Are Bosses Necessary? – The Atlantic

A radical experiment at Zappos may herald the emergence of a new, more democratic kind of organization

Deeply strange reports have been emerging from the Las Vegas headquarters of Zappos, until recently the world’s happiest shoe store. This spring, by order of the CEO, Tony Hsieh, the company abolished managers, eliminated job titles, denounced its own organizational hierarchy, and vested all authority in a 10,000-word constitution that spells out a radical new system of self-governance. Holacracy, it’s called, and it makes all previous moves toward “employee empowerment” look like the mild concessions of an 18th-century monarch. Freed from direct supervision, employees are expected to join various impermanent democratic assemblies called “circles” (headed, but notrun, by a “lead link”), in which they will essentially propose their own job descriptions, ratify the “roles” of others, and decide what projects the group should undertake.

The constitution was written by Brian Robertson, a Philadelphia entrepreneur unaffiliated with Zappos who’d grown disaffected with standard management practices. Hsieh had heard him speak about holacracy at a 2012 conference, and was captivated. “We adopted it wholesale with zero changes,” says John Bunch, who used to be a technical adviser at Zappos but is now title-less. (He is, nevertheless, heading the implementation of holacracy.)

The media has so far reacted with a mix of understandable skepticism and outright derision. “Mr. Hsieh’s hot hand appears to be at risk of going cold,” The New York Times reported in July. Employees at Zappos, the paper said, have met the development “with everything from cautious embrace to outright revulsion.” The tech site Pando was less measured: “Holacracy of Dunces,” a headline snorted that same month.

Holacracy’s implementation at Zappos, still in process, has undoubtedly caused problems (more on those later). But such reports risk missing the larger picture. However fraught it may be, Zappos’s experiment with holacracy is just the latest sign that information technology is allowing the emergence of a new form of organization.

For years, pockets of the U.S. military have been slowly taking decisions out of the hands of high-ranking commanders and entrusting them to teams of soldiers, who (armed with the concept of “commander’s intent”) are told what problems to solve—but not how to solve them. “The organization as a rigidly reductionist mechanical beast is an endangered species,” General Stanley McChrystal writes in his new book, Team of Teams. “The traditional heroic leader may not be far behind.” At the video-game maker Valve, new employees are told not to expect instructions, because even the managing director “isn’t your manager,” says the employee handbook. “You have the power to green-light projects. You have the power to ship products.” And so they do

What’s enabling this shift, argues Thomas Malone, a professor at MIT’s Sloan School of Management, is simple: falling information costs. In his 2004 book,The Future of Work, Malone broke the history of organizations into three stages. In stage one, information is expensive to convey, so most decisions are made face-to-face in necessarily small firms. As communication costs begin to fall, Malone explained to me, we reach stage two, in which “it becomes economically feasible to send information to a single, central place for decisions to be made.” That is, the large, centralized hierarchy becomes possible. Then comes stage three: “As communication costs continue to fall, there comes a time when it’s economically feasible to bring information to all points, so in some sense, everyone can know everything.” In this third stage, the benefits of bigness can persist, but its traditional handmaiden, hierarchy, doesn’t have to. (Indeed, when the volume of information grows large enough, trying to direct its flow upward for evaluation can slow everything down.)

Malone points to the history of government. We lived most of our existence in small, fairly egalitarian bands of hunter-gatherers, until the advent of written language, which arose in tandem with record-keeping, taxation, and the founding of the first kingdoms, around 3000 B.C. Large-scale democracy did not appear until an equally momentous information technology, the printing press, enabled the “reading revolution” of the 18th century.

In business, the transition from bands to kingdoms came courtesy of the telegraph in the mid-19th century. And what it begat—the large, managerial hierarchy; the salaried manager; the modern definition of a job—has endured, with occasional pushes to prune and flatten management, until now, a good two decades after the Internet radically altered the volume, velocity, and direction of information flows. (Doubters, check your inbox.)

Why the lag? A look back at the mid-19th-century transition suggests an answer. After a new information technology appears, the organizational innovation that it allows doesn’t knock at the front door and present itself. People have to invent it. The ones who did last time around aren’t as celebrated as Morse, or before him Gutenberg. But what they arrived at looks obvious only in retrospect.

In 1854 the Board of the New York and Erie Railroad promoted Daniel McCallum, a Scottish-born bridge builder, to general superintendent, hoping he could address the railroad’s mysterious ills. As the railroad grew larger, it was growing not more efficient per mile, as Adam Smith would have predicted, but less so. Had the company hit some sort of natural size limit? No, McCallum concluded. What was breaking down was its stage-one organizational system.

At a small railroad—and all railroads up to then had been small—the superintendent could give every aspect of its business his personal attention, McCallum wrote. “Each employee is familiarly known to him, and all questions in relation to its business are at once presented and acted upon.” But as The Atlantic marveled in an 1858 article featuring McCallum’s ideas, the New York and Erie had to coordinate the movements of some 200 locomotives, 3,000 cars, and 4,700 employees dispersed over hundreds of miles. What was needed, McCallum wrote, was “a system perfect in its details, properly adapted and vigilantly enforced.”

The system he spelled out—in great detail—delineated who had the authority to decide what, and even what words to use in communicating that decision back to their superiors on the telegraph. (“All subordinates should be accountable to, and be directed by their immediate superiors only.”) In the elaborate diagram that McCallum created—widely considered the first modern organizational chart—17 spokes, each representing a different division, radiate from a central hub that is the office of McCallum himself. Thanks to a system of hourly reports, The Atlantic wrote,

“the General Superintendent at his office can at any moment tell within a mile where each car or engine is, what it is doing, the contents of the car, the consignor and consignee, the time at which it arrives and leaves each station, (the actual time, not the time when it should arrive,) and is thus able to correct all errors almost at the moment of commission … The great regulator … is the electric telegraph, which connects all parts of the road, and enables one person to keep, as it were, his eye on the whole road at once.”

The most striking aspect of McCallum’s system comes near the top of his report. For all the rigidities, he admitted, the system was an improvisation—one man’s attempt to bring his organization into better alignment with a rapidly changing environment. It would “require amendment,” he wrote, “and a reasonable time to prove its worth.”

Which sounds a lot like the commentary of Brian Robertson, the entrepreneur who created holacracy. Like McCallum’s, his decision to put pen to paper was not utopian but pragmatic. The idea was born out of his own frustrations as the CEO of Ternary Software, which he founded in 2001. “When I tried to design organizations purely from my own intellect,” Robertson says, “I always got it wrong. I’d design solutions for problems that didn’t exist. Other parts were overdesigned. We’d end up solving problems that would never come up in practice, and then you’d miss the ones you actually needed to solve. You can’t know enough.”

He didn’t start with any radical notions of overturning hierarchy. He just wanted his company to function better. After exhausting the most-obvious solutions—hiring better managers, attempting to nail the perfect org chart—he finally concluded that the problem was the very concept of a rigid org chart. And so, as McCallum had a century and a half before, he wrote out a new set of rules delineating a new system.

Like McCallum’s, it is very, very complicated—too complex to describe fully here, and too complex for the liking of some at Zappos. (The constitution Robertson drafted runs more than twice the length of the Founding Fathers’.) But its basic principles go something like this: Instead of being assigned job descriptions from on high, employees take on mutable roles where they see a need. The hierarchical org chart is replaced by an ever-changing array of circles that can form, merge, or collapse in response to opportunities and threats in the marketplace. Reorganization, in effect, becomes a permanent way of life. The rigid forms invented in the steam age give way to something more organic—a jellyfish, perhaps.

It makes some sense on paper. But in practice? Holacracy’s first laboratory, Ternary, was a tiny company that didn’t survive the Great Recession. And at Zappos, given the choice of embracing holacracy or taking a buyout this past spring, 210 employees, or 14 percent of the company’s workforce, chose the latter. John Bunch notes that holacracy has created a whole set of new problems that have to be addressed. How to evaluate people’s performance is one. (Zappos is working on a system called “badging,” whereby employees earn badges for acquiring new skills.) How to compensate someone who splits her time among three different roles (say, customer care, event planning, and brainstorming a new Zappos product line) is another. The list goes on. How do you stop people from trying to exercise power they no longer have? And how does a system conceived to reduce information overload (“the goal,” says Bunch, “is to find the optimal circle structure where the need for communication between the circles is the least”) not add to it instead, in the form of endless meetings?

But just because solutions don’t yet exist doesn’t mean they won’t be found, says Robertson, who likens holacracy to a computer’s operating system and the solutions to apps. Remember when the App Store first opened? It didn’t have a lot on offer. Bunch told me that it’s too soon for Zappos to begin making amendments to holacracy; the company needs to finish the difficult process of understanding it first. “If someone comes to me super-frustrated, borderline angry,” he says, “that’s actually a really good sign to me, because it means they’re at least trying to understand it.”

The important point is this: To pronounce holacracy unworkable now would be akin to pronouncing democracy unworkable in the midst of the French Revolution. And should holacracy at Zappos fail, which it well may, neither should its principles be pronounced dead. The New York and Erie Railroad was in receivership within a few years of McCallum’s report—but the system he pioneered there became utterly commonplace by century’s end.

With that in mind, it’s not hard to imagine a future in which the only thing strange about what’s going on at Zappos is that it ever seemed strange at all.

3 Reasons Millennials Are Getting Fired – by J.T. O’Donnell

Recently, I wrote this article explaining why Millennials aren’t getting promoted. In response to Millennial readers’ requests for a deeper understanding of how being misperceived can negatively affect their careers, I’m taking it a step further and outlining exactly what’s getting them fired.

Employers are seriously fed up.

To get a sense of how heated this has become, read this article by one irate employerand his prediction of the backlash that will soon ensue from the Millennials’ attitudes toward work.

Additionally, this survey by SmartRecruiter of 28,000 bosses detailing where Millennials are falling short is just one example of the data to support the huge disconnect costing some Millennials their jobs. Here are the key takeaways Millennials need to know.

1. Employers don’t want to be parents.

Growing up, Millennials were coached their entire lives and they unknowingly assumeemployers will coach them too. However, the relationship isn’t the same. An employer pays us to do a job. We are service providers. Expecting extensive training and professional development to do the job doesn’t make financial sense. In many employers’ minds (especially, small to midsized businesses with limited budgets and resources), Millennials should foot the bill to develop themselves and make themselves worth more to the employer.

Tip: Millennials should do their best to proactively seek resources on their own to help them close gaps in skills and knowledge in the workplace. There are plenty ofonline tools and resources to help them put their best professional self forward. Additionally, they should seek out a mentor to privately ask questions and get guidance on how to make the right impression.

