, disintermediation, freelancing, and education. Earlier in the week the group had discussed the pace of marketing and strategy change, the value of mindfulness, our networked society, and multi-generational workforces.
We started with Leadership Is More Than Interpersonal Skills, a short Harvard Business Review blog post focused on what I mean by demands on the 21st century organization and how this puts pressure on you to lead with all your resources -- not just your interpersonal skills -- all of your human, technical, and organizational resources.
- Thriving in an Increasingly Digital Ecosystem (Weill & Woener)
- In the Future, Employees Won’t Exist (Milbourn; Note: I’m an investor in Milbourn’s company). The extensive comments to the article will provide a starting point for future sessions.
- Hacking Education for our Future of Work: A Grand Challenge (Griffith)
- The STAR model (Galbraith). I hope to have a Griffith STAR description up soon and will update this post then.
Designing the Agile, Connected Organization
We used the case, WL Gore: Culture of Innovation (makers of Gore-Tex), to take on the questions of organizational design and control in the 21st Century. Slide-deck version. Note that WL Gore (and Nucor Steel) are famous examples of light-weight management -- in companies designed in the 50s & 60s. Zappos’ work with holacracy is just a current visible version.
- What's Happening at Zappos May Be All About the School Bus Test (Collings)
- The Big Idea: The Age of Hyperspecialization (Malone, et al.) goes into some of the opportunities of slicing work into smaller pieces and loosening the boundaries of the organization to enable others to participate.
From the hyperspecialization article:
This ability to distribute computer-based jobs to a vast army of workers doesn’t only make old tasks go faster; it enables the completion of a whole new class of time-critical tasks. Consider the search for Jim Gray, a well-known computer scientist who disappeared at sea in his small sailboat in 2007 and was never found. When the news of his disappearance reached his colleagues, they realized it would not be impossible to search the 30,000-square-mile patch of ocean in which Gray’s boat just might still be afloat. Over the next few days near-real-time satellite images were relayed to thousands of Mechanical Turk workers and volunteers for close examination. Such an effort could not previously have been imagined—and suggests many other possibilities, from scanning for suspicious activity in an office building’s overnight video feeds, to translating headquarters communications simultaneously into many languages, to responding quickly to a potential client’s complicated request for proposal.
We see this approach now in the vast application of volunteers to natural disasters, solving complex business analytics problems, and more. The freelance marketplace continues to diversify even as heavy weights Elance and oDesk join to form UpWork. The “gig economy” is in the news this week in the US presidential campaigns.
Leading the Agile, Connected Organization -- Execution on 21st Century Practices
In this segment I had the opportunity to share some of my current work on Lead by Letting Go. We started with a case on LinkedIn, looking to gain value from whatever LinkedIn does -- for example, with their recent purchase of online education company, lynda.com, rather than solving the typical case. We looked to let go of 20th century boundaries and processes, while holding tight to our performance standards, relationships, the value of education, and the laws of our particular organization’s “physics.”
Staying with the ideas of leveraging modern technologies and organizational relationships, we looked at the article The Third Wave of Virtual Work, before reading the case -- LiveOps: The Contact Centre Reinvented. The case follows the American Red Cross as they dealt with over one million people displaced by Hurricane Katrina in 2005. Whether or not your industry works with call or contact centers, it’s interesting to consider how to work with “instant on” capabilities. LiveOps is just one example of 21st century organizational forms built on a freelance economy. Uber, Lyft, Mozilla (Firefox), Freelance Physicians, Amazon Mechanical Turk, and many many others, offer options to traditional “balancesheet” employees.
We used light-weight experiments as a key tool in this segment. Tom Chi’s “doing is the best kind of thinking” video was a great opener and we followed it with examples from Intuit.
- Connecting talent with opportunity in the digital age (Manyika, et al.)
- Intuit’s resources for innovation catalysts
- The Lean Startup (Ries)
Scanning the Future
Our last segment was short, but critical. We discussed execution and especially the role of data-driven processes. We focused on iterative change throughout the session (the world moves too fast for long periods of planning in many settings, note the Tom Chi quote above) - but here we applied it toward scanning the future. Marissa Mayer’s “Data is apolitical,” video as well as Scott Cook on Intuit’s global expansion, emphasized the role that evidence-based management plays.
The task for the participants was to design a scanning process for themselves or their organization. Whether personal, team, or organizational, we all need a process for staying aware of our challenges and opportunities. One of them was wise enough apply the technique, “leverage your network,” to turn the first step of their process on me, asking for additional readings -- and thus this post. I’ll now do the same with you: What have we missed? What readings, videos, and links should I be using to prepare for future sessions? What other materials would be excellent follow-ons to the material here?
