Patrick Lencioni:

I have always thought it was a shame that more people don’t go into “giving” professions. In fact, I have occasionally felt pangs of guilt that I didn’t choose a career that was completely focused on serving others. I have deep admiration for dedicated and hard-working clergy, social workers, or missionaries, and I wonder why I haven’t abandoned my career and moved into one of those kinds of jobs.

While I have not completely abandoned the idea of one day doing that, I have come to the realization that all managers can–and really should–view their work as a ministry. A service to others.

By helping people find fulfillment in their work, and helping them succeed in whatever they’re doing, a manager can have a profound impact on the emotional, financial, physical, and spiritual health of workers and their families. They can also create an environment where employees do the same for their peers, giving them a sort of ministry all their own. All of which is nothing short of a gift from God.

(From The Three Signs of a Miserable Job.)

Or, Managing for the Human Side

It has often been argued that the professionalization of the ministry has done much harm to the ministry. I would agree, but add that the professionalization of management has also done much harm to management.

In other words, many of the things that make the professionalization of ministry bad are not simply right concepts from the business world that are wrongly applied to ministry; rather, they are wrong concepts altogether.

In one sense, Tom Peter’s and Robert Waterman’s landmark book In Search of Excellence: Lessons from America’s Best-Run Companies is all about this very thing. The book could be summed up as an articulation of what goes wrong with organizations when ultra-professionalism holds sway, and what goes right when management acknowledges the human side of things and treats people in accord with how God designed human beings.[1]

This paper is a rough sketch of some of the incomplete (and often incorrect) ideas of the rational model of management (which is responsible for the over-professionalization of management) and the more complete and more accurate model that Peters and Waterman set forth. Both sides are dependent on their classic book, In Search of Excellence.

Even though In Search of Excellence was originally published in 1982, it’s analysis of the rational model remains true and helpful, and the ideas that they set forth remain relevant because, in my view, they sync more accurately with the unchanging nature of human beings. The one change since Peters and Waterman originally wrote is that the rational model has fallen into less favor, and their concepts (and related concepts) have gained much ground.

The Rational Model

Description of the Rational Model

The bad kind of professionalism in management is a manifestation of an overly rational view of humans. As such, this kind of professionalism can be equated with a “hard-headed rationality.” It took an almost exclusive numerative, rationalist approach to management. It sought “detached, analytical justification for all decisions” and taught that “well-trained professional managers can manage anything.”

This detached, overly rationalist approach came about because of an over-emphasis on measurement. Measurement is good and important in itself. But it also includes an inherent bias – namely, not everything that matters can be so readily measured. So the rationalist approach contained within itself a numerative bias—those things that can be more readily measured were regarded as the only realities that really matter, and the more intangible, “softer” realities tended to be discounted. At root, therefore, the rational model of management failed to account for the emotional dimension of humans. When people would tend to act in a certain way, the problem was not the theory, but humans – in the rational model, “man was simply designed wrong.”

As a result, the rational model encouraged and sought to implement all sorts of policies and practices which made sense in themselves if you took a solely rational view of people, but which in actuality were completely at odds with how human beings actually function. The result was that people were demoralized and demotivated, all in the name of what people thought were “proven” and “scientific” practices. In reality, the rational approach was not even reasonable—not reasonable, that is, in the correct sense of the word.

Peters and Waterman argue that the rational view “is right enough to be dangerously wrong, and it has arguably led us seriously astray.” Some of the main problems are:

It doesn’t tell us what the excellent companies have apparently learned. It doesn’t teach us to love the customers. It doesn’t instruct our leaders on the rock-bottom importance of making the average Joe a hero and a consistent winner. It doesn’t show how strongly workers can identify with the work they do if we give them a little say-so. It doesn’t tell us why self-generated quality control is so much more effective than inspector-generated quality control. It doesn’t tell us to nourish product champions….It doesn’t command that we overspend on quality, overkill on customer service, and make products that last and work. It doesn’t show, as Anthony Athos puts it, that ‘good managers make meanings for people, as well as money.’ The rational approach to management misses a lot.[2]

Peters points out that quantitative analysis per se is not bad. In fact, the excellent companies are very good at it and are among the best at solving problems with it. Further, if you take any company without a good fact base—without “a good quantitative picture of its customer, markets, and competitors”—and you will see an aimless, ungrounded company where “priorities are set with the most byzantine of political maneuvering.” So data matters and helps objectify things.

But what they are against is “wrong-headed analysis, analysis that is too complex to be useful and too unwieldy to be flexible, analysis that strives to be precise (especially at the wrong time) about the inherently unknowable.” And, perhaps above all, they point out that they “deplore the unfortunate abuse of the term ‘rational.’” For:

Rational means sensible, logical, reasonable, a conclusion flowing from a correct statement of the problem. But rational has come to have a very narrow definition in business analysis. It is the ‘right’ answer, but it’s missing all of that messy human stuff, such as good strategies that do not allow for persistent old habits, implementation barriers, and simple human inconsistencies.

They also point out that the “soft stuff” is simply “the province of the ‘art’ factor in management.” Quantification of these things is difficult—and maybe not even useful, but “the factors can certainly be considered sensibly, logically, and fairly precisely in the face of modestly well documented past experience.” For example, John Mitchell won’t let plants grow much beyond 1,000 people because “something just seems to go wrong when you get more people under one roof.” Is that merely art? More likely, it is “an enlightened version of sound reasoning, based on fairly precise recollection of experience.”

But why was the rational model so successful? Simply because it came right after the seat-of-the-pants model. Compared to that, it is miles ahead. The problem became when the analytical techniques became the dominant focus and “love of product” the pinch of salt.

One of the core effects of the over-professionalization of management has been that “managers don’t personally identify with what their companies do.” Managers became detached from the reason they were there—in the case of business, the love of product and the people they are there to serve.[3] I would argue that this is the central problem with the professionalization of the ministry as well—taking a detached approach to ministry, where style and analysis and segmentation are given priority over loving people and loving God’s word. It is not that style and analysis and even segmentation are bad. It’s that they need to be kept the tablespoon, and affection for the reason for ministry—God and people—the point.

What has proven especially interesting is that this scientific approach to management ended up being one of the core reasons that America fell behind the Japanese in the 80s. The competitive advantage of the Japanese was not a more rigid approach or even automation. Rather, it was

that they developed a ‘people’ approach to the manufacturing of cars….They have a work force that’s turned on, willing to work, and is excited about making cars….We have a different basic productivity position in this country, and it’s because of a lot of minutiae. It’s not the sort of thing that can be corrected by investment policy.[4]

The analytically detached approach to management leads to a lack of love for people. As Steve Lor put it, “American managers are too little concerned about their workers.” When you fail to value people as the ultimate value and source of value creation in the company, you lose focus on what really makes a company effective. So it’s no wonder that the scientific approach to management undercut itself.

