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Applying Business Best Practices to Relationships

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Metrics money managementI ran across a blog the other day singing the importance of relationships in business. Fair enough.

As I recall, it started by saying:

“Let’s start with some undeniable facts. What gets measured gets managed.” ‘Uh oh,’ I thought, ‘I’m gonna have to write about this one.’

All right, let’s trot out the whole set of logical fallacies.

1. If you can’t measure it, you can’t manage it
2. If you can measure it, you can manage it
3. If you can’t manage it, it’s because you’re not measuring it
4. If you can manage it, it’s because you are measuring it.

Not one of those is true.

First, there is management by fear and intimidation; by shared values; by guilt-tripping; by walking around; by praise; and so on. None of which require measurement.

Second, the act of measuring per se does nothing to cause “management” to happen.

Of course, just because something is illogical doesn’t mean people don’t assign meaning to it. But why do so many people insist so strongly on connecting management and measurement?

I can suggest two reasons.

Go back to “what gets measured, gets managed.” What that really means is, “I’m the kind of person who, when someone measures me, falls into line and behaves according to the desired metrics.”

This view is the choice of the one being measured; it’s not a trait of the measurer, nor an outcome of the act of measuring. It’s a rather passive choice by the measuree: it doesn’t require much thinking, and doesn’t invite challenge.

Which is exactly what most managers intend measurement to do: to communicate desires from boss to employee, in narrow, quantitative, often financial, terms.

But most of all, “what gets measured gets managed” reflects a belief that measurement is good, and that more measurement is better. Break it down to the elemental levels, let’s really manage this puppy.

Well, let’s test-drive that idea. Go ask your wife how you’re doing as a spouse (or reverse, etc.). On a scale of 1-10, please.

Now, that might get you into a pretty good conversation. It might even be so good that your actual performance as a spouse improves as a result.

Suppose further that you work in a company that believes “what gets measured gets managed,” and decide to apply this “obvious fact” to your home life as well. So you ask the wife the same question next month. Scale of 1-10 again, please.

Your spouse says, “didn’t we just have this conversation a few weeks ago?”

“Why, yes,” you say, “and it was really useful, and I want to be an even better spouse, so I figured I’d starting taking regular metrics readings so I can establish a benchmark performance level and track my improvement. I learned that technique at work. Do you think monthly reports on my spousal performance will be enough? Maybe I should ask you for weekly ratings?  And let’s be s ure to talk about rewards for achieving and exceeding my metrics.”

Now, if your spouse has any relationship skills, and any self-image to speak of, you’re gonna be sleeping on the sofa for a while.

And while explaining these new arrangements to you, you may hear something like, “and by the way, thanks for ruining that great conversation we had a few weeks ago, because now I see you never meant it, you were just in it for your own ego-gratification, and I feel like an idiot because I actually thought you might have cared, but now I see not only are you a jerk, but I deluded myself, and I now don’t even trust my own assessment skills, I was so far off in even thinking we had a good thing going, now I feel even worse, etc.”

This is the emotional equivalent of the Heisenberg Uncertainty Principle. You have just proven that the act of measurement can alter the thing being measured. (And by the way, who cares that you meant well, anyway?)

I have a friend who works at GE designing sophisticated fluid control measurement tools used in the oil industry. Crude oil doesn’t much care how often or how precisely you measure it. Unfortunately, spouses do.  As do people in general.

Which is why the unthinking, inane concatenations of measurement and management so often fail when applied to people.

Best practices aren’t universal. The management of capital and hydrocarbon resources doesn’t necessarily tell us much about the management of human “resources,” aka people.

Why Companies Don’t Create Trust Internally

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The Institute for Corporate Productivity (i4cp) sets out to answer that question in a recent survey. They report:

"Most organizations recognize that trust is an important consideration in their company’s success, but many employees don’t feel it is being nurtured internally. The main culprit? Top management…

… A full 40% of low-performing companies feel their organizations do not nurture trust, while only 16% of respondents from high-performing companies feel the same.

“Trust is a core building block in developing a high-performance culture,” says i4cp Leadership Pillar Director Mary Key. “When employees don’t sense an environment where they can trust others, especially the leadership, productivity and morale spiral downward. It’s no surprise that those who reported higher levels of trust also rate their companies as high-performing.”

It’s nice to have empirical data linking trust and economic performance—one of the biggest trust misconceptions in the corporate world is the implicit belief that trust is a costly indulgence, related somehow to charity, a nice-to-have if you can afford it, but certainly not a competitive factor.

Wrong.

The study goes on to say that management credibility is falling—and the biggest reason is “failure of senior leaders to deal with low-performing individuals or teams.”

Let’s connect the dots here.  Phil McGee, a small-company CEO, says nearly all management failures boil down to two failures. The first, he says, is "an inability to confront."

McGee is dead right. Trust comes in large part from courage and from the ability to constructively confront reality. Which leads to high performance. Which leads to trust. Just like the survey respondents said.  (David Maister has written extensively and persuasively about the link between facing hard truths and generating performance and trust).

McGee’s other leading cause of bad management is "a tendency to blame. "  And here I see a dichotomy between the survey-makers and the survey-takers.
In the survey report-out, the authors say:

Despite the issues, there are very few formal programs inside of organizations today to restore trust. A full 87% of respondents say their organizations do not offer training programs that address this issue, 69% don’t utilize an ombudsman program to deal with concerns or complaints, and more than 60% report that employee surveys or audits on trust issues aren’t in place, or are in place to only a small extent.