2. The anti-work attitude isn’t appreciated (or tolerated).

As explained here, Millennials tend to work only the minimum time expected–and will push for flexibility and a reduced work schedule to create more time for other pursuits. Being demanding about when and how they want to do their job can be viewed as disrespectful. A great way to look at how some employers feel is the way the dysfunctional phone/cable companies work. It’s annoying when they announce they can come out only on a certain day. They can’t tell you what time, and then they say they’ll call the day of and give you a four-hour window when they’ll arrive. While the phone/cable companies have us trapped, employers don’t feel the same about Millennials. They’ll fire the Millennial worker and find someone who can work when they need them to–and without the attitude.

Tip: In the early days and weeks of a new job, Millennials can make up for what they lack in skills by being consistently on time. When an employer sees their commitment to their work, they will earn her trust and respect, resulting in her being comfortable with their taking time off, and even providing them with a more flexible work schedule. When Millennials prove they can deliver on their company’s terms, their company will give them more of what they want.

3. Millennials’ happiness isn’t the employer’s responsibility.

Millennials are pretty vocal about wanting work to be a “fun” place to go. Besides career development, they also desire lots of cool perks and benefits to make their job feel more rewarding. Besides nice work spaces, amenities like gym memberships, healthy meals on-site, in-house parties, etc., are being used in an effort to attract and maintain Millennial workers. Unfortunately, this is backfiring on employers–and that makes them angry. In spite of all the perks to keep them happy, Millennials are getting to these jobs and quickly showing visible signs of disappointment and dissatisfaction within months of joining the company.

Why are Millennials so tough to keep happy?

Part of the problem is how much external motivators were used on Millennials growing up. In the book Punished by Rewards, Alfie Kohn argues that Millennials have an addiction to praise, perks, and other incentives to learn–better known as bribes. Thus, when they get to the job and the newness wear off, they think it’s the company’s job to fix it with more incentives. But, this is where the cycle of bribing has to stop. A company can offer only so much in the form of compensation and benefits. The reality is that Millennials (like all workers) must learn to find intrinsic motivation (internal drive for work), so they can find real satisfaction and success in their careers. Since Millennials haven’t learned this yet, they’re experiencing sadness and confusion in the workplace. Unfortunately, their unhappiness is transparent to employers who have no desire to pay for what they perceive as a bad attitude at work.

Tip: Millennials who feel confused and unhappy in their job should not blame the employer (yet). First, they should seek some career coaching. Many Millennials just need help understanding some of the basic elements for finding an internal motivation for work. They need to know their professional strengths and workplace personas, and the defining skills they’d like to grow so they can build up their specialties and find direction and motivation at the job.

Millennials, don’t get mad, get ahead!

While the rest of their peers continue to be misunderstood, smart Millennials can make some simple changes and set the standard for what an outstanding young professional looks like to employers today. As this article points out, doing so could lead an employer to fast-track a career as an example to other workers. Why not benefit from the opportunity?

7 Interview Questions That Determine Emotional Intelligence – by Carolyn Sun

Determining who you hire for a job plays a big part in forming your company’s culture and ensuring its future success. Selecting informative interview questions can be a key factor in finding the right employees — as well as weeding out the ones that won’t fit. A candidate’s answers can be telling.

While different companies embody various values and cultures, success in the workplace is strongly influenced by a person’s emotional intelligence, a quality that should be a non-negotiable when vetting job candidates, says Mariah DeLeon, vice-president of people at workplace ratings and review site Glassdoor.

Here are seven interview questions that can draw revealing answers from the job candidates you interview — and get you on your way to finding employees with stellar emotional intelligence.

Related: 8 Revealing Interview Questions to Hire Standout Staff

1. Who inspires you and why?

The job candidate’s answer often gives the interviewer a peek into who the interviewee models him or herself after. The response can also highlight the sorts of behavioral patterns the interviewee respects, saysCraig Cincotta, chief of staff and vice-president of communications at online home improvement marketplace Porch, where he’s heavily involved in team expansion and hiring.

2. If you were starting a company tomorrow, what would be its top three values?

Every good relationship starts with trust and aligned values. Insight into a person’s priorities — as well as honesty and integrity — can emerge in the candidate’s answer, explains Robert Alvarez, the CFO of ecommerce platform Bigcommerce.

3. If business priorities change, describe how you would help your team understand and carry out the shifted goals?

Shifting priorities happen in every company, and every job, so look for candidates who are flexible and possess the skills to help carry out change. Hire employees who are self-aware, motivated and display empathy advises DeLeon. “These skills will help employees better work in teams.”

Related: The 5 Must-Ask Interview Questions to Determine if Someone’s a Fit

4. Did you build lasting friendships while working at another job?  

It takes a while for people to build relationships — and being able to do so is a sign of solid emotional intelligence, Alvarez says. “[A lasting friendship] tells you that relationships and caring about people are important to the person.”

5. What skill or expertise do you feel like you’re still missing?

Curiosity and the desire to learn are vital signs that a prospective employee wants to get better at something. “People who struggle with this question are the people who think they already know it all,” warns Alvarez. “These are the people you want to steer away from.”

6. Can you teach me something, as if I’ve never heard of it before? (It can be anything: A skill, a lesson or a puzzle.)

A job candidate’s answer to this question can reveal several qualities:

  • Whether the person is willing to take the time to think before speaking.
  • If the candidate has the technical ability to explain something to a person who is less knowledgeable in the subject.
  • Whether the candidate asks empathetic questions to the person being taught, such as, “Is this making sense?”

7. What are the top three factors you would attribute to your success?

The answer to this question can determine whether a person is selfless or selfish, Alvarez says. “When people talk about their own success, listen to whether someone talks about ‘me-me-me’ or ‘I-I-I.’ Or whether they talk about ‘the team,’ ‘we’ or ‘us.’”

“Look for a team player who brings something positive to the company,” Cincotta shares. “Someone can be the smartest person in the room, but if they are not someone you enjoy working with — because they are more concerned with their own success over that of the company — they won’t be a fit.”

Carolyn Sun

Research Editor
Carolyn Sun is the research editor at Entrepreneur.com.

How to separate learning myths from reality – by Artin Atabaki, Stacey Dietsch, and Julia M. Sperling

Over the years, you have probably gained some insight into how your brain works. You may have taken a course or read a book that promised to reveal the secret of maximizing your mental capacity—a common sales pitch of leadership coaches these days. In the process, you may have read that after a critical period in childhood there is no hope for significant learning, that half of your brain is inactive at any given time, or that you’re capable of learning properly only in your preferred style.

Each of these claims is what we call a “neuromyth,” a misconception based on incorrect interpretations of neuroscientific research. Our experience advising companies on their lifelong-learning initiatives suggests that such misunderstandings remain embedded in many corporate training programs. As companies increasingly pour money into developing their employees, they can no longer afford to invest in training programs based on inaccurate and out-of-date assumptions. In recent years, for example, US businesses alone spent more than $164 billion annually on employee learning.1 The stakes are high and getting higher.

Bridging the gap between popular neuromyths and the scientific insights gathered in the past few decades is a growing challenge. As modern brain-imaging techniques, such as functional magnetic resonance imaging (fMRI), have advanced scientific knowledge, these misleading lay interpretations by business practitioners have advanced as well. Unless such misconceptions are eliminated, they will continue to undermine both personal- and organizational-learning efforts. In this article, we’ll address the three most prominent neuromyths in light of the latest research and explore some of the implications for corporate learning.

Myth #1: The critical window of childhood

Most of us have heard about critical learning periods—the first years of life, when the vast majority of the brain’s development is thought to occur. After this period, or so the assumption too often goes, the trajectory of human development is deemed to be more or less fixed. That, however, is an exaggeration. Recent neuroscientific research indicates that experience can change both the brain’s physical structure and its functional organization—a phenomenon described as neuroplasticity.

Researchers studying the plasticity of the brain are increasingly interested in mindfulness. Practicing simple meditation techniques, such as concentrated breathing, helps build denser gray matter in parts of the brain associated with learning and memory, controlling emotions, and compassion. A team led by Harvard scientists has shown that just eight weeks of mindful meditation can produce structural brain changes significant enough to be picked up by MRI scanners.2

Organizations from General Mills in consumer foods to digital bellwethers such as Facebook and Google increasingly give their employees opportunities to benefit from mindfulness and meditation. Most such programs have garnered enthusiastic support from employees, who often see a marked improvement in their mind-sets and job performance. For example, employees at the health insurer Aetna who have participated in the company’s free yoga and meditation classes report, on average, a 28 percent decrease in their levels of stress and a productivity increase of 62 minutes a week—an added value of approximately $3,000 per employee a year. CEO Mark Bertolini, who started the program a few years ago, marvels at the level of interest generated across the company; to date, more than a quarter of Aetna’s 50,000 employees have taken at least one class.3 Leaders like Bertolini understand that providing them with the tools to become more focused and mindful can foster a better working environment conducive to development and high performance.

Myth #2: The idle-brain theory

A recent European survey discovered that nearly 50 percent of teachers surveyed in the United Kingdom and the Netherlands believed that the idle-brain theory has been proved scientifically.4 This misunderstanding originally stemmed from inaccurate interpretations of activation hot spots in brain-imaging studies. By now, more carefully interpreted functional brain scans have shown that, irrespective of what a person is doing, the entire brain is generally active and that, depending on the task, some areas are more active than others. People can always learn new ideas and new skills, not by tapping into some unused part of the brain, but by forming new or stronger connections between nerve cells.

This insight into the brain’s capacity becomes particularly relevant for the environment and context in which learning typically occurs. Everybody knows, all too well, about the habit of quickly checking e-mails or planning for the next meeting in the middle of a training session. The problem is that such multitasking engages large parts of the brain’s working memory. Without freeing that up, we cannot successfully memorize and learn new information. In short, multitasking and learning cannot occur effectively at the same time.

Some organizations, recognizing this problem, are working to build immersive learning environments where distractions are eliminated. At McKinsey, we’ve created a model factory that participants can walk through to see operating conditions in action. But first, everyone is asked to place their phones and other distractive belongings in a locker, so they can fully concentrate on the learning exercise at hand. At many companies, removing the temptation of using mobile devices during learning sessions is becoming commonplace.

Myth #3: Learning styles and the left/right brain hypothesis

Almost everyone has encountered the theory that most people are either dominantly analytical (and left brained) or more creative (and right brained). However, this either/or dichotomy is false. The two hemispheres of the brain are linked and communicate extensively together; they do not work in isolation. The simplistic notion of a false binary has led, in many businesses, to the misconception that each one of us has a strictly preferred learning style and channel. Recent studies have flatly disproved this idea, suggesting instead that engaging all the senses in a variety of ways (for instance, audiovisual and tactile) can help employees retain new content.