Thus, Peters and Waterman argue that “treating people—not money, machines, or minds—as the natural resource may be the key to it all. Kenichi Ohmae, head of McKinsey’s Tokyo Office, says that in Japan organization and people (in the organization) are synonymous. Moreover, the people orientation encourages love of product and requires modest risk taking and innovation by the average worker.”[5]

So the rational approach to management lacked proper focus on product and people—the two most important things for a company. And this resulted from “the simple presence of a focus on something else”—namely the “analysis from corporate ivory towers and overreliance on financial sleight of hand, the tools that would appear to eliminate risk but also, unfortunately, eliminate action.”[6]

Peters and Waterman are arguing for a major paradigm shift in management. Thus, it is helpful to understand all together the core attributes of the old model—which they regard “as a direct descendant of Frederick Taylor’s school of scientific management”—and then outline the attributes of the new model.

They summarize the attributes of the old model—and this builds on what we’ve seen above—as follows. The old model holds:

• “Bigger is better because you can get economies of scale.”
• “When in doubt, consolidate things; eliminate overlap, duplication, and waste.” And, “as you get big, make sure everything is carefully and formally coordinated.”
• Focus on cost in the final analysis, because “low-cost producers are the only sure-fire winners.”
• “Analyze everything.” Since you can genuinely avoid “big dumb decisions” through things like market research, discounted cash-flow analysis, and budgeting, apply these things in massive quantities. You should even apply these things to “risky investments like research and development.”
• “Forget that the course of invention is, by definition, unpredictable.”
• “Get rid of the disturbers of the peace—i.e., fanatical champions. After all, we’ve got a plan.”
• “”Control everything. A manager’s job is to keep things tidy and under control.” “Treat people as factors of production.” “Ensure that every possible contingency is accounted for.”
• “If we give people big, straightforward monetary incentives to do right and work smart, the productivity problem will go away.”
• “Inspect to control quality. Quality is like everything else—order it done.”
• “If you can read the financial statements, you can manage anything.”
• “Top executives are smarter than the market. Above all, don’t let quarterly earnings stop growing.”

But the conventional business wisdom doesn’t drive the engine of business today. “It does not explain most of what makes the excellent companies work.” It’s shortcomings are discussed next.

Weaknesses of The Rational Model

A Built-in Conservative Bias

The numerative, analytical component has a built-in conservative bias. This is because the buried weakness in the analytic approach is that “people analyze what can be most readily analyzed.” The things that are less readily analyzed—but which may be just as important—this get less attention.

It has often been argued that the professionalization of the ministry has done much harm to the ministry. I would agree, but add that the professionalization of management has also done much harm to management.

Cost-Driven Rather than Value-Driven

As a result, cost reduction takes precedence over revenue enhancement. This is because the numbers are hardest and most clear on the cost side of the equation. As a result, the priority is not to build value, but to control costs—which means that value is sacrificed.

Analysis also has no way of valuing the “extra oomph” of certain measures. For example, the Frito-Lay really took its customer service level to the point of overkill. They aimed for a 99.5% service. Whenever the analysts noticed this, they aimed to show how much Frito-Lay could save if it would reduce its commitment to service. And the analysts were technically right—it would save money. However, what they were overlooking was what doing this what subtract from the value side of the equation. The very extreme level of service commitment was a source of high moral for the ales force of 10,000 people. What would reducing this commitment and introduction of a tiny degree of unreliability do to this sales force-not to mention the retailers? Many things do not make sense in quantitative terms because all that is readily measured is the cost side of the equation.

Leads to an abstract and heartless philosophy

“The rationalist approach takes the living element out of situations that, above all, should be alive.”[7]

This is the same thing that John Steinbeck talked about. Steinbeck talks about the Mexican Sierra fish. It has 41 spines in the dorsal fin. If you catch a living one, “a whole new relational externality has come into being—an entity which is more than the sum of the fish plus fisherman.” But if you want to count the spines on the fish apart from the inconvenience of this external reality, you have to “sit in a laboratory, open an evil-smelling jar, remove a stiff colorless fish from the formalin solution, count the spines and write the truth.” And when you do this:

There you have recorded a reality which cannot be assailed—probably the least important reality concerning either the fish or yourself….It is good to know what you are doing. The man with this pickled fish has set down one truth and recorded in his experience many lies. The fish is not that color, that texture, that dead, nor does he smell that way.[8]

To be narrowly rational is often to be negative

Peters quotes Drucker to make this point: “Professional management today see itself often in the role of a judge who says ‘yes’ or ‘no’ to ideas as they come up ….A top management that believes its job is to sit in judgment will inevitably veto the new idea. It is always ‘impractical.’” And as John Steinbrenner has noted: “It is inherently easier to develop a negative argument than to advance a constructive one.”

George Gilder in Wealth and Poverty makes the point hat “creative thought requires an act of faith.” If you are narrowly rational, however, you will be unwilling to take—or entertain—such a leap of faith. As a result, many great ideas will never be tried. Gilder gives example after example of this principle, even pointing out that even back when we built the railroads, they “could hardly be justified in economic terms.”

This version of rationality does not value experimentation and abhors mistakes

The conservatism inherent in this approach leads to inaction and eliminates the process of “trying a lot of stuff and building on what works.” The only alternative is “the big product launch.” This makes the company dependent upon “one home-run product, with every bell and whistle attractive to each segment.” But in the meantime, the companies that have proceeded “irrationally” have introduced several new products during the same period, and learned from each, so that they can incorporate more real-time feedback from the marketplace into their future products.

It is ironic that the predecessor of this version of rationality was called scientific management, because “experimentation is the fundamental tool of science.” So you would have expected that scientific management and its successors would make use of experimentation and trial and error rather than punishing mistakes.

Anti-Experimentation Leads to Over Complexity and Inflexibility

The result of over complexity is “the immobilization of the group with countless small decisions.”

The rationalist approach does not celebrate informality

The focus is on analyzing, planning, telling, specifying, and checking up. There is little room for interacting testing, trying, failing, learning, shifting direction, adapting, modifying. But it is these latter words that they heard most often among the excellent companies. The excellent companies, info act, went out of their ways to create things like extra conference rooms simply “to increase the likelihood of informal problem solving among different disciplines.” One company sponsored al sorts of clubs in order to enhance interaction; others spent a lot on transportation systems “just so people will visit one another.” Let people interact informally, and more problems will be solved.

The rational model causes us to denigrate the importance of values

“We have observed few, if any, bold new company directions that have come from goal precision or rational analysis.” They do believe that the excellent companies of solid analytical skills, but they believe that “their major decisions are shaped more by their values than by their dexterity with numbers.”

“The top performers,” they write, “create a broad, uplifting, shared culture, a coherent framework within which charged-up people search for appropriate adaptations. Their ability to extract extraordinary contributions from very large numbers of people turns on the ability to create a sense of highly valued purpose. Such purpose invariably emanates from love of product, providing top-quality services, and honoring innovation and contribution from all.”

But this type of higher purpose is “inherently at odds with 30 quarterly objectives, 25 measures of cost containment, 100 demeaning rules for production-line workers, or an ever0-changing, analytically derived strategy that stresses costs this year, innovation nest, and heaven knows what the year after.

In other words, you cannot be led both by values and detailed rules. These two approaches to leadership are mutually incompatible. For if you specific objectives and rules and measures in great abundance and detail, there is little room for the human judgment to operate, which is where values make their application.