Our Future Together
Join us for a future session of 21st Century Management. Dates are available in December 2015 and May 2016. The focus on agile, connected, execution makes it especially powerful if more than one member of an organization attends. We had several groups with three or more members and it felt like they had unique opportunities for leveraging their experience.
In the recent top rated book, Simple Rules: How to Thrive in a Complex World , Donald Sull and Kathleen Eisenhardt offer that, “When many parties must work together, simple trumps complex” (p. 44). This is a beautiful fit for the future of work, a future made up of complex work, performed in complex ways. Freelancers, contractors, and global project work, all intermingle with traditional organizational forms. Rather than try and understand all the complexities yourself, partner with those who do -- and do it in a simple way. By simple in this instance I mean push decision-making to where the information is, close to the work itself.
Complex Work and Partnerships Require Simple Rules and Direct Connections to Feedback
This is such a strong idea that Sull and Eisenhardt use it as the conclusion of their book:
..simple rules work because they provide a threshold level of structure while leaving ample scope to exercise discretion....
Close to the facts on the ground, individuals can draw on their judgment and creativity to manage risks and seize unexpected opportunities. The latitude to exercise discretion not only makes simple rules effective, it makes them attractive. People [and organizations, my addition here, but also covered in the book] thrive when given the opportunity to apply their judgment and creativity to the situations they face from day to day. And if they benefit from simple rules, they are more likely to use them and use them well" (p. 228).
The “threshold level of structure” is what keeps the ground-level decision making from just being tactical. Key is that the structure is understood and committed to across all actors. Nilofer Merchant talks about the value of co-creating strategy so that the vision and the tactics are tied across all levels of the work from inception. Co-creation can support commitment and innovation. Sull and Eisenhardt provide detailed notes on the value of working throughout the organization as rules are created -- and are clear that strategy and execution cannot be separated.
The Future of Work Is Complex, But the Underlying Technologies Can Help
Internet enabled collaboration, product development supported by real-time data, The Internet of Things. These all mean we spend more time and effort checking and connecting with data and others throughout our days, and nights. The process is not simple, but it could be simpler. Some organizations have found ways to leverage the complexity of data in ways that simplify the work.
Pulse Mining Systems provides integrated business management tools to mining companies. (I’m looking forward to writing a more historical piece remarking on how much mining has taught us about management.) They offer resources for operations, human resources, marketing, and more. The key is that they don’t do it alone -- and their tools aren’t meant just for executives or data scientists.
I spoke with Rob Parvin, then their visualization and analytics manager. I was looking for an example of the value of offering access to operational data to people doing the work, but I found much more. Yes, he described examples where mines with five kilometer conveyors are progressing from manual reporting to real time, sensor-based, feedback to the shift managers. Yes, maintenance and staffing decisions are made with better data. (More on those soon.) But what surprised me was how they were creating these opportunities.
Pulse Partners to Co-Innovate
Pulse partners to simplify both their strategic decision making and how they then take action on that strategy. They co-innovate -- work with their strategic clients -- to identify the specific information needed by the client for decision making (going for simple rather than complex), key metrics, and prototyping. The product is eventually rolled out as a general offering -- but with the knowledge that it’s a tool that’s valuable in the industry and works. The implicit rule is that products are co-developed rather than created away from the work itself. They’ve been able to create early versions in as little as three weeks.
Pulse is able to move this quickly because they’ve partnered with two analytics companies rather than trying to build out their own capabilities (implicit rule: Don’t reinvent the wheel). They work with Birst (see an earlier mention here) and Tableau to provide analytics and visualization building blocks that are rapidly prototyped and tested in the field. The complexity is managed by focusing on pre-built, reusable capabilities. The partners are bound by a common interest in answering operational questions.
In prior posts I’ve written about how we can lead by letting go (of old school management techniques), but that creates an image of chaos for some. Instead, let’s think about a structured handoff of responsibility. We are unlikely expert in all the areas where we need expertise. Pulse has found like-minded partners. SAP has done the same with their co-innovation labs. Each seems to have developed simple rules of organization to handoff pieces of the innovation process to partners with appropriate skills.
My Own Simple Rules
Rereading Simple Rules: How to Thrive in a Complex World, and considering the issues in the context of our quickly changing work environment, has inspired me to think about my own simple rules. I work with a variety of audiences interested in designing organizations for innovation and offer a process for creating designs unique to their settings (I’m in full agreement that the local creation of the rules is an important piece of the process). That said, I think there are a few rules many can work with and I share them here in hope that you will help me improve them.
Base decisions on data, with decision makers as close to the work as possible.
Build teams with diverse skills, but common interests - highlight the interest.
Bundle similar work, and where possible, pass off to automation.
Be transparent and pay attention to what others are sharing with you.
Sull and Eisenhardt use the second half of their book to discuss how to refine and improve your rules. The above are just a start for me, are they also an interesting start for you?