One organization that puts this idea into practice is KFC, which uses multiple forms of learning in customer-service training. Sessions begin with an after-hours board game placing the entire team of a store in the role of the customer. This is followed up by “gamified” learning that fits into roughly 15-minute windows during shifts. These video game–like modules put the employees behind the cash register to handle a number of typical customer experiences, including responding to audio and visual cues of satisfaction. At the end of the online modules, employees physically reconvene at the front of the store to hear feedback, report on what they’ve learned, and receive live coaching as reinforcement.

Although significant progress has been made, much remains to be done to eradicate neuromyths from the philosophy of corporate-training programs. Neuroscience research has confirmed some of the approaches that learning professionals already use, such as on-the-job reinforcement and engagement without distractions. But that research has also contradicted other approaches. Companies should draw on the newly substantiated insights and may need to rethink their training programs accordingly. At the very least, they need to improve their dialogue with, and understanding of, the scientific community.

About the authors

Artin Atabaki is a consultant in McKinsey’s Stuttgart office; Stacey Dietsch is an associate principal in the Washington, DC, office; and Julia M. Sperling is a principal in the Dubai office.

The authors wish to thank McKinsey’s Jennifer May, Michael Rennie, and Kristina Wollschlaeger for their support of and contributions to this article.

Culture: Why It’s The Hottest Topic In Business Today – by Josh Bersin

Last year Merriam Webster’s dictionary stated that ”culture” was the most popular word of the year. Well, it has now become one of the most important words in corporate board rooms, and for good reason.

We have a retention crisis. New Deloitte research shows that culture, engagement, and employee retention are now the top talent challenges facing business leaders. More than half business leaders rate this issue “urgent” – up from only around 20% last year.

What’s going on? It’s very simple: as the economy picks up steam (unemployment now below 5.5%), employees have more bargaining power than ever before. Thanks to social websites likeLinkedIn LNKD +0.07%, Glassdoor, and Indeed, a company’s employment brand is now public information so if you’re not a great place to work, people find out fast. This shifts power into the hands of job-seekers.

And many companies have work to do.  Gallup’s latest research shows that only 31% of employees are engaged at work (51% are disengaged and 17.5% activelydisengaged). Analysis of the Glassdoor database shows that the average employee gives their company a C+ (3.1 out of 5) when asked whether they would recommend their company to a friend (Bersin by Deloitte research with Glassdoor).

We have arrived in a world of “haves” and “have-nots” when it comes to attracting and engaging top talent.

Let me cite some examples:

  • I recently met with one of the world’s biggest industrial manufacturers on the east coast and they lamented losing top aerospace engineers to Google GOOGL +0.73%. They’re scratching their heads to figure out how to prevent more top engineers from leaving.
  • A large well-known Silicon Valley company considering a major facelift of its corporate campus to attract young people. They’re not sure if it will work or not, but they feel they have no choice. Here there is a war to build the “best workplace in the world” – free food, unlimited vacation, yoga classes, beer bashes, and bright open offices are everywhere. (Check out Google’s new space age campus design.)
  • Most financial services companies I meet with tell me they are struggling to hire top people. While the industry is still popular with MBAs, the recession damaged the reputation for this industry and it’s just starting to recover.

Companies that focus on culture are becoming icons for job seekers:

  • Fortune’ Best Companies happen to be many of the same companies listed in Glassdoor’sBest Places to Work and also LinkedIn’s Most In-Demand Employers. This shows that companies with strong positive cultures (Fortune and Glassdoor’s list is based on employee surveys) are now the most in-demand.  So the “culture winners” are winning bigger.
  • Younger companies that focus on culture see a huge payoff. HubSpot, a growing New England tech firm focused on its culture (around 1,000 employees), has Glassdoor ratings of 4.6, far above the industry average. They give their staff free books and education and believe so strongly in transparency that they post their board meeting notes and culture manifesto online.
  • NetFlix’s culture manifesto ”freedom with responsibility” is one of the most popular documents on the internet, 11 million+ viewers. Everyone wants to copy it.
  • Value statements have popped up everywhere. Zappos’ cultural values focus on innovation, Quicken Loans  uses its colorful “ISMS” to guide values (“call back every client the same day” is one of their values), Google has its 10 ”truths” (focus on the user is one), RW Baird has its “ unique culture,” Salesforce focuses on community, and it goes on and on.
  • Culture-driven companies explicitly put their people first. Wegmans, the #7 best place to work in the Fortune list, reset business goals just to create the jobs and career growth they want for their people. “Take care of your people and they will take care of your customers,” as the saying goes.
  • Traditional companies like Aetna are now heavily focused on culture. Recently the New York Times published an article about Aetna’s CEO Mark Bertolini. He has raised wages, improved health benefits, and introduced yoga and mindfulness training to his entire company to improve retention and culture in the call centers. Their $100M + turnover problem is rapidly going away and he claims to have already improved the bottom line by 3-4 %.

google

Look at how office space is now part of building a great culture. Fortune’s new “25 coolest offices of the 100 Best Companies” shows how most of these great places to work are actually great PLACES to work. Flexibility, entertainment, and bright colorful offices and art make these companies a fun place to work.

People now believe that culture has a direct impact on financial performance. I just talked with two industry analysts who read Glassdoor comments before they publish analyst reports.  Both told me they use this data to understand employee sentiment read comments about the CEO as part of their core research. It also helps them compare competitors.

As the saying goes, “Culture eats Strategy for Lunch.”  (And free lunch is now part of the culture.)

Ok it’s a popular topic. What is culture anyway?

Culture is a big and somewhat vague term. Some define it as “what happens when nobody is looking.”

In reality, it’s much more complex. Culture is the set of behaviors, values, artifacts, reward systems, and rituals that make up your organization. You can “feel” culture when you visit a company, because it is often evident in people’s behavior, enthusiasm, and the space itself.

I visit a lot of companies and I can often sense the culture in a few minutes. Are people busy and working with customers? Or are they quietly working alone? Do they get in early and leave late? Or does the parking lot empty at 4:30? Is the office beautiful and inspiring with values and icons around, or is it messy and busy? Is there a sense of order or a sense of family?  All these clues help diagnose culture.

The Competing Values Framework, by Kim Cameron and Robert Quinn, is a terrific textbook on organizational culture. After years of research the authors grouped organizational cultures into four types and their research shows that most teams fall into one of these four types. You can diagnose your culture using tools like theirs (and others) and it will help you align your values and hiring to the culture you want to build.  There are three issues to consider:  type (what is your culture), strength (how strong is it), and congruence (how consistent is it).

competing-values-framework

Our research shows that culture and employee engagement are tightly linked (“culture” vs. “climate”), but not the same thing. Culture is slow to build, pervasive, and hard to change. Climate can be changed quickly.

When you communicate and honor culture, people know what to expect and feel comfortable. And the climate must support it. For example, a CEO I interviewed told me that “calling people back the same day” was part of his culture – so he monitors this behavior because to him, customer service is cultural bedrock.

As a company grows or acquires another company, the culture will often shift. IBM has been through many culture changes over the years, and one can trace them to major transitions in the business. When I worked there in the 1980s, IBM was a technology pioneer, but then later slowly but deliberately changed its culture to that of a consulting organization. Now it seems to be headed back.

Sometimes an acquisition will damage a well-honed culture, so watch out here. (When HP acquired Compaq, for example, a culture of engineering quality was mixed with a culture of low-cost production, causing a historic challenge.)

Many HR and management practices will drive or support culture. Do you value employee development? Are people empowered to take charge or do they follow the rules? How are people promoted and why? The Simply Irresistiblemodel describes many of the factors. If you’re focused on culture, we encourage managers and HR teams to think about the “total employee experience”: everything from the coffee in the coffee machine to the quality of management plays a role.

simply irresistble

How Do We Build And Manage Great Culture?

Ultimately culture is driven by leadership. How leaders behave, what they say, and what they value drives culture.

I proved this myself: I analyzed the Glassdoor database and found that the factor most highly correlated with an individual’s recommendation of their company as a place to work was “quality and trust in leadership.”

So the selection of leaders, development of leaders, and the coaching of leaders are all critical to building the right culture. Companies that focus on building great leaders spend almost 3X the average on leadership development, and they get a tremendous return for it.

Once culture is established and communicated, it becomes a tool to screen and assist candidates. The Talent Board (a research group that studies the job candidate experience) found that 41% of all candidates search for information about a company culture before they apply. So your culture is already a screening tool when you recruit people.

Zappos relies on culture to screen all hires, by trying to see if they are “wacky.” (Zappos assesses culture before they even assess job fit.) Southwest Airlines assesses culture fit by asking candidates to tell a joke. When you focus on culture as strategy you find that some people just won’t fit, regardless of their pedigree.

When I asked the SVP of HR at a financial institution how they guard their culture she said “people who don’t work as a team just don’t like it here.  They leave.”  Culture is like a flywheel: it gets stronger the more you reinforce it.

culture

If you want to improve your culture, look carefully at how you coach and evaluate your people. Do you believe in “forced ranking?” or “up or out?” That process in itself creates a type of culture – one most companies are moving away from. Today more than 60% of the companies we surveyed are changing how they evaluate performance because they want to drive empowerment and innovation into their organization. We call performance management the “secret ingredient” to building a highly engaged culture.

The ISMS Culture Book of Quicken Loans

A New Industry Of Culture And Engagement Tools

An industry of new culture diagnostic and feedback tools is emerging. Historically culture assessment has been a niche market of small psychology firms (companies like Human Synergistics, Dennison Consulting, and Senn Delaney have been around for years). Now, driven by the need to engage and attract people, this market is going mainstream. New, mobile and real-time tools to assess culture, collect regular and real-time feedback, and analyze employee sentiment are disrupting the $billion market for employee engagement and culture surveys.

Some of the new vendors include CultureAmp, TinyHRBlackbookHR,Achievers, GloboforceBetterCompany.co, Glint.io, OfficeVibe, Waggl, Canary,RelatedMatters, and dozens of others now offer real-time engagement and employee feedback tools to help you better understand and improve your workplace environment. Deloitte has a new culture assessment tool which is gaining great momentum. (Read Why Companies Fail to Engage Today’s Workforce for more information on this new market.)

Keeping It Simple:  Part Of Building A Great Culture

Remember also that great cultures are easy to understand. So keep it simple.  If you can’t write your values and culture down in a few words, it’s probably too complex to understand.

simplification

We believe simplification is becoming the next big thing in business. More than 60% of the companies we surveyed told us that their employees feel “overwhelmed” by the volume of activity and messages they get at work.  So part of your cultural facelift should also be “decluttering” of the workplace.