There is little place for internal competition

That’s because it appears inefficient. But the excellent companies were filled with internal competition. Peer pressure was a much stronger motivator than orders from the boss. Sure, this is messy and seems less efficient, but the result of the divisions overlap, product-line duplication, and multiple product development teams was greater innovation and improvement.

The costs saved by eliminating duplication and messiness can indeed be measured, and thus make it appealing to go the rationalist direction. But this is simply the numerative bias, where what is more easily measured is given the greater emphasis. The “analyze-the analyzable bias” is failing to account for the incremental benefits that come from a “steady flow of new products developed by zealous champions” and the “increment of productivity gains that comes from continuous innovation by competing shop floor teams.”[9]

“Many otherwise smart and business-savvy people are operating from a theoretical base that is simply out of date.”[10]

People are not just a pair of hands and the managers should not be the ones with all the thinking and all the control.

“The old management theories were attractive because they were straightforward and not laden with ambiguity or paradox. On the other hand, the world isn’t like that.”[11]

“The new wave of management thought leads us to an ambiguous, paradoxical world—just like the world of science.”[12] The key is that you need to be willing to acknowledge the existence of paradox and ambiguity, and know how to manage them.

A Better Model

Assumptions Behind the Better Model

The right model recognizes certain things about the (sometimes paradoxical) nature of human beings and seeks to accord with those things rather than fight against them. In other words, it realizes that we should deal with human nature as it is, not as we think it should be.

The right model also recognizes certain things about the nature of reality and seeks to accord with those rather than fight against them.

The characteristics of the right model flow, then, from these two sets of beliefs: beliefs regarding the nature of reality, and beliefs regarding the nature of human beings. The wrong model, on the other hand, simply goes against the nature of reality and the nature of human beings. It tries to change people rather than its model.

The beliefs regarding the nature of reality include:

1. The world is complex and often ambiguous
2. Often the best way to navigate ambiguity is to feel your way forward
3. Not everything that is important can be measured analytically; numerical analysis, for example, often has no way of valuing the “extra oomph”

Peters argues that the excellent companies were effective in creating both commitment and regular innovation from their workforces (many times even from tens of thousands of people) because they took into account the paradoxes that are built in to human nature.

The beliefs regarding human nature include:

1. Humans are made in the image of God and therefore ought to be respected
2. Even though fallen, people still have incredible potential; this is even more true in regard to those who have been redeemed.
3. We are very limited in our ability to know the future, let alone control the future. This is good and part of how we are designed.
4. People are emotional as well as rational, and this is good.
5. People like to think of themselves as winners, and this is good.
6. We reason by stories at least as often as by good data, and this is good.
7. We can hold very little explicitly in our conscious mind at once, but our long-term memory can accumulate a vast storehouse of patterns.
8. We respond to external rewards and are also strongly self-motivated.
9. We need to be a part of something greater than ourselves and also need independence.

From these basic assumptions, certain characteristics of a more human approach to management arise. They include the following.

Characteristics of the Properly Professional Model

Realize that Beliefs are at the Core of Effective Organizations

Thomas Watson

Provides transcendence.

Realize that Truly Great Innovations are Often the Result of a Sloppy and Ambiguous Process

Science itself has a very messy road to progress. Peters quotes Robert Merton, “a respected historian of science”: “the [textbooks] on methods present ideal patterns, but these tidy, normative patterns…do not reproduce the typically untidy, opportunistic adaptations that scientists really make. The scientific paper presents an immaculate appearance which reproduces little or nothing of the intuitive leaps, false starts mistakes, loose ends, and happy accidents that actually cluttered up the inquiry.”[13]

The story of the IBM 360 is another excellent example here. Most of us today don’t even know what the 360 was (other than that it was a breakthrough computer developed by IBM), but it is “one of the grand product success stories in American business history.” Yet, “its development was sloppy. the chairman of IBM, Thomas Watson, Sr., thus asked vice-president Frank Cary to “design a system to ensure against a repeat of this kind of problem.” Cary did so. But when he became chairman years later, one of his first acts was to get rid of that system which he had developed. He noted: “Mr. Watson was right, it [the product development structure] will prevent a repeat of the 360 development turmoil. Unfortunately, it will also ensure that we don’t ever invent another product like the 360.”

Organize for Fluidity, Which is the Administrative Version of Experimentation

The response to complexity should be fluidity. Don’t over-organized. Fluidity is “the administrative version of experimentation.” Be willing to re-organize whenever you need. Put resources on the problem that needs fixed. And communicate through the most effective channel when getting things done—not the organizational chart.

Recognize that the Final Decision is Often One of Taste

Peters points out that “management has at least as much to do with pathfinding and implementation as it does with decision making [which is the focus of the rational model]. The processes are inherently different, but they can complement and reinforce one another.”

“Pathfinding is essentially an aesthetic, intuitive process, a design process.” A multitude of alternatives can be posed for any design problem, whether an architectural design or the guiding values for a business. Within that multitude, many ideas aren’t so great—and the rational approach can help you sort that out. But a large umber will still remain of good ideas, and “no amount of analysis will choose among them, for the final decision is essentially one of taste.” And that’s OK. It brings in the emotional element.

Take Risks and Experiment

This means accepting mistakes.

Be Value Driven Rather than Cost Driven

Be Human—Affirm the Role of Passion and Emotion

Humans are not only rational, and not everything that matters can be measured.

The goal is not detached, analytical justification for all decisions. Do not take the living element out of situations that ought to be alive.

Insight over analytical detachment

Affirm the emotional side of human nature.

Celebrate Informality

Talk to who you need to in order to get the job done, rather than going up and down the org chart. Make sure all the relevant people are informed, which often would include many people along the org chart, but run through those channels to get the work done when it is most efficient to talk directly to the person you need.

Do Not Let Revenue Enhancement Take a Back Seat to Cost Reduction

Do not focus on cost in the final analysis. Do not be afraid of waste, overlap, and duplication either.

Do not be afraid of inefficiency if it is part of the essential process for becoming effective and generating useful innovation and missional advancement which simply would not be possible otherwise.

Realize that there is a Conflict between Being Led by Values and Having Detailed Rules

“Ability to extract extraordinary contributions from very large numbers of people turns on ability to create a sense of highly valued purpose. This purpose is inherently at odds with 30 quarterly objectives, 25 measures of cost containment, and 100 demeaning rules for production workers.”

Be Doing Things

“Doing things is the hallmark of the well-run company.

Build Mechanisms of Forward Progress

Affirm the Emotional Dimension

Approaches to management that assume that humans are merely or only rational will always run up against how human nature really is. As Tom Peters writes, “the central problem with the rationalist view of organizing people is that people are not very rational.”[14]

We need to appeal to the emotional dimension of people just as much as to the rational. Which means that not everything has to make logical sense. For example, if we can make a very logical and analytical case as to why running all Windows computers and Windows collaboration tools makes incredible sense, but people wouldn’t want to use it, then the strength of our analytical case doesn’t matter.