Methinks the i4cp is falling here into the trap of modern management practices—the belief that, if you have a trust problem, you need surveys, training, processes and programs. The default corporate response to a complex issue has come to be:

a. Design a survey instrument
b. Use it to execute a needs analysis
c. Identify competency models, complete with levels and behaviors that indicate them
d. Train employees in the new behaviors
e. Implement measurement and reward systems to incent the above.

I can’t say strongly enough what hokum this is when it comes to trust. A competency model does for a low-trust company what a report card does for a recidivist criminal—just about nothing.

What would be the effect of doing a “needs analysis” of people walking into church? (“How well would you say you’re doing on the 4th commandment? OK, sit in the 3rd pew, front, left. And how much reward will it take for you to behave unselfishly this quarter?”).

Low-trust organizations don’t need more of the same stuff that makes for "best practices" in process design.   They need values, principles, passion, introspection, leaders who actually believe what they say and aren’t afraid to say what they believe.  They need inspiration, a conversion, ah-ha moments, and a hard kick in the soul.

But i4cp does good work, and they also report out the answers of those surveyed:

…most respondents said that better communication practices, both informal and formal, need to be implemented across all levels of the organization. Many also specifically cited the need for better top-down communication from upper-level management and management’s need to “walk the talk” on trust issues.

Exactly.

This is McGee’s “tendency to blame and inability to confront” themes being echoed by the real people in the trenches. Don’t blame the process; don’t passively wait for others. Step up to the plate. Be a mensch. Earn your pay.  Do the right thing despite the incentives, not because of them—then fix the incentives later. 

The only thing left is to remind all the employees that the same advice applies to them as well. “I can’t do it until it’s led from the CEO’s office” is more of the same: a tendency to blame, and an inability to confront.  It doesn’t smell any better just because you’re lower in the organization. 

You don’t need your boss’s permission, a business process, or a quarterly incentive program to be more trustworthy. Just do it. It’s not just good karma, it’s good business.

Employee Engagement, Fog Sculpting, and Measuring Love

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Do you believe the following statement?

High levels of employee engagement keenly correlate to individual, group and corporate performance in areas such as retention, turnover, productivity, customer service and loyalty.

It’s from Employee Engagement:What Exactly is It? by Patricia Soldati.

How about this following statement?

It’s impossible to overstate the importance of an engaged workforce on a company’s bottom line.

That one is Julie Gebauer (whom I know) of Towers Perrin at The Workforce Disengagement Problem.  

I believe both statements. I believe them a lot, in fact. (And not just because Julie Gebauer says so—though that helps!).

Trouble is—what do you do with it?

“Employee engagement” is one of those concepts that straddle a thin line: how to be complex enough to be true—and yet simple enough to be practical?

• Over-stress explanation, and you risk fog-sculpting—creating beautiful conceptual landscapes that are unactionable;
• Over-stress actionability, and you risk measuring love—mechanizing the things that make humanity human.

Similar issues arise with concepts like loyalty, employee satisfaction, organizational commitment, or identifying customer needs.

There are four risks here.

The first two risks are definitions, and identifying drivers. Soldati says:

In 2006, The Conference Board published "Employee Engagement, A Review of Current Research and Its Implications"…twelve major studies on employee engagement had been published over the prior four years by top research firms such as Gallup, Towers Perrin, Blessing White, the Corporate Leadership Council and others.  Each of the studies used different definitions and, collectively, came up with 26 key drivers of engagement.

Four of the studies agreed on eight of the 26 drivers.  All studies agreed that the strongest driver is the relationship with one’s manager.

Believe it?  I do.  No problem believing that one at all.  But it’s dangerously close to the fog-sculpting end of things, up there with good parenting, moral values and integrity.

The third risk is causality. For example: it is statistically proven that shorter people have lower IQ scores.

Don’t believe it? Compare 7-year olds’ test scores with 20-somethings’ performance on the same test.  See? Height is clearly correlated with IQ.

Correlation is not causality. David Hume (who outranks even Julie Gebauer), famously showed it’s impossible to prove causality.

The search for causality, in service to managerial actions and simplicity, forces us down the path of measuring love—which, like an emotional Heisenberg Principle, can destroy the thing being measured if overdone.

Which leads to the fourth risk—in today’s business environment, the biggest of all: measurement-driven behavioralism.

“Employee engagement” is the latest star in the umpteenth remake of a movie we’ve seen too often: define drivers, measure them, benchmark the measures, attach rewards, and link pay to performance against the metrics.

This leads managers to ask HR to causally link “engagement” to shareholder value, define indicators for the links, and provide incentive plans to drive the whole Rube Goldberg scheme.  By Tuesday, please.

I suspect the HR community is even more at fault for encouraging this kind of thinking.

Of the two sins, I’d rather be subjected to fog-sculpting. At least it fires the imagination.

By contrast, measuring love is inherently dehumanizing.

Turning “engagement” into an engineering exercise is—I believe—a great recipe for disengagement.

Scott Flander takes a good look at all this in “Terms of Engagement” in Human Resource Executive Online.  He quotes Ian Ziskin, chief HR officer at Northrup Grumman:

I’ve found over time that the single biggest thing to focus on is not the actual scores or the response rates — that’s a means to an end. The end is, do you really understand what the issues are in your business, and what are the actions you’re taking to improve them?

I don’t know Ziskin, but he sounds a thoughtful exec; he knows how to sculpt fog, and how to measure love.  And he artfully chooses a Middle Way.