GE recently launched a major new strategy to simplify its business: the company is teaching managers how to focus, showing people how to spend more time with customers, and simplifying its back office processes. SAP did the same thing, and saw employee engagement rise by almost 30%.

Simplification can also improve the culture of compliance. New research by Deloitte Australia shows that financial services firms that focus on culture instead of compliance systems have better compliance. The research believes $240 billion is wasted on overly-complex compliance systems which could be replaced by a “culture of compliance.”

Great corporate cultures have always thrived on simplicity. Remember the mantra at IBM in the 1970s and 1980s?  It was very simple: “Think.” The Nordstrom’s rule?  ”Use good judgement.” These are simple statements that help people focus. When the rules and values are simple, we remember them.

One of the 10 ”Isms” in Quicken Loans’ manifesto is “ keep it simple.” Don’t make things complicated and don’t design for the “edge cases.”

Design thinking, agile and distributed management is all a part of simplifying work and improving corporate culture. This is an area where HR has work to do (read The Decluttering of Human Resources for more).

Ok I get it. Culture Matters. What should I do?

The prescription is pretty simple. Do you take culture seriously? Do you understand and monitor your culture? Does leadership use culture as a way to communicate values and strategy?  Are you investing adequately in your people programs?

There are many role models to follow:  Southwest Airlines’ culture of customer service and fun (elegantly described in The Southwest Way); Apple Inc.’s culture of innovation and technology elegance; Google’s culture of focusing on the user; even the US Post Office’s culture of service and reliability. Most of the companies in the Fortune Best Places to Work have a strong focus on culture – usually embodied by the CEO.

Your culture, like your strategy, is unique to your organization. It builds over time and is often hard to change. And when things don’t seem to be going well, turn back the clock. Sometimes the culture is what changed: remember what made your company great in the first place.

Finally, remember that culture lets you focus on your purpose and mission. As Joey Reiman describes in his book The Story of Purpose, people are not intrinsically motivated by profit or market share – it is purpose and values that bring us to work every day.

No matter if you’re a CEO, HR executive, manager, or team leader –  culture really matters. Consider it one of your most powerful tools for business success.

Josh Bersin


Josh Bersin is a leading analyst in HR, talent, leadership, and HR technology. He is also founder and Principal of Bersin by Deloitte, a leading research and advisory firm.

Guess Who Doesn’t Fit In at Work – by Lauren A. Rivera

 ACROSS cultures and industries, managers strongly prize “cultural fit” — the idea that the best employees are like-minded. One recent survey found that more than 80 percent of employers worldwide named cultural fit as a top hiring priority.

When done carefully, selecting new workers this way can make organizations more productive and profitable. But cultural fit has morphed into a far more nebulous and potentially dangerous concept. It has shifted from systematic analysis of who will thrive in a given workplace to snap judgments by managers about who they’d rather hang out with. In the process, fit has become a catchall used to justify hiring people who are similar to decision makers and rejecting people who are not.

The concept of fit first gained traction in the 1980s. The original idea was that if companies hired individuals whose personalities and values — and not just their skills — meshed with an organization’s strategy, workers would feel more attached to their jobs, work harder and stay longer. For Southwest Airlines, screening job candidates based on their willingness to provide a wacky experience for strangers contributed to the fun environment that enabled the company’s financial success. Likewise, for the investment firmBridgewater Associates, which seeks to distinguish itself through its pursuit of transparency and honesty, screening out potential hires who couldn’t handle criticism made good business sense.

But in many organizations, fit has gone rogue. I saw this firsthand while researching the hiring practices of the country’s top investment banks, management consultancies and law firms. I interviewed 120 decision makers and spent nine months observing the recruiting practices of one firm in particular. The professionals I spoke with, who were charged with reviewing applications and conducting interviews, consistently underscored the importance of cultural fit in hiring. While résumés (and connections) influenced which applicants made it into the interview room, interviewers’ perceptions of fit strongly shaped who walked out with job offers.

Crucially, though, for these gatekeepers, fit was not about a match with organizational values. It was about personal fit. In these time- and team-intensive jobs, professionals at all levels of seniority reported wanting to hire people with whom they enjoyed hanging out and could foresee developing close relationships with. Fit was different from the ability to get along with clients. Fundamentally, it was about interviewers’ personal enjoyment and fun. Many, like one manager at a consulting firm, believed that “when it’s done right, work is play.”

To judge fit, interviewers commonly relied on chemistry. “The best way I could describe it,” one member of a law firm’s hiring committee told me, “is like if you were on a date. You kind of know when there’s a match.” Many used the “airport test.” As a managing director at an investment bank put it, “Would I want to be stuck in an airport in Minneapolis in a snowstorm with them?”

Selecting new employees based on personal similarities is by no means unique to banking, consulting or law; it has become a common feature of American corporate culture. Employers routinely ask job applicants about their hobbies and what they like to do for fun, while a complementary self-help industry informs white-collar job seekers that chemistry, not qualifications, will win them an offer.

Although diversity in many industries has increased in recent decades, progress in the corporate realm has been slower than expected. Selection based on personal fit can keep demographic and cultural diversity low. In the elite firms I studied, the types of shared experiences associated with fit typically required large investments of time and money.

Class-biased definitions of fit are one reason investment banks, management consulting firms and law firms are dominated by people from the highest socioeconomic backgrounds. Also, whether the industry is finance, high-tech or fashion, a good fit in most American corporations still tends to be stereotypically masculine. Consequently, fit can exclude high-performing candidates — female or male — who are more stereotypically feminine.

Some may wonder, “Don’t similar people work better together?” Yes and no. For jobs involving complex decisions and creativity, more diverse teams outperform less diverse ones. Too much similarity can lead to teams that are overconfident, ignore vital information and make poor (or even unethical) decisions.

Perhaps most important, it is easy to mistake rapport for skill. Just as they erroneously believe that they can accurately tell when someone is lying, people tend to be overly confident in their ability to spot talent. Unstructured interviews, which are the most popular hiring tools for American managers and the primary way they judge fit, are notoriouslypoor predictors of job performance.

Fit can work, but personal similarity is not the key. Organizations that use cultural fit for competitive advantage tend to favor concrete tools like surveys and structured interviews that systematically test behaviors associated with increased performance and employee retention. For managers who want to use cultural fit in a more productive way, I have several suggestions.

First, communicate a clear and consistent idea of what the organization’s culture is (and is not) to potential employees. Second, make sure the definition of cultural fit is closely aligned with business goals. Ideally, fit should be based on data-driven analysis of what types of values, traits and behaviors actually predict on-the-job success. Third, create formal procedures like checklists for measuring fit, so that assessment is not left up to the eyes (and extracurriculars) of the beholder.

Finally, consider putting concrete limits on how much fit can sway hiring. Many organizations tell interviewers what to look for but provide little guidance about how to weigh these different qualities. Left to their own devices, interviewers often define merit in their own image.

Wanting to work with people like ourselves is not new. In the past, employers overtly restricted job opportunities based on sex, race and religion, which is now illegal. But cultural fit has become a new form of discrimination that keeps demographic and cultural diversity down, all in the name of employee enjoyment and fun.

One More Time: How Do You Motivate Employees? – by Frederick Herzberg

Ask workers what makes them unhappy at work, and you’ll hear about an annoying boss, a low salary, an uncomfortable work space, or stupid rules. Managed badly, environmental factors make people miserable, and they can certainly be demotivating. But even if managed brilliantly, they don’t motivate anybody to work much harder or smarter. People are motivated, instead, by interesting work, challenge, and increasing responsibility. These intrinsic factors answer people’s deep-seated need for growth and achievement.

Herzberg’s work influenced a generation of scholars and managers—but his conclusions don’t seem to have fully penetrated the American workplace, if the extraordinary attention still paid to compensation and incentive packages is any indication.

How many articles, books, speeches, and workshops have pleaded plaintively, “How do I get an employee to do what I want?”

The psychology of motivation is tremendously complex, and what has been unraveled with any degree of assurance is small indeed. But the dismal ratio of knowledge to speculation has not dampened the enthusiasm for new forms of snake oil that are constantly coming on the market, many of them with academic testimonials. Doubtless this article will have no depressing impact on the market for snake oil, but since the ideas expressed in it have been tested in many corporations and other organizations, it will help—I hope—to redress the imbalance in the aforementioned ratio.

“Motivating” with KITA

In lectures to industry on the problem, I have found that the audiences are usually anxious for quick and practical answers, so I will begin with a straightforward, practical formula for moving people.

What is the simplest, surest, and most direct way of getting someone to do something? Ask? But if the person responds that he or she does not want to do it, then that calls for psychological consultation to determine the reason for such obstinacy. Tell the person? The response shows that he or she does not understand you, and now an expert in communication methods has to be brought in to show you how to get through. Give the person a monetary incentive? I do not need to remind the reader of the complexity and difficulty involved in setting up and administering an incentive system. Show the person? This means a costly training program. We need a simple way.

Every audience contains the “direct action” manager who shouts, “Kick the person!” And this type of manager is right. The surest and least circumlocuted way of getting someone to do something is to administer a kick in the pants—to give what might be called the KITA.

There are various forms of KITA, and here are some of them:

Negative Physical KITA.

This is a literal application of the term and was frequently used in the past. It has, however, three major drawbacks: 1) It is inelegant; 2) it contradicts the precious image of benevolence that most organizations cherish; and 3) since it is a physical attack, it directly stimulates the autonomic nervous system, and this often results in negative feedback—the employee may just kick you in return. These factors give rise to certain taboos against negative physical KITA.

In uncovering infinite sources of psychological vulnerabilities and the appropriate methods to play tunes on them, psychologists have come to the rescue of those who are no longer permitted to use negative physical KITA. “He took my rug away”; “I wonder what she meant by that”; “The boss is always going around me”—these symptomatic expressions of ego sores that have been rubbed raw are the result of application of:

Negative Psychological KITA.

This has several advantages over negative physical KITA. First, the cruelty is not visible; the bleeding is internal and comes much later. Second, since it affects the higher cortical centers of the brain with its inhibitory powers, it reduces the possibility of physical backlash. Third, since the number of psychological pains that a person can feel is almost infinite, the direction and site possibilities of the KITA are increased many times. Fourth, the person administering the kick can manage to be above it all and let the system accomplish the dirty work. Fifth, those who practice it receive some ego satisfaction (one-upmanship), whereas they would find drawing blood abhorrent. Finally, if the employee does complain, he or she can always be accused of being paranoid; there is no tangible evidence of an actual attack.

Now, what does negative KITA accomplish? If I kick you in the rear (physically or psychologically), who is motivated? I am motivated; you move! Negative KITA does not lead to motivation, but to movement. So:

Positive KITA.