Let people use what they want, because what matters is creating good will, enhancing moral, and enabling people to have the tools that work best for them. The result will be greater productivity and development of our people—something that fixation simply on the cost side does not reveal.

This also has implications for what we do externally as well. For example, having a decent logo and graphic look is not simply a nice optional extra. Rather, it is a matter of accurately reflecting what we do in the emotional dimensions of look and feel. It is thus a way of connecting with people emotionally, of creating emotional engagement with the people we serve. This is certainly not the only, or even primary, way of doing this, but if we take a holistic view, it matters.

See People as Winners and Trust Them

You often hear about the surveys where 70% of people rate themselves as being in the top 10% of the population in their ability. This is often followed up with the observers of this fact turning up their noses at how inaccurate most people are in assessing their abilities.

But maybe the joke is on the folks who turn up their noses. What these studies show is that people like to think of themselves as winners. As Peters puts it, “We all think we’re tops. We’re exuberantly, wildly irrational about yourselves. And that has sweeping implications for organization.”[15]

In contrast to this, though, most organizations tend to take a negative view of their people. They create detailed regulations that reflect a default distrust of their people; they focus more on overcoming weaknesses than building on strengths; and they “design systems that seem calculated to tear down their workers’ self-image.”

That’s not how we think here. Our fundamental belief is that our people are capable of incredible things and can be trusted. While not everyone is equally talented in the same area, everyone is incredibly talented in some area. It is our role to help people identify what they are best at and enable them to do what they do best every day. This both develops people and furthers the mission of the organization.

And, interestingly, a high view of one’s abilities and potential is actually self-fulfilling. It turns out that realism doesn’t drive performance. (And as a result, you have to question just how “realistic” it actually is.

Marcus Buckingham details several studies that have been done on this. Buckingham summarizes this very well, so I’m going to quote him at length:

Conventional wisdom tells us that self-awareness is a good thing; that people who have a realistic assessment of their strengths and weaknesses outperform those whose assessments are inflated; that, in short, unrealistic self-confidence leads to a fall. Hence the widespread use of 360-degree surveys to reveal to an employee how her peers, direct reports, and supervisor perceive her performance.

In this case, however, conventional wisdom is misguided. Current research suggests that accurate self-awareness rarely drives performance, and that in many circumstances, it actively retards performance. Only self-assurance drives performance, even when this self-assurance turns out to be unrealistic.

Very interesting—self-assurance drives performance even when it is unrealistic. Buckingham continues:

For example, researchers from a number of different universities have conducted studies in which they asked children from lower socioeconomic segments of society whether they thought they were likely to get into college. Objective data revealed that these children, with their disadvantaged status, actually had a slim chance of making it through school, let alone gaining admission to college. Those children who thought they didn’t have the ability to go to college, who were, in this sense, realistic in their self-assessment, ended up performing in line with their assessment—very few of them made it to college.

Conversely, a significant percentage of those children who thought they had what it took to make it to college, who were unrealistically optimistic, actually wound up getting in. Realism hindered performance, where unrealistic self-assurance fostered it.[16]

It may seem inaccurate to suggest that being unrealistically optimistic is a good thing. Is that even truthful? Here’s the thing: the so-called “realistic” perspective is assuming things that we do not actually have the right to assume. It doesn’t matter what the environment is; the fact is that the environment and these other factors are not determinative. You cannot really know what is realistic for any individual before it actually happens. It is actually the “realistic” view which is failing to be faithful to the truth, because its “realism” is based on an assumption that we have more truth than we actually do.

In our systems and management approach at Desiring God, this means that our aim ought not be to give people this so-called realistic perspective. We will not make a virtue of accurately understanding all of people’s flaws (often called “areas of opportunity” in conventional HR language) and try to knock people down to the so-called “realistic” perspective. This so-called accurate self-assessment is not actually that accurate (since it is proven wrong by those who don’t hold to it) and actually hinders performance. Our aim is to create systems and have a mindset that has confidence in our people and encourages them to attempt big things—things that are even bigger than many might think are realistic.

Now, this doesn’t mean that “blithe overconfidence is the secret to a person’s success” (104). Buckingham brings in another study to show this. He points out how lately much educational material has been redesigned to be more “fun,” relevant, and accessible to kids. It uses educational shows and video games and other game-like stuff. But it turns out that these programs don’t teach very much. A study published in the Journal of Educational Psychology noted that children invested “high cognitive effort and learned much from instructional media they considered difficult,” but “invested less effort and learned less from the same information conveyed by media they believed to be easy.”[17]

This shows us that, while people ought to have high confidence in their ability to be up to the task, they must also recognize the inherent challenge of the task. Self-assurance does not mean thinking that the task is easy; it means confidence in God’s grace and gifting to you to enable you to be up to the task.

As managers, then, this means that our goal should be to build each employees self-assurance—not self-awareness per se—while making sure they have a high appreciation for the challenge of the big tasks that are before them.

Another implication is for our systems design. Don’t design systems that set most people up to lose. For example, we shouldn’t design our performance management system to render 60% of our people a failing result. Tom Peters explains this well:

The message that comes through so poignantly in the studies we reviewed is that we like to think of ourselves as winners. The lesson that the excellent companies have to teach is that there is no reason why we can’t design systems that continually reinforce this notion; most of their people are made to feel that they are winners. Their populations are distributed around the normal curve, just like every other large population, but the difference is that their systems reinforce degrees of winning rather than degrees of losing.[18]

In contrast, the not-so-excellent companies in Peters’ study did the reverse. In one company, only 40% o the sales people were able to meet their quotas. He notes that “with this approach, at least 60 percent of the salespeople think of themselves as losers. They resent it and that leads to dysfunctional, unpredictable, frenetic behavior. label a man a loser and he’ll start acting like one.”

The way you view people is often self-fulfilling. If you view people as effective people with great potential who can be trusted, most of the time they will fulfill those expectations. This, in turn, builds their sense of self-efficacy (different from self-esteem) and results in an increasing spiral of upward performance. “People live up to the expectations of them.”[19]

People want to be treated as whole people. They “want to contribute to the accomplishment of worthwhile objectives. They want to be part of a mission and enterprise that transcends their individual tasks. They don’t want to work in a job that has little meaning, even though it may tap their mental capacities. They want purposes and principles that lift them, ennoble them, inspire them, empower them, and encourage them to their best selves.”[20]

On the other hand, if you distrust people and put their ability to perform under a cloud of suspicion, then you will often get underperformance.

Treat people as high performers and set up systems that will highlight their ability to perform, and you will get high performance.

Allow for the Intuitive—for the Role of Judgment

Peters points out that even when it comes to science, logic is not the true engine of progress. He notes how James Watson, co-discoverer of the structure of DNA, described the double helix: “It’s so beautiful, you see, so beautiful.” peters notes: “In science the aesthetic, the beauty of the concept, is so important that Nobel laureate Murray Gell-Mann was moved to comment, ‘When you have something simple that agrees with all the rest of the physics and really seems to explain what’s going on, a few experimental data against it are no objection whatsoever.”[21]

This is not just a fact to reckon with, it is a good thing. It is a good thing because it aligns with reality. Reality is more than rational; therefore our ways of processing reality should be more than emotional as well.

This means that, while data is critical, we also need to allow people to trust their gut and reason intuitively. This is how people work, anyway, and will enable us to sync up more effectively with the non-rational (note: note anti-rational) features of reality. With beauty.

And leaving room for the intuitive is also essential for solving complex problems. In a world of such complexity, we must “reason with simple decision rules,” utilize our pattern recognition (which is what ones “gut,” or intuition, really is), and have ways of “sorting through the infinite minutiae out there,” which involves starting with heuristics—associations, metaphors, and ways that have worked for us before.”

Keep Things Simple but Affirm the Complexity that Intuition Recognizes

Since people can only hold in their conscious mind about 6-8 things at once, things need to be kept simple. This means we should only have a small number of top-level priorities in the organization. This focuses our efforts better anyway, but also ensures that everyone in the organization can thus keep them in mind and work toward them—so you get greater organizational effort pushing in the direction of your priorities when there are just a few.

When it comes to personal performance planning as well, each person should have a manageable number—usually at most 6 per quarter. And so forth.

The limitation of our working memory, however, is not the whole story. In our long-term memory, we can store a vast array of knowledge and patterns. If short-term memory is the size of a coffee cup, our long-term memory is the size of the Milky Way. The knowledge and patterns of long-term memory can be brought to mind often at a moments notice. This often comes out most of all as intuition—we sense that something is a certain way or ought to be different, because it is out of sync with our collection of patterns. The more experience and knowledge one has, the more accurate their intuition. Hence, we need to leave a place for intuition in the mix of our decisions, and not default to a reliance on data alone. We need to exercise judgment, not simply let data make decisions for us.

Sometimes the Efficient Way is Not the Best Way

Many things that appear more efficient—for example, eliminating duplicating and standardizing roles—actually undermine the engines of growth, innovation, and progress.

Use Positive Reinforcement

The primary motivation should be intrinsic, but there is also a role for extrinsic motivation. In general, extrinsic motivation should occur in the form of positive reinforcement rather than negative reinforcement.

Peters the general findings of research when he notes that there is an asymmetry between positive and negative reinforcement. “In short, negative reinforcement will produce behavioral change but often in strange, unpredictable, and undesirable ways. Positive reinforcement causes behavioral change too, but usually in the intended direction.”[22]

So negative reinforcement often produces change in unpredictable and undesirable ways. Further, negative reinforcement does not tend to guide. It shows you what not to do – and there is a place for that – but it doesn’t show you what to do. So you often don’t know how to improve when negative reinforcement has been applied. We’ve all heard examples of this. Peters gives the example of getting punished for not treating a customer well. The person in that case might respond by simply avoiding customers altogether—for that would be just as effective in avoiding future punishment as many other means. If we say “that’s not rational,” we are forgetting that people are not entirely rational, and that’s OK. We need to deal with people as they are, not as we think they should be. Further, in one sense it is rational. What is really going on here is that “customer” per se is being associated with punishment, rather than “treating customers badly.”

A way of improving how people treat customers that would coincide with positive reinforcement would be praising an employee when you see them go the extra mile for a customer, or even simply acknowledging the worth of the common courtesy that they show to each customer.

Another benefit of positive reinforcement is that it seems to create greater ability to change. Instead of simply yanking bad things off one’s agenda, which can be a real battle, it pushes new and better things onto the agenda. By default, less important things then have to fall off the agenda. This is really another way of saying, in other words, that the way to get a “no” off the agenda is to put in place a better “yes.” The use of positive reinforcement “goes with the flow rather than against it.”

Here is an important implication: If you manage primarily by authority, rather than influence and respect, you are relying on negative reinforcement. The notion of the manager primarily as a “boss” who issues orders that must be done is at root a notion of negative reinforcement—namely, that if you don’t do what the manager says, bad things will happen to you. “The threat of punishment is the principal implied power that underlies it all.”[23] “To the extent that this underlying notion prevails, we are not paying attention to people’s dominant need to be winners.”

Positive reinforcement is most effective when it is specific, immediate, achievable, and when a fair amount of it is intangible.

Primarily Seek Intrinsic Motivation

While external motivation has a place, the most effective form of motivation is intrinsic motivation. You foster lasting commitment to a task by creating conditions that build intrinsic motivations. This  comes from tapping the inherent worth of the task as a source of intrinsic motivation. It also involves being seeing the connection between the task and the values of the individual and organization.  

Realize that People Often Act Their Way into Commitment

People often act their way into commitment rather than commit their way into acting. Hence, one way to help build commitment to a task is to start involving people in small ways, and building from there.

As a corollary of this, many of the excellent companies found that they actually acted their way into many of their strategies.

Make Meaning

This was a very interesting observation by Peters:

Perhaps transcendence is too grand a term for the business world, but the love of product at Cat, Bechtel, and J&J comes very close to meriting it. Whatever the case, we find it compelling that so many thinkers from so many fields agree on the dominating need of human beings to find meaning and transcend mundane things. Nietzsche believed that “he who has a why to live for can bear almost any how.” John Gardner observes in Morale, “Man is a stubborn seeker of meaning.”

The best business experts are realizing what Christians have known all along: people seek meaning. This is an innate part of how God created us. And we know that ultimate meaning is found in him.

Secure in Christ, so not threatened by structural changes and etc.

Finally, the principle-centered leadership paradigm acknowledges all of the dimensions of man. It deals with fairness, kindness, efficiency, and effectiveness. “We work with the whole person.”[24] People are not just assets, “not just economic, social, and psychological beings. They are also spiritual beings; they want meaning, a sense of doing something that matters.”[25]

PCL recognizes that “people do not want to work for a cause with little meaning, even though it taps their mental capacities to their fullest. There must be purposes that lift them, ennoble them, and bring them to their highest selves.”[26]

What provides meaning?

• Beliefs. True beliefs. The task connects to a bigger picture and makes a difference.
• Intrinsic worth of the task. You like it and see the value in it.
• Proper motivation: doing your work unto the Lord.

Give People a Measure of Control

Accords with human nature. It is right to give people a measure of control over their work. This accords with the fact that they are in the image of God and is a matter of respecting the individual. In fact, it may be the fundamental implication of respect for the individual: let people have as much control as possible.

This is not only right, but also results in greater effectiveness. Psychologists, for example, have studied the concept of individual control and found that “if people think they have even modest personal control over their destinies, they will persist at tasks. They will do better at them. They will become more committed to them.”[27]

Story of factory changing things, and found that what really made the difference was simply the awareness that they were being paid attention to. Also the “shut off the noise button”—the group that had it performed better even though they never used it.

Implication: push authority as far down as you can, even when the economics seem to favor consolidation.

Give people the opportunity to stick out, “yet combine it with a philosophy and system of beliefs…that provide the transcending meaning—a wonderful combination.”[28]

Trust People

This is what frees you to give people a measure of control. People can be trusted. Accords with human nature and respect. Not to trust people is not to respect them. Some jobs maybe need to have an innate distrust, but not management.