Let us consider motivation. If I say to you, “Do this for me or the company, and in return I will give you a reward, an incentive, more status, a promotion, all the quid pro quos that exist in the industrial organization,” am I motivating you? The overwhelming opinion I receive from management people is, “Yes, this is motivation.”

I have a year-old schnauzer. When it was a small puppy and I wanted it to move, I kicked it in the rear and it moved. Now that I have finished its obedience training, I hold up a dog biscuit when I want the schnauzer to move. In this instance, who is motivated—I or the dog? The dog wants the biscuit, but it is I who want it to move. Again, I am the one who is motivated, and the dog is the one who moves. In this instance all I did was apply KITA frontally; I exerted a pull instead of a push. When industry wishes to use such positive KITAs, it has available an incredible number and variety of dog biscuits (jelly beans for humans) to wave in front of employees to get them to jump.

Myths About Motivation

Why is KITA not motivation? If I kick my dog (from the front or the back), he will move. And when I want him to move again, what must I do? I must kick him again. Similarly, I can charge a person’s battery, and then recharge it, and recharge it again. But it is only when one has a generator of one’s own that we can talk about motivation. One then needs no outside stimulation. One wants to do it.

With this in mind, we can review some positive KITA personnel practices that were developed as attempts to instill “motivation”:

1. Reducing Time Spent at Work.

This represents a marvelous way of motivating people to work—getting them off the job! We have reduced (formally and informally) the time spent on the job over the last 50 or 60 years until we are finally on the way to the “6½-day weekend.” An interesting variant of this approach is the development of off-hour recreation programs. The philosophy here seems to be that those who play together, work together. The fact is that motivated people seek more hours of work, not fewer.

2. Spiraling Wages.

Have these motivated people? Yes, to seek the next wage increase. Some medievalists still can be heard to say that a good depression will get employees moving. They feel that if rising wages don’t or won’t do the job, reducing them will.

3. Fringe Benefits.

Industry has outdone the most welfare-minded of welfare states in dispensing cradle-to-the-grave succor. One company I know of had an informal “fringe benefit of the month club” going for a while. The cost of fringe benefits in this country has reached approximately 25% of the wage dollar, and we still cry for motivation.

People spend less time working for more money and more security than ever before, and the trend cannot be reversed. These benefits are no longer rewards; they are rights. A 6-day week is inhuman, a 10-hour day is exploitation, extended medical coverage is a basic decency, and stock options are the salvation of American initiative. Unless the ante is continuously raised, the psychological reaction of employees is that the company is turning back the clock.

When industry began to realize that both the economic nerve and the lazy nerve of their employees had insatiable appetites, it started to listen to the behavioral scientists who, more out of a humanist tradition than from scientific study, criticized management for not knowing how to deal with people. The next KITA easily followed.

4. Human Relations Training.

More than 30 years of teaching and, in many instances, of practicing psychological approaches to handling people have resulted in costly human relations programs and, in the end, the same question: How do you motivate workers? Here, too, escalations have taken place. Thirty years ago it was necessary to request, “Please don’t spit on the floor.” Today the same admonition requires three “pleases” before the employee feels that a superior has demonstrated the psychologically proper attitude.

The failure of human relations training to produce motivation led to the conclusion that supervisors or managers themselves were not psychologically true to themselves in their practice of interpersonal decency. So an advanced form of human relations KITA, sensitivity training, was unfolded.

5. Sensitivity Training.

Do you really, really understand yourself? Do you really, really, really trust other people? Do you really, really, really, really cooperate? The failure of sensitivity training is now being explained, by those who have become opportunistic exploiters of the technique, as a failure to really (five times) conduct proper sensitivity training courses.

With the realization that there are only temporary gains from comfort and economic and interpersonal KITA, personnel managers concluded that the fault lay not in what they were doing, but in the employee’s failure to appreciate what they were doing. This opened up the field of communications, a new area of “scientifically” sanctioned KITA.

6. Communications.

The professor of communications was invited to join the faculty of management training programs and help in making employees understand what management was doing for them. House organs, briefing sessions, supervisory instruction on the importance of communication, and all sorts of propaganda have proliferated until today there is even an International Council of Industrial Editors. But no motivation resulted, and the obvious thought occurred that perhaps management was not hearing what the employees were saying. That led to the next KITA.

7. Two-Way Communication.

Management ordered morale surveys, suggestion plans, and group participation programs. Then both management and employees were communicating and listening to each other more than ever, but without much improvement in motivation.

The behavioral scientists began to take another look at their conceptions and their data, and they took human relations one step further. A glimmer of truth was beginning to show through in the writings of the so-called higher-order-need psychologists. People, so they said, want to actualize themselves. Unfortunately, the “actualizing” psychologists got mixed up with the human relations psychologists, and a new KITA emerged.

8. Job Participation.

Though it may not have been the theoretical intention, job participation often became a “give them the big picture” approach. For example, if a man is tightening 10,000 nuts a day on an assembly line with a torque wrench, tell him he is building a Chevrolet. Another approach had the goal of giving employees a “feeling” that they are determining, in some measure, what they do on the job. The goal was to provide a sense of achievement rather than a substantive achievement in the task. Real achievement, of course, requires a task that makes it possible.

But still there was no motivation. This led to the inevitable conclusion that the employees must be sick, and therefore to the next KITA.

9. Employee Counseling.

The initial use of this form of KITA in a systematic fashion can be credited to the Hawthorne experiment of the Western Electric Company during the early 1930s. At that time, it was found that the employees harbored irrational feelings that were interfering with the rational operation of the factory. Counseling in this instance was a means of letting the employees unburden themselves by talking to someone about their problems. Although the counseling techniques were primitive, the program was large indeed.

The counseling approach suffered as a result of experiences during World War II, when the programs themselves were found to be interfering with the operation of the organizations; the counselors had forgotten their role of benevolent listeners and were attempting to do something about the problems that they heard about. Psychological counseling, however, has managed to survive the negative impact of World War II experiences and today is beginning to flourish with renewed sophistication. But, alas, many of these programs, like all the others, do not seem to have lessened the pressure of demands to find out how to motivate workers.

Since KITA results only in short-term movement, it is safe to predict that the cost of these programs will increase steadily and new varieties will be developed as old positive KITAs reach their satiation points.

Hygiene vs. Motivators

Let me rephrase the perennial question this way: How do you install a generator in an employee? A brief review of my motivation-hygiene theory of job attitudes is required before theoretical and practical suggestions can be offered. The theory was first drawn from an examination of events in the lives of engineers and accountants. At least 16 other investigations, using a wide variety of populations (including some in the Communist countries), have since been completed, making the original research one of the most replicated studies in the field of job attitudes.

The findings of these studies, along with corroboration from many other investigations using different procedures, suggest that the factors involved in producing job satisfaction (and motivation) are separate and distinct from the factors that lead to job dissatisfaction. (See Exhibit 1, which is further explained below.) Since separate factors need to be considered, depending on whether job satisfaction or job dissatisfaction is being examined, it follows that these two feelings are not opposites of each other. The opposite of job satisfaction is not job dissatisfaction but, rather, no job satisfaction; and similarly, the opposite of job dissatisfaction is not job satisfaction, but no job dissatisfaction.

Stating the concept presents a problem in semantics, for we normally think of satisfaction and dissatisfaction as opposites; i.e., what is not satisfying must be dissatisfying, and vice versa. But when it comes to understanding the behavior of people in their jobs, more than a play on words is involved.

Two different needs of human beings are involved here. One set of needs can be thought of as stemming from humankind’s animal nature—the built-in drive to avoid pain from the environment, plus all the learned drives that become conditioned to the basic biological needs. For example, hunger, a basic biological drive, makes it necessary to earn money, and then money becomes a specific drive. The other set of needs relates to that unique human characteristic, the ability to achieve and, through achievement, to experience psychological growth. The stimuli for the growth needs are tasks that induce growth; in the industrial setting, they are the job content. Contrariwise, the stimuli inducing pain-avoidance behavior are found in the job environment.

The growth or motivator factors that are intrinsic to the job are: achievement, recognition for achievement, the work itself, responsibility, and growth or advancement. The dissatisfaction-avoidance or hygiene (KITA) factors that are extrinsic to the job include: company policy and administration, supervision, interpersonal relationships, working conditions, salary, status, and security.

A composite of the factors that are involved in causing job satisfaction and job dissatisfaction, drawn from samples of 1,685 employees, is shown in Exhibit 1. The results indicate that motivators were the primary cause of satisfaction, and hygiene factors the primary cause of unhappiness on the job. The employees, studied in 12 different investigations, included lower level supervisors, professional women, agricultural administrators, men about to retire from management positions, hospital maintenance personnel, manufacturing supervisors, nurses, food handlers, military officers, engineers, scientists, housekeepers, teachers, technicians, female assemblers, accountants, Finnish foremen, and Hungarian engineers.

They were asked what job events had occurred in their work that had led to extreme satisfaction or extreme dissatisfaction on their part. Their responses are broken down in the exhibit into percentages of total “positive” job events and of total “negative” job events. (The figures total more than 100% on both the “hygiene” and “motivators” sides because often at least two factors can be attributed to a single event; advancement, for instance, often accompanies assumption of responsibility.)

To illustrate, a typical response involving achievement that had a negative effect for the employee was, “I was unhappy because I didn’t do the job successfully.” A typical response in the small number of positive job events in the company policy and administration grouping was, “I was happy because the company reorganized the section so that I didn’t report any longer to the guy I didn’t get along with.”

As the lower right-hand part of the exhibit shows, of all the factors contributing to job satisfaction, 81% were motivators. And of all the factors contributing to the employees’ dissatisfaction over their work, 69% involved hygiene elements.

Eternal Triangle.

There are three general philosophies of personnel management. The first is based on organizational theory, the second on industrial engineering, and the third on behavioral science.

Organizational theorists believe that human needs are either so irrational or so varied and adjustable to specific situations that the major function of personnel management is to be as pragmatic as the occasion demands. If jobs are organized in a proper manner, they reason, the result will be the most efficient job structure, and the most favorable job attitudes will follow as a matter of course.

Industrial engineers hold that humankind is mechanistically oriented and economically motivated and that human needs are best met by attuning the individual to the most efficient work process. The goal of personnel management therefore should be to concoct the most appropriate incentive system and to design the specific working conditions in a way that facilitates the most efficient use of the human machine. By structuring jobs in a manner that leads to the most efficient operation, engineers believe that they can obtain the optimal organization of work and the proper work attitudes.