A Biblical Perspective on This

The rational model assumes that we have more control than we really do and more knowledge than we really do. In other words, it has too high a view of man and too low a view of God. Further, God does not seem to value efficiency in the same way.

As a result, cost reduction takes precedence over revenue enhancement. This is because the numbers are hardest and most clear on the cost side of the equation. As a result, the priority is not to build value, but to control costs—which means that value is sacrificed.

Management is a form of ministry because it is a matter of serving people. It serves them in relation to their immediate role in the organization, helping them to become more or less effective, and it also has spillover effects into the rest of their lives.

Therefore, we ought to want our organizations to be well managed. Managing well — and developing management systems that help people be more effective — means having a correct understanding of the nature of management. This understanding must, in turn, be based on a correct understanding of people and how God made them.

A correct understanding of management means understanding at least five main guiding philosophies of management. These philosophies guide how we think about management at Next and how we have developed every management system we have, especially the specific management systems throughout this particular section. These five principles are as follows.

1. People are made in the image of God

The central question of management, in my view, is this: what does it look like to understand management in light of the supremacy of God in all things? In other words, we should ultimately understand management within a God-centered, theological context. While fleshing that out in detail is outside the scope of this brief paper, we need to begin tracing that out a bit here.

The key to understanding management within a God-centered, theological context lies in the fact that people are in the image of God. This reality has significant implications for how we ought to treat people. We cannot act as though the realm of management and organizations is segregated from the rest of life, as though the image of God has implications for personal relationships but not organizational ones.

At root, I would argue that the image of God in man implies three things for management. First, it implies the importance of respect for the individual. We need to manage in a way that treats people as humans, not factors of production.

Second, it implies that we should manage in a way that creates and supports freedom over control. We should trust people and let them do their jobs. The manager is not primarily a supervisor, but a source of help and someone who makes sure that the necessary systems and structures are in place that will enable the person to thrive.

Third, it implies that we should respect individuality. Everyone is unique, and this is a good thing. It should be respected and harnessed, not something we should work against.

2. Each person’s talents are enduring and unique

Talents are distinct from knowledge and skills. Talents are “recurring patterns of thought, feeling, and behavior that can be productively applied.” Our talents are given and innate; they probably come from a combination of nature and nurture (both through the hand of God), but whatever their secondary causes, they are mostly fixed by early in life. Consequently, our talents are enduring, fundamental features of our personality that do not change.[1]

Because talents are enduring, the role of the manager is not to try to shape and correct how people were made. But this is exactly what conventional wisdom tries to do. As Marcus Buckingham points out, buttressed by the belief that people can change in any way they want if they just try hard enough, conventional wisdom says that “anyone can be anything they want to be if they just try hard enough. Indeed, as a manager it is your duty to direct those changes. Devise rules and policies to control your employee’s unruly inclinations. Teach them skills and competencies to fill in the traits they lack. All of your best efforts as a manager should focus on either muzzling or correcting what nature saw fit to provide.”[2]

Instead of shaping and correcting how God made the person, instead managers should accept how He made them. They should recognize that “there is a limit to how much remolding they can do to someone” and not focus on making people into something that they are not. Further, instead of bemoaning the fact that people’s talents and fundamental personality are enduring, they should capitalize on this. That is what great managers do — they capitalize on the uniqueness of each individual rather than trying to change it.

Another implication of the fact that talent is enduring is that you need to hire people on the basis of talent (defined in this sense — not in the sense of “a very gifted individual”) rather than first skills or experience. Knowledge and skills can change and be added to; but talent cannot be changed, and therefore you have to hire it in. As with the theatre, “the secret is in the casting.”

3. Each person’s greatest room for growth is in the areas of his or her greatest strength[3]

This follows from the fact that talents are enduring. Conventional wisdom, on the other hand, says that we should grow by fixing our weaknesses. This belief is so prevalent that it is even built in to the language—for example, one’s weaknesses are often labeled “areas of opportunity.”

But when you realize that talents are enduring, this doesn’t make sense. Now, a person might be weak in an area simply because of lack of knowledge; the underlying talent might be there, and it just needs knowledge and skill added to be turned in to a strength. But when the underlying talent is not there, no amount of knowledge or skill will make the person strong in that area. Focusing efforts on such a weakness will yield little results compared to the effort.

Further, focusing on weakness is demotivating — it is not motivating to have to continually turn your attention to what weakens you. Focusing on a person’s strengths, however, yields great results and is motivating. To motivate a person and help them grow most effectively, you have to focus on their strengths.

4. The purpose of the manager is to unleash each employee’s talents for the performance of the organization

This follows from the fact that talent is enduring and therefore the manager must capitalize on how each individual is unique. The manager plays a catalyst role. Employees have the ability to contribute, and the organization has aims it needs to achieve. But the connection between an individual’s potential and the organization’s goals is not always automatic; and even when it is, it needs to be sped up. This is the role of the manager.

Further, his catalyst role of the manager — speeding up the reaction between the employee’s talents and the organization’s goals — is essential in powering the performance of the organization. Therefore, the role of the manager is critically important. It is not the case that “it is the work of leadership” that really matters, and that managers are simply mini-executives waiting for the truly important work of leadership to be thrust upon them. Rather, the roles of the manager and leader are different and both are critical.[4] We need effective leaders and effective managers. And while it is possible for the same person to excel in both, it is not necessary. Managers do not need to feel the pressure to be leaders, and leaders do not need to feel bad if they are not strong at the management role.[5]

5. This catalyst role of the manager is played most effectively by turning four keys

These four keys are: selecting for talent rather than just experience and skills, setting expectations by defining the right outcomes rather than detailing the steps, motivating by focusing on strengths rather than weaknesses, and developing people by finding the right fit rather than simply the next rung on the ladder.

These four keys correspond to four systems that we develop in other documents in this section:

1. Strengths-based hiring [link]
2. Strengths-based quarterly performance planning [link]
3. Annual strengths interview [link]
4. Career discovery [link] and role tweaking [link]

[1] Note: I am not saying that moral change and sanctification is not possible, of course. I am talking about the non-moral features of our personality. These features can be used for sin or righteousness, of course, but in themselves are simply basic, good features of creation. And this insight that talents are recurring is not unique to Buckingham and the Gallup study they did. Lloyd-Jones himself said “when we become Christians, the fundamental features of our personality do not change.” Our values, goals, and treasure changes; but the features that God designed in do not—they are not intended to.

[2] First, Break All the Rules, 56.

[3] These second and third principles are articulated best in Marcus Buckingham’s book Now, Discover Your Strengths, pp. 5-10.

[4] Marcus Buckingham has some excellent words on this that are worth quoting at length: “Conventional wisdom tells us that the manager role is no longer very important. Apparently managers are now an impediment to speed, flexibility, and agility. Today’s agile companies can no longer afford to employ armies of managers to shuffle papers, sign approvals, and monitor performance. They need self-reliant, self-motivated, self-directed work times. No wonder managers were first against the wall when the reengineering revolution came.

“Besides, continues conventional wisdom, every ‘manager’ should be a ‘leader.’ He must seize opportunity, using his smarts and impatience to exert his will over a fickle world. In this world, the staid little manager is a misfit. It is too quick for him, too exciting, too dangerous. He had better stay out of the way. He might get hurt.

“Conventional wisdom has led us all astray. Yes, today’s business pressures are more intense, the changes neck-snappingly fast. Yes, companies need self-reliant employees and aggressive leaders. But all this does not diminish the importance of managers. On the contrary, in turbulent times the manager is more important than ever.

“Why? Because managers play a vital and distinct role, a role that charismatic leaders and self-directed teams are incapable of playing. The manager role is to reach inside each employee and release his unique talents into performance. This role is best played one employee at a time: one manager asking questions of, listening to, and working with one employee. Multiplied a thousandfold, this one-by-one-by-one role is the company’s power supply. In times of great change it is this role that makes the company robust—robust enough to stay focused when needed, yet robust enough to flex without breaking” (First, Break All the Rules, pp. 58-59).

[5] Marcus Buckingham does a good job explaining the main difference between the role of the manager and of the leader in his book The One Thing You Need to Know. He notes that the role of the manager is to turn talent into performance. He does this by recognizing what is unique about each individual and capitalizing on it. The role of the leader, on the other hand, is to rally people to a better future. The leader does this by recognizing what is universal to everybody and capitalizing on that. The functions of managers and leaders also differ, as John Kotter has explained very effectively in his article “What Leaders Really Do.” Managers decide what needs to be done by planning and budgeting. Leaders, on the other hand, decide what needs to be done by setting direction. Managers develop the capacity to achieve by staffing and organizing. Leaders develop the capacity to achieve by aligning people. And finally, managers ensure that things have been done by monitoring and controlling (in the sense of comparing results to actual, not in the negative sense of control), whereas leaders do this by motivating people to persevere through obstacles. The role of the leader is looser, whereas the role of the manager is tighter and more directly involved.

We have seen that the role of the manager is important and critical because managers serve a catalyst role in turning talent in to performance. We will look at the specific tools through which managers do this shortly. At this point we are going to look at another critical result of effective management: creating a strong work environment.

What is a Great Work Environment?

Every organization, including Next, aims to be a “great work environment.” These are not simply lofty words that have no real meaning. On the contrary, to say that an organization has a great work environment is actually another way of saying that the organization has high employee engagement and that it is a strong workplace. In other words, a “great work environment” is not a fluffy term with no substance. It means having a workplace with high engagement.

Having “employee engagement” in an organization means that people are emotionally connected to their work. It matters to them. They care about it. And therefore they are willing to put in the extra effort between compliance and commitment which is the key to any organization’s effectiveness.

Great Work Environments are Built

Having employee engagement and a strong workplace doesn’t have to simply be left to good intentions and wishful thinking. There are specific things that you can do to build these things into your organization. Strong workplaces are built.

A strong workplace not only can be built, but must be built. It must be built first of all because it serves the employees. Since management is a form of ministry and is about developing people through tasks, rather than merely getting things done through others, it matters whether the workplace is an environment where people are engaged in what they are doing. A strong workplace must also be built because it is necessary to the health of the organization. The only way to advance the mission effectively is to “build the kind of work environment that attracts, focuses, and keeps talented employees.” That is, to create strong workplace where people are engaged in their work.

How to Create a Great Work Environment

The 12 Questions

But how do create and measure the strength of a workplace? The Gallup Organization did a multi-million dollar study on this question and identified that there are twelve core components to building a strong workplace. These components are captured in “Twelve Questions” to be asked of each employee. These questions “measure the core elements need to attract, focus, and keep the most talented employees.”[1]

What The 12 Questions Are

The 12 Questions are:

1. Do I know what is expected of me at work?
2. Do I have the materials and equipment I need to do my work right?
3. At work, do I have the opportunity to do what I do best every day?
4. In the last seven days, have I received recognition or praise for doing good work?
5. Does my supervisor, or someone at work, seem to care about me as a person?
6. Is there someone at work who encourages my development?
7. At work, do my opinions seem to count?
8. Does the mission/purpose of my company make me feel my job is important?
9. Are my co-workers committed to doing quality work?
10. Do I have a best friend at work?
11. In the last six months, has someone at work talked to me about my progress?
12. This last year, have I had opportunities at work to learn and grow?

These questions “are the simplest and most accurate way to measure the strength of a workplace” and are based on a multi-million dollar study by the Gallup Organization.[2]

The Structure of the Questions

In order to utilize them correctly, we first must understand their structure. As mentioned above, the role of the manager is to secure a “yes” from each of these questions. To do this, however, it must be recognized that the questions are hierarchical. That is, the order is important.

Buckingham calls the first two questions “base camp.” They ask: “What do I get?” They focus on having what you need. Questions 3-6 are camp 1, and ask: “What do I give?” They focus on individual contribution. Questions 7-10 are camp 2 and ask: “Do I belong here?”

Finally, questions 11-12 are camp 3 and ask: “How can we all grow? These questions are the most advanced stage—people want to make things better, learn, grow, and innovate. The important thing, however, is that you can only do these things after you have climbed the earlier stages—you must have the right expectations, confidence in your own expertise, and be aware of how your new ideas will be accepted or rejected by those around you before you can move up to the higher questions.

Why Disengagement Can Exist Even in Organizations with a Strong Mission

The reason that it is crucial to understand this hierarchical sequence is that “the longer your lower level needs remain unmet, the more likely it is that you will burn out, become unproductive, and leave. To be answering positively to camps 2 and 3 but negatively to the questions lower down is a very precarious positions. Deep down you are disengaged. You have mountain sickness—like if you just helicoptered to the last part of a climb. If you just jump in at camp 3 mountain sickness will sap your energy and slow your progress to a crawl.” (get exact quote.)

This is why things like mission statements, diversity training, self-directed work teams, continuous improvement, learning organizations, etc. were all well-conceived but withered. “They aimed too high, too fast. Managers were encouraged to focus on complex initiatives without spending time on the basics. If an employee doesn’t know what is expected of him as an individual (base camp), then you shouldn’t ask him to get excited about playing on a team (camp 2). Don’t helicopter in at 17,000 feet or your people will die on the mountain.”[3]

Hence, “the key to building a strong, vibrant workplace lies in meeting employees’ needs at base camp and camp 1. Focus your time and energy there, or everything else along the journey is irrelevant.”

The Role of the Manager

Manage in a Way that Leads to a Positive Answer to the 12 Questions (or at least the top 6)

The 12 Questions do not do anything on their own. Rather, they become effective in the hands of a companies managers.

The job of the manager is to secure a positive “yes” to all of these questions from each of his or her employees. As Buckingham writes, “if you can create the type of environment where employees answer positively to all questions, then you will have built a great place to work.” (As mentioned earlier, though, the most important thing is to meet people’s needs at base camp and camp 1—the first six questions—because they serve as the foundation for everything else.)

Why People Leave Companies with Strong Missions and Talented Leadership

What is so significant about this discovery is not simply the identification of the specific components that lead to employee engagement, but the realization of the critical role of the manager. For it is each employee’s manager that is most directly responsible for bringing about the conditions reflected in the 12 Questions.