Behavioral scientists focus on group sentiments, attitudes of individual employees, and the organization’s social and psychological climate. This persuasion emphasizes one or more of the various hygiene and motivator needs. Its approach to personnel management is generally to emphasize some form of human relations education, in the hope of instilling healthy employee attitudes and an organizational climate that is considered to be felicitous to human values. The belief is that proper attitudes will lead to efficient job and organizational structure.

There is always a lively debate concerning the overall effectiveness of the approaches of organizational theorists and industrial engineers. Manifestly, both have achieved much. But the nagging question for behavioral scientists has been: What is the cost in human problems that eventually cause more expense to the organization—for instance, turnover, absenteeism, errors, violation of safety rules, strikes, restriction of output, higher wages, and greater fringe benefits? On the other hand, behavioral scientists are hard put to document much manifest improvement in personnel management, using their approach.

The motivation-hygiene theory suggests that work be enriched to bring about effective utilization of personnel. Such a systematic attempt to motivate employees by manipulating the motivator factors is just beginning. The term job enrichment describes this embryonic movement. An older term, job enlargement, should be avoided because it is associated with past failures stemming from a misunderstanding of the problem. Job enrichment provides the opportunity for the employee’s psychological growth, while job enlargement merely makes a job structurally bigger. Since scientific job enrichment is very new, this article only suggests the principles and practical steps that have recently emerged from several successful experiments in industry.

Job Loading.

In attempting to enrich certain jobs, management often reduces the personal contribution of employees rather than giving them opportunities for growth in their accustomed jobs. Such endeavors, which I shall call horizontal job loading (as opposed to vertical loading, or providing motivator factors), have been the problem of earlier job enlargement programs. Job loading merely enlarges the meaninglessness of the job. Some examples of this approach, and their effect, are:

  • Challenging the employee by increasing the amount of production expected. If each tightens 10,000 bolts a day, see if each can tighten 20,000 bolts a day. The arithmetic involved shows that multiplying zero by zero still equals zero.
  • Adding another meaningless task to the existing one, usually some routine clerical activity. The arithmetic here is adding zero to zero.
  • Rotating the assignments of a number of jobs that need to be enriched. This means washing dishes for a while, then washing silverware. The arithmetic is substituting one zero for another zero.
  • Removing the most difficult parts of the assignment in order to free the worker to accomplish more of the less challenging assignments. This traditional industrial engineering approach amounts to subtraction in the hope of accomplishing addition.

These are common forms of horizontal loading that frequently come up in preliminary brainstorming sessions of job enrichment. The principles of vertical loading have not all been worked out as yet, and they remain rather general, but I have furnished seven useful starting points for consideration in Exhibit 2.

A Successful Application.

An example from a highly successful job enrichment experiment can illustrate the distinction between horizontal and vertical loading of a job. The subjects of this study were the stockholder correspondents employed by a very large corporation. Seemingly, the task required of these carefully selected and highly trained correspondents was quite complex and challenging. But almost all indexes of performance and job attitudes were low, and exit interviewing confirmed that the challenge of the job existed merely as words.

A job enrichment project was initiated in the form of an experiment with one group, designated as an achieving unit, having its job enriched by the principles described in Exhibit 2. A control group continued to do its job in the traditional way. (There were also two “uncommitted” groups of correspondents formed to measure the so-called Hawthorne effect—that is, to gauge whether productivity and attitudes toward the job changed artificially merely because employees sensed that the company was paying more attention to them in doing something different or novel. The results for these groups were substantially the same as for the control group, and for the sake of simplicity I do not deal with them in this summary.) No changes in hygiene were introduced for either group other than those that would have been made anyway, such as normal pay increases.

The changes for the achieving unit were introduced in the first two months, averaging one per week of the seven motivators listed in Exhibit 2. At the end of six months the members of the achieving unit were found to be outperforming their counterparts in the control group and, in addition, indicated a marked increase in their liking for their jobs. Other results showed that the achieving group had lower absenteeism and, subsequently, a much higher rate of promotion.

Exhibit 3 illustrates the changes in performance, measured in February and March, before the study period began, and at the end of each month of the study period. The shareholder service index represents quality of letters, including accuracy of information, and speed of response to stockholders’ letters of inquiry. The index of a current month was averaged into the average of the two prior months, which means that improvement was harder to obtain if the indexes of the previous months were low. The “achievers” were performing less well before the six-month period started, and their performance service index continued to decline after the introduction of the motivators, evidently because of uncertainty after their newly granted responsibilities. In the third month, however, performance improved, and soon the members of this group had reached a high level of accomplishment.

Exhibit 4 shows the two groups’ attitudes toward their job, measured at the end of March, just before the first motivator was introduced, and again at the end of September. The correspondents were asked 16 questions, all involving motivation. A typical one was, “As you see it, how many opportunities do you feel that you have in your job for making worthwhile contributions?” The answers were scaled from 1 to 5, with 80 as the maximum possible score. The achievers became much more positive about their job, while the attitude of the control unit remained about the same (the drop is not statistically significant).

How was the job of these correspondents restructured? Exhibit 5 lists the suggestions made that were deemed to be horizontal loading, and the actual vertical loading changes that were incorporated in the job of the achieving unit. The capital letters under “Principle” after “Vertical Loading” refer to the corresponding letters in Exhibit 2. The reader will note that the rejected forms of horizontal loading correspond closely to the list of common manifestations I mentioned earlier.

Steps for Job Enrichment

Now that the motivator idea has been described in practice, here are the steps that managers should take in instituting the principle with their employees:

1. Select those jobs in which a) the investment in industrial engineering does not make changes too costly, b) attitudes are poor, c) hygiene is becoming very costly, and d) motivation will make a difference in performance.

2. Approach these jobs with the conviction that they can be changed. Years of tradition have led managers to believe that job content is sacrosanct and the only scope of action that they have is in ways of stimulating people.

3. Brainstorm a list of changes that may enrich the jobs, without concern for their practicality.

4. Screen the list to eliminate suggestions that involve hygiene, rather than actual motivation.

5. Screen the list for generalities, such as “give them more responsibility,” that are rarely followed in practice. This might seem obvious, but the motivator words have never left industry; the substance has just been rationalized and organized out. Words like “responsibility,” “growth,” “achievement,” and “challenge,” for example, have been elevated to the lyrics of the patriotic anthem for all organizations. It is the old problem typified by the pledge of allegiance to the flag being more important than contributions to the country—of following the form, rather than the substance.

6. Screen the list to eliminate any horizontal loading suggestions.

7. Avoid direct participation by the employees whose jobs are to be enriched. Ideas they have expressed previously certainly constitute a valuable source for recommended changes, but their direct involvement contaminates the process with human relations hygiene and, more specifically, gives them only a sense of making a contribution. The job is to be changed, and it is the content that will produce the motivation, not attitudes about being involved or the challenge inherent in setting up a job. That process will be over shortly, and it is what the employees will be doing from then on that will determine their motivation. A sense of participation will result only in short-term movement.

8. In the initial attempts at job enrichment, set up a controlled experiment. At least two equivalent groups should be chosen, one an experimental unit in which the motivators are systematically introduced over a period of time, and the other one a control group in which no changes are made. For both groups, hygiene should be allowed to follow its natural course for the duration of the experiment. Pre- and post-installation tests of performance and job attitudes are necessary to evaluate the effectiveness of the job enrichment program. The attitude test must be limited to motivator items in order to divorce employees’ views of the jobs they are given from all the surrounding hygiene feelings that they might have.

9. Be prepared for a drop in performance in the experimental group the first few weeks. The changeover to a new job may lead to a temporary reduction in efficiency.

10. Expect your first-line supervisors to experience some anxiety and hostility over the changes you are making. The anxiety comes from their fear that the changes will result in poorer performance for their unit. Hostility will arise when the employees start assuming what the supervisors regard as their own responsibility for performance. The supervisor without checking duties to perform may then be left with little to do.

After successful experiment, however, the supervisors usually discover the supervisory and managerial functions they have neglected, or which were never theirs because all their time was given over to checking the work of their subordinates. For example, in the R&D division of one large chemical company I know of, the supervisors of the laboratory assistants were theoretically responsible for their training and evaluation. These functions, however, had come to be performed in a routine, unsubstantial fashion. After the job enrichment program, during which the supervisors were not merely passive observers of the assistants’ performance, the supervisors actually were devoting their time to reviewing performance and administering thorough training.

What has been called an employee-centered style of supervision will come about not through education of supervisors, but by changing the jobs that they do.

• • •Job enrichment will not be a one-time proposition, but a continuous management function. The initial changes should last for a very long period of time. There are a number of reasons for this:

  • The changes should bring the job up to the level of challenge commensurate with the skill that was hired.
  • Those who have still more ability eventually will be able to demonstrate it better and win promotion to higher level jobs.
  • The very nature of motivators, as opposed to hygiene factors, is that they have a much longer-term effect on employees’ attitudes. It is possible that the job will have to be enriched again, but this will not occur as frequently as the need for hygiene.

Not all jobs can be enriched, nor do all jobs need to be enriched. If only a small percentage of the time and money that is now devoted to hygiene, however, were given to job enrichment efforts, the return in human satisfaction and economic gain would be one of the largest dividends that industry and society have ever reaped through their efforts at better personnel management.

The argument for job enrichment can be summed up quite simply: If you have employees on a job, use them. If you can’t use them on the job, get rid of them, either via automation or by selecting someone with lesser ability. If you can’t use them and you can’t get rid of them, you will have a motivation problem.

Frederick Herzberg, Distinguished Professor of Management at the University of Utah in Salt Lake City, was head of the department of psychology at Case Western Reserve University in Cleveland when he wrote this article. His writings include the book Work and the Nature of Man (World, 1966).

How Google Sold Its Engineers on Management – by David A. Garvin

A few years into the company’s life, founders Larry Page and Sergey Brin actually wondered whether Google needed any managers at all. In 2002 they experimented with a completely flat organization, eliminating engineering managers in an effort to break down barriers to rapid idea development and to replicate the collegial environment they’d enjoyed in graduate school. That experiment lasted only a few months: They relented when too many people went directly to Page with questions about expense reports, interpersonal conflicts, and other nitty-gritty issues. And as the company grew, the founders soon realized that managers contributed in many other, important ways—for instance, by communicating strategy, helping employees prioritize projects, facilitating collaboration, supporting career development, and ensuring that processes and systems aligned with company goals.

Google now has some layers but not as many as you might expect in an organization with more than 37,000 employees: just 5,000 managers, 1,000 directors, and 100 vice presidents. It’s not uncommon to find engineering managers with 30 direct reports. Flatt says that’s by design, to prevent micromanaging. “There is only so much you can meddle when you have 30 people on your team, so you have to focus on creating the best environment for engineers to make things happen,” he notes. Google gives its rank and file room to make decisions and innovate. Along with that freedom comes a greater respect for technical expertise, skillful problem solving, and good ideas than for titles and formal authority. Given the overall indifference to pecking order, anyone making a case for change at the company needs to provide compelling logic and rich supporting data. Seldom do employees accept top-down directives without question.