This is so significant, in fact, that one of the most starling conclusions from the Gallup study is that people leave managers, not companies. Buckingham explains:

Our research yielded many discoveries, but the most powerful was this: Talented employees need great managers. The talented employee may join a company because of its charismatic leaders, its generous benefits, and its world-class training programs, but how long that employee stays and how productive he is while he is there is determined by his relationship with his immediate supervisor.[4]

So employee engagement serves the employee and the organization not only by making the work more satisfying and the employee more productive, but also by resulting in greater retention of talented employees. And it is the manager who plays the vital link in creating employee engagement.

Which sheds light on the importance of avoiding a truly unfortunate disconnect: an organization can have a compelling and meaningful mission, and even excellent leadership at the top, but if it lacks effective managers throughout the organization, people will be likely to be disengaged in their work and will leave. Worse, this can lead to disillusionment as the employee feels the disconnect in the experience “I love what this company stands for, but it is not doing me good to work here.”

The Four Keys for Building a Strong Workplace

But how do you secure positive answers to the top six questions (the top six, you’ll recall, are the primary focus)? Buckingham outlines four keys the manager turns in order to do this.

1. Selecting for talent (rather than first skills or experience)
2. Setting expectations by defining the right outcomes (rather than the right steps)
3. Motivating by focusing on strengths (rather than trying to overcome weaknesses)
4. Developing the employee by finding the right fit (rather than simply the next rung)

We have worked these four keys in to our management systems. They keys have been translated into our overall mindsets and five specific systems, each of which are outlined in their respective documents:

1. Strengths-based hiring [link]
2. Performance management, which consists of four systems:
   1. Strengths-based quarterly performance planning,
   2. The annual strengths interview
   3. Career discovery
   4. Role tweaking

Notes

[1] First, Break All the Rules, 28.

[2] For more details on this study and how these questions were arrived at, see First, Break All the Rules pp. 25-29.

[3] Note also that the 12 questions relate to the 4 critical roles of the manager. To secure “strongly agree” to question 3, for example, you must know how to select. Which means you must know difference between talent, skill, and knowledge and how to identify them in interviews. For questions 1 and 2, you must be able to set accurate performance expectations and know how to balance need for standardization and efficiency with the need for flair and originality. For questions 4 and 5, you must be able to motivate. And question 6 pertains to ability to develop people.

[4] First, Break All the Rules, pp. 11-12.

Why Managers Matter

We’ve seen that managers are critically important for several reasons.

First, managers are the key to helping each employee turn their talent into the most effective performance for the organization.

Second, managers trump companies. Even if someone loves the mission and vision of an organization and resonates with its top leadership, if their immediate manager is poor, their job satisfaction will be diminished and their effectiveness will be reduced.[1]

Third, managers themselves become more effective when they have great managers. If we were to ask “what do great managers need?,” the answer would be: “Great managers.” Great managers need great managers.

The Importance of Creating a Climate for Great Managers

But over all this, great managers exist within the context of the overall organization. Thus, the organization plays a substantial role in producing and retaining great managers by creating a climate that will be more conducive or less conducive to this.

In particular, an organization creates a climate that is either favorable or disfavorable to great managers through its web of policies, practice, and language.

Policies that are restrictive, for example, work against the manager who aims to liberate and empower his employees. Policies that affirm the fundamental value of autonomy, on the other hand, reinforce and further the efforts of great managers. The efforts of great managers are amplified or diminished by the overall company environment.

How to Create a Climate for Great Managers

Marcus Buckingham outlines four things that senior management can do to create a climate for great managers.[2] I will outline his four and then add two of my own.

1. Keep the focus on outcomes

Buckingham writes: “The role of the company is to identify the desired end. The role of the individual is to find the best means possible to achieve that end. Therefore strong companies become experts in the destination and give the individual the thrill of the journey.”[3]

He then gives the following practical suggestions for keeping the focus on outcomes:

• Define each role in outcome terms as much as possible.
• “Find a way to rate, rank, or count as many of these outcomes as possible. Measurement always improves performance.”
• For roles relating to customers, “the four most important outcomes for a customer are accuracy, availability, partnership, and advice.”
• “Hold managers accountable for their employees’ responses to the twelve questions.” (See the document “Employee Engagement” for the list of the twelve questions and their meaning.)

2. Value world-class performance in every role

Every role that is performed at excellence deserves respect and has its own nobility. In order to create heroes in every role, consider:

• Setting up graded levels of achievement in as many roles as possible. “Identify specific criteria for moving up from one level to the next.” “Take every level seriously.”
• Creating broad banded compensation plans.
• Celebrating “personal bests.” “Many people like to compete with themselves. Design a system so that each person can keep track of his or her performance monthly or quarterly. Use this system to celebrate monthly or quarterly ‘personal bests,’ as and when they occur. A growing number of ‘personal bests’ means a growing company.”

3. Study your best

“Strong companies learn from their very best. Internal best practice discovery is one of their most important rituals.”

• Consider building a talent profile for each role, based on studying your best in each role.
• “Revise all training to incorporate what you have learned about excellence in each role.”
• “Set up an internal ‘university.’ The main function of this university should be to provide a forum for showcasing how your best, in every role, do what they do. As far as is possible, every employee should be exposed to the thinking, the actions, and the satisfactions of your best, in every role.”

4. Use the language of great management

“Language affects thinking. Thinking affects behavior. Companies must change how people speak if they are to change how people behave. Strong companies turn the language of great managers into the common language.”[4]

• “Teach the Four Keys of great managers. In particular emphasize the difference among skills, knowledge, and talents. Make sure people know that all roles, performed at excellence, require talent, that a talent is any recurring pattern of thought, feeling, or behavior, and that talents are extraordinarily difficult to teach.”
• “Change recruiting practices, job descriptions, and resume qualifications to reflect the critical importance and the broader definition of a talent.”
• “Revise all training content to reflect the differences among skills, knowledge, and talents. A great company is clear about what can be trained and what cannot.”
• “Remove the remedial element from training. Send your most talented people to learn new skills and knowledge that can complement their talents. Stop sending less talented people to training classes to be ‘fixed.’”
• “Give every employee the benefit of feedback….[But] stop using [any specific tools] if they are focused on identifying what needs to be fixed.”
• “Start the great managers performance management routine.”

5. Teach on the nature of management

This is an extension of Buckingham’s third and fourth points. We should teach managers specifically what it means to be strengths-based, what management is at its core (turning talent into performance), and how to implement the four keys.

6. Create systems and structures that embody these principles

The principles of strengths-based, effective management need to be woven in to the fabric and systems of the organization.

In this regard, some of the key systems that we are seeking to implement at Next include: Strengths-based hiring, strengths-based performance management, strengths-based career development, talent profile, strengths based training, etc.

Notes

[1] See Buckingham, First, Break All the Rules, pp. 32; 34-36.

[2] See First, Break All the Rules, pp. 236 – 238. Buckingham points out convention wisdom, which holds that

[3] First, Break All the Rules, 236.

[4] First, Break All the Rules, p. 237.