Google downplays hierarchy and emphasizes the power of the individual in its recruitment efforts, as well, to achieve the right cultural fit. Using a rigorous, data-driven hiring process, the company goes to great lengths to attract young, ambitious self-starters and original thinkers. It screens candidates’ résumés for markers that indicate potential to excel there—especially general cognitive ability. People who make that first cut are then carefully assessed for initiative, flexibility, collaborative spirit, evidence of being well-rounded, and other factors that make a candidate “Googley.”

So here’s the challenge Google faced: If your highly skilled, handpicked hires don’t value management, how can you run the place effectively? How do you turn doubters into believers, persuading them to spend time managing others? As it turns out, by applying the same analytical rigor and tools that you used to hire them in the first place—and that they set such store by in their own work. You use data to test your assumptions about management’s merits and then make your case.

To understand how Google set out to prove managers’ worth, let’s go back to 2006, when Page and Brin brought in Laszlo Bock to head up the human resources function—appropriately called people operations, or people ops. From the start, people ops managed performance reviews, which included annual 360-degree assessments. It also helped conduct and interpret the Googlegeist employee survey on career development goals, perks, benefits, and company culture. A year later, with that foundation in place, Bock hired Prasad Setty from Capital One to lead a people analytics group. He challenged Setty to approach HR with the same empirical discipline Google applied to its business operations.

Setty took him at his word, recruiting several PhDs with serious research chops. This new team was committed to leading organizational change. “I didn’t want our group to be simply a reporting house,” Setty recalls. “Organizations can get bogged down in all that data. Instead, I wanted us to be hypothesis-driven and help solve company problems and questions with data.”

People analytics then pulled together a small team to tackle issues relating to employee well-being and productivity. In early 2009 it presented its initial set of research questions to Setty. One question stood out, because it had come up again and again since the company’s founding: Do managers matter?

To find the answer, Google launched Project Oxygen, a multiyear research initiative. It has since grown into a comprehensive program that measures key management behaviors and cultivates them through communication and training. By November 2012, employees had widely adopted the program—and the company had shown statistically significant improvements in multiple areas of managerial effectiveness and performance.

Google is one of several companies that are applying analytics in new ways. Until recently, organizations used data-driven decision making mainly in product development, marketing, and pricing. But these days, Google, Procter & Gamble, Harrah’s, and others take that same approach in addressing human resources needs. (See “Competing on Talent Analytics,” by Thomas H. Davenport, Jeanne Harris, and Jeremy Shapiro, HBR October 2010.)

Unfortunately, scholars haven’t done enough to help these organizations understand and improve day-to-day management practice. Compared with leadership, managing remains understudied and undertaught—largely because it’s so difficult to describe, precisely and concretely, what managers actually do. We often say that they get things done through other people, yet we don’t usually spell out how in any detail. Project Oxygen, in contrast, was designed to offer granular, hands-on guidance. It didn’t just identify desirable management traits in the abstract; it pinpointed specific, measurable behaviors that brought those traits to life.

That’s why Google employees let go of their skepticism and got with the program. Project Oxygen mirrored their decision-making criteria, respected their need for rigorous analysis, and made it a priority to measure impact. Data-driven cultures, Google discovered, respond well to data-driven change.

Making the CaseProject Oxygen colead Neal Patel recalls, “We knew the team had to be careful. Google has high standards of proof, even for what, at other places, might be considered obvious truths. Simple correlations weren’t going to be enough. So we actually ended up trying to prove the opposite case—that managers don’t matter. Luckily, we failed.”

To begin, Patel and his team reviewed exit-interview data to see if employees cited management issues as a reason for leaving Google. Though they found some connections between turnover rates and low satisfaction with managers, those didn’t apply to the company more broadly, given the low turnover rates overall. Nor did the findings prove that managers caused attrition.

As a next step, Patel examined Googlegeist ratings and semiannual reviews, comparing managers on both satisfaction and performance. For both dimensions, he looked at the highest and lowest scorers (the top and bottom quartiles).

“At first,” he says, “the numbers were not encouraging. Even the low-scoring managers were doing pretty well. How could we find evidence that better management mattered when all managers seemed so similar?” The solution came from applying sophisticated multivariate statistical techniques, which showed that even “the smallest incremental increases in manager quality were quite powerful.”

For example, in 2008, the high-scoring managers saw less turnover on their teams than the others did—and retention was related more strongly to manager quality than to seniority, performance, tenure, or promotions. The data also showed a tight connection between managers’ quality and workers’ happiness: Employees with high-scoring bosses consistently reported greater satisfaction in multiple areas, including innovation, work-life balance, and career development.

In light of this research, the Project Oxygen team concluded that managers indeed mattered. But to act on that finding, Google first had to figure out what its best managers did. So the researchers followed up with double-blind qualitative interviews, asking the high- and low-scoring managers questions such as “How often do you have career development discussions with your direct reports?” and “What do you do to develop a vision for your team?” Managers from Google’s three major functions (engineering, global business, and general and administrative) participated; they came from all levels and geographies. The team also studied thousands of qualitative comments from Googlegeist surveys, performance reviews, and submissions for the company’s Great Manager Award. (Each year, Google selects about 20 managers for this distinction, on the basis of employees’ nominations.) It took several months to code and process all this information.

After much review, Oxygen identified eight behaviors shared by high-scoring managers. (See the sidebar “What Google’s Best Managers Do” for the complete list.) Even though the behaviors weren’t terribly surprising, Patel’s colead, Michelle Donovan, says, “we hoped that the list would resonate because it was based on Google data. The attributes were about us, by us, and for us.”

The key behaviors primarily describe leaders of small and medium-sized groups and teams and are especially relevant to first- and second-level managers. They involve developing and motivating direct reports, as well as communicating strategy and eliminating roadblocks—all vital activities that people tend to overlook in the press of their day-to-day responsibilities.

Putting the Findings into PracticeThe list of behaviors has served three important functions at Google: giving employees a shared vocabulary for discussing management, offering them straightforward guidelines for improving it, and encapsulating the full range of management responsibilities. Though the list is simple and straightforward, it’s enriched by examples and descriptions of best practices—in survey participants’ own words. These details make the overarching principles, such as “empowers the team and does not micromanage,” more concrete and show managers different ways of enacting them. (See the exhibit “How Google Defines One Key Behavior.”)

The descriptions of the eight behaviors also allow considerable tailoring. They’re inclusive guidelines, not rigid formulas. That said, it was clear early on that managers would need help adopting the new standards, so people ops built assessments and a training program around the Oxygen findings.

To improve the odds of acceptance, the group customized the survey instrument, creating an upward feedback survey (UFS) for employees in administrative and global business functions and a tech managers survey (TMS) for the engineers. Both assessments asked employees to evaluate their managers (using a five-point scale) on a core set of activities—such as giving actionable feedback regularly and communicating team goals clearly—all of which related directly to the key management behaviors.

The first surveys went out in June 2010—deliberately out of sync with performance reviews, which took place in April and September. (Google had initially considered linking the scores with performance reviews but decided that would increase resistance to the Oxygen program because employees would view it as a top-down imposition of standards.) People ops emphasized confidentiality and issued frequent reminders that the surveys were strictly for self-improvement. “Project Oxygen was always meant to be a developmental tool, not a performance metric,” says Mary Kate Stimmler, an analyst in the department. “We realized that anonymous surveys are not always fair, and there is often a context behind low scores.”

Though the surveys weren’t mandatory, the vast majority of employees completed them. Soon afterward, managers received reports with numerical scores and individual comments—feedback they were urged to share with their teams. (See the exhibit “One Manager’s Feedback” for a representative sample.) The reports explicitly tied individuals’ scores to the eight behaviors, included links to more information about best practices, and suggested actions each manager could take to improve. Someone with, say, unfavorable scores in coaching might get a recommendation to take a class on how to deliver personalized, balanced feedback.

People ops designed the training to be hands-on and immediately useful. In “vision” classes, for example, participants practiced writing vision statements for their departments or teams and bringing the ideas to life with compelling stories. In 2011, Google added Start Right, a two-hour workshop for new managers, and Manager Flagship courses on popular topics such as managing change, which were offered in three two-day modules over six months. “We have a team of instructors,” says people-development manager Kathrin O’Sullivan, “and we are piloting online Google Hangout classes so managers from around the world can participate.”

Managers have expressed few concerns about signing up for the courses and going public with the changes they need to make. Eric Clayberg, for one, has found his training invaluable. A seasoned software-engineering manager and serial entrepreneur, Clayberg had led teams for 18 years before Google bought his latest start-up. But he feels he learned more about management in six months of Oxygen surveys and people ops courses than in the previous two decades. “For instance,” he says, “I was worried about the flat organizational structure at Google; I knew it would be hard to help people on my team get promoted. I learned in the classes about how to provide career development beyond promotions. I now spend a third to half my time looking for ways to help my team members grow.” And to his surprise, his reports have welcomed his advice. “Engineers hate being micromanaged on the technical side,” he observes, “but they love being closely managed on the career side.”

To complement the training, the development team sets up panel discussions featuring high-scoring managers from each function. That way, employees get advice from colleagues they respect, not just from HR. People ops also sends new managers automated e-mail reminders with tips on how to succeed at Google, links to relevant Oxygen findings, and information about courses they haven’t taken.

And Google rewards the behaviors it’s working so hard to promote. The company has revamped its selection criteria for the Great Manager Award to reflect the eight Oxygen behaviors. Employees refer to the behaviors and cite specific examples when submitting nominations. Clayberg has received the award, and he believes it was largely because of the skills he acquired through his Oxygen training. The prize includes a weeklong trip to a destination such as Hawaii, where winners get to spend time with senior executives. Recipients go places in the company, too. “In the last round of promotions to vice president,” Laszlo Bock says, “10% of the directors promoted were winners of the Great Manager Award.”

Measuring ResultsThe people ops team has analyzed Oxygen’s impact by examining aggregate survey data and qualitative input from individuals. From 2010 through 2012, UFS and TMS median favorability scores rose from 83% to 88%. The lowest-scoring managers improved the most, particularly in the areas of coaching and career development. The improvements were consistent across functions, survey categories, management levels, spans of control, and geographic regions.

In an environment of top achievers, people take low scores seriously. Consider vice president Sebastien Marotte, who came to Google in 2011 from a senior sales role at Oracle. During his first six months at Google, Marotte focused on meeting his sales numbers (and did so successfully) while managing a global team of 150 people. Then he received his first UFS scores, which came as a shock. “I asked myself, ‘Am I right for this company? Should I go back to Oracle?’ There seemed to be a disconnect,” he says, “because my manager had rated me favorably in my first performance review, yet my UFS scores were terrible.” Then, with help from a people ops colleague, Marotte took a step back and thought about what changes he could make. He recalls, “We went through all the comments and came up with a plan. I fixed how I communicated with my team and provided more visibility on our long-term strategy. Within two survey cycles, I raised my favorability ratings from 46% to 86%. It’s been tough but very rewarding. I came here as a senior sales guy, but now I feel like a general manager.”

Overall, other managers took the feedback as constructively as Marotte did—and were especially grateful for its specificity. Here’s what Stephanie Davis, director of large-company sales and another winner of the Great Manager Award, says she learned from her first feedback report: “I was surprised that one person on my team didn’t think I had regularly scheduled one-on-one meetings. I saw this person every day, but the survey helped me realize that just seeing this person was different from having regularly scheduled individual meetings. My team also wanted me to spend more time sharing my vision. Personally, I have always been inspired by Eric [Schmidt], Larry, and Sergey; I thought my team was also getting a sense of the company’s vision from them. But this survey gave my team the opportunity to explain that they wanted me to interpret the higher-level vision for them. So I started listening to the company’s earnings call with a different ear. I didn’t just come back to my team with what was said; I also shared what it meant for them.”

Chris Loux, head of global enterprise renewals, remembers feeling frustrated with his low UFS scores. “I had received a performance review indicating that I was exceeding expectations,” he says, “yet one of my direct reports said on the UFS that he would not recommend me as a manager. That struck me, because people don’t quit companies—they quit managers.” At the same time, Loux struggled with the question of just how much to push the lower performers on his team. “It’s hard to give negative feedback to a type-A person who has never received bad feedback in his or her life,” he explains. “If someone gets 95% favorable on the UFS, I wonder if that manager is avoiding problems by not having tough conversations with reports on how they can get better.”

Loux isn’t the only Google executive to speculate about the connection between employees’ performance reviews and their managers’ feedback scores. That question came up multiple times during Oxygen’s rollout. To address it, the people analytics group fell back on a time-tested technique—going back to the data and conducting a formal analysis to determine whether a manager who gave someone a negative performance review would then receive a low feedback rating from that employee. After looking at two quarters’ worth of survey data from 2011, the group found that changes in employee performance ratings (both upward and downward) accounted for less than 1% of variability in corresponding manager ratings across all functions at Google.

“Managing to the test” doesn’t appear to be a big risk, either. Because the eight behaviors are rooted in action, it’s difficult for managers to fake them in pursuit of higher ratings. In the surveys, employees don’t assess their managers’ motivations, values, or beliefs; rather, they evaluate the extent to which their managers demonstrate each behavior. Either the manager has acted in the ways recommended—consistently and credibly—or she has not. There is very little room for grandstanding or dissembling.

“We are not trying to change the nature of people who work at Google,” says Bock. “That would be presumptuous and dangerous. Instead, we are saying, ‘Here are a few things that will lead you to be perceived as a better manager.’ Our managers may not completely believe in the suggestions, but after they act on them and get better UFS and TMS scores, they may eventually internalize the behavior.”

Project Oxygen does have its limits. A commitment to managerial excellence can be hard to maintain over the long haul. One threat to sustainability is “evaluation overload.” The UFS and the TMS depend on employees’ goodwill. Googlers voluntarily respond on a semiannual basis, but they’re asked to complete many other surveys as well. What if they decide that they’re tired of filling out surveys? Will response rates bottom out? Sustainability also depends on the continued effectiveness of managers who excel at the eight behaviors, as well as those behaviors’ relevance to senior executive positions. A disproportionate number of recently promoted vice presidents had won the Great Manager Award, a reflection of how well they’d followed Oxygen’s guidelines. But what if other behaviors—those associated with leadership skills—matter more in senior positions?

Further, while survey scores gauge employees’ satisfaction and perceptions of the work environment, it’s unclear exactly what impact those intangibles have on such bottom-line measures as sales, productivity, and profitability. (Even for Google’s high-powered statisticians, those causal relationships are difficult to establish.) And if the eight behaviors do actually benefit organizational performance, they still might not give Google a lasting edge. Companies with similar competitive profiles—high-tech firms, for example, that are equally data-driven—can mimic Google’s approach, since the eight behaviors aren’t proprietary.

Still, Project Oxygen has accomplished what it set out to do: It not only convinced its skeptical audience of Googlers that managers mattered but also identified, described, and institutionalized their most essential behaviors. Oxygen applied the concept of data-driven continuous improvement directly—and successfully—to the soft skills of management. Widespread adoption has had a significant impact on how employees perceive life at Google—particularly on how they rate the degree of collaboration, the transparency of performance evaluations, and their groups’ commitment to innovation and risk taking.

At a company like Google, where the staff consists almost entirely of “A” players, managers have a complex, demanding role to play. They must go beyond overseeing the day-to-day work and support their employees’ personal needs, development, and career planning. That means providing smart, steady feedback to guide people to greater levels of achievement—but intervening judiciously and with a light touch, since high-performing knowledge workers place a premium on autonomy. It’s a delicate balancing act to keep employees happy and motivated through enthusiastic cheerleading while helping them grow through stretch assignments and carefully modulated feedback. When the process works well, it can yield extraordinary results.That’s why Prasad Setty wants to keep building on Oxygen’s findings about effective management practice. “We will have to start thinking about what else drives people to go from good to great,” he says. His team has begun analyzing managers’ assessment scores by personality type, looking for patterns. “With Project Oxygen, we didn’t have these endogenous variables available to us,” he adds. “Now we can start to tease them out, using more of an ethnographic approach. It’s really about observations—staying with people and studying their interactions. We’re not going to have the capacity to follow tons of people, but what we’ll lose in terms of numbers, we’ll gain in a deeper understanding of what managers and their teams experience.”

That, in a nutshell, is the principle at the heart of Google’s approach: deploying disciplined data collection and rigorous analysis—the tools of science—to uncover deeper insights into the art and craft of management.

David A. Garvin is the C. Roland Christensen Professor of Business Administration at Harvard Business School. This article draws on material in the HBS case study “Google’s Project Oxygen: Do Managers Matter?” (case number 9-313-110, published April 2013).

Brave Men Take Paternity Leave – by Gretchen Gavett

“Fathers with even a short work absence because of family obligations are recommended for fewer rewards and receive lower performance ratings,” write Amy J. C. Cuddy and Joan Williams in their2012 HBR article, citing two separate studies. While other research has shown that fathers are held to lower performance standards and are more likely to be hired and promoted than childless men with the same qualifications, these studies showed that effect was reversed when fathers played an active role in their children’s lives. As a result,  “Men are being driven out of caregiving roles,” write Cuddy and Williams.

Many people would like to change that. But there is a long way to go: According to a recent Boston College Center for Work and Family survey, “the majority of fathers take only about one day of leave time to bond with their new children for every month the typical mother takes.” In total, 76% of fathers go back to work after one week or less after the birth of a child, and 96% after two weeks or less.

But research from economists Gordon B. Dahl, Katrine V. Løken, and Magne Mogstad, published this month in The American Economic Review, shows that, when paid paternity leave is made available by law, fathers do use it. Importantly, this isn’t just because the law exists; rather, it’s because when some brave souls take leave, that seems to reduce the stigma and encourage peers to take time off, too.

Using data from Norway, which implemented a law allowing four weeks of paid leave for dads in April 1993, the researchers first isolated how many eligible men took leave across the board. The rise, from 3% prior to 1993 to 70% in 2006, is considerable.

Paternity Leave Taken in Norway

But when they specifically isolated the influence of peers — and in particular, a male coworker or a brother — a more complex story began to emerge. The figure below is similar to the one above, showing that “from 1993 to 1999, program participation went from a little over 50% to over 70% of eligible coworkers.” However, as Gordon Dahl points out, the influence of peers — both direct combined with the snowball effect — accounts for 21% of the total increase in participation in the parental leave program from 1993 to 1999. And as time goes on, the snowball effect becomes more pronounced.

Peers Influence Paternity Leave chart

The top line represents the actual use of leave by coworkers after the first father paved the way; the bottom subtracts the estimated peer effect (derived from a regression discontinuity design based on the cut-off date of April 2013) from the total take-up to show “how much lower leave take-up would have been in each year had the original peer father not influenced any of his coworkers, either directly or indirectly.”

In the end, Dahl says, “coworkers and brothers who were linked to a father who had his child immediately after the reform — versus immediately before the reform — were 3.5% and 4.7% more likely, respectively, to take parental leave.” But when a coworker actually takes parental leave, “the next coworker to have a child at his workplace is 11% more likely to take paternity leave.” Slightly more pronounced, the next brother to have a child is 15% more likely to take time off.

And while any male coworker taking leave can reduce stigma, the effect of a manager doing so is more profound. Specifically, “the estimated peer effect is over two and a half times larger if the peer father is predicted to be a manager in the firm as opposed to a regular coworker.”

Also worth noting: the economists didn’t find statistically significant differences in pay and future employment prospects between fathers who did and did not take leave — though they did see less than a 2% reduction in total earnings.

The researchers note a few important caveats, however: For one, because of their methodology, they only measured peer effect in smaller companies because those employees are more likely to interact directly. Two, there’s not much of a peer effect in companies where the average tenure is 10 years or more; in firms where there’s a lot of turnover, the effect was much greater. These results “suggest the benefit of workplace-specific information is more valuable where there is more job uncertainty.” Peers can provide information and help reduce that uncertainty among dads who are on the fence about taking leave.

Third, there’s no evidence that weaker peer ties have any effect on paternity leave. For example, the researchers were unable to find peer influence between brothers-in-law or in a geographical neighborhood.

Lastly, they found no indication that Norway’s 1993 reform improved gender equality across workplaces in general.

Regardless, these findings represent an important bridge between public policy and organizational (and familial) behavior. As the economists note, “advocates of… public interventions often argue that traditional gender roles in both the family and labor markets can be changed or modified via peer influence.” This study seems to confirm this argument.

As calls for family-friendly work policies increase, particularly for men — and as companies like Yahoo, Bank of America, and PwC instate paid paternity policies — it’s worth keeping in mind that a law or on-the-books rule is just the first step in encouraging dads to take time away from work. Just as important are those fathers who are willing to actually use their paid time off; their actions can set a lasting and meaningful precedent for other men, even many years down the road.

80-gretchen-gavett

Gretchen Gavett is an associate editor at the Harvard Business Review. Follow her on Twitter @gretchenmarg.