Corporate Revolution: How Not to Alienate the People

“A system can not understand itself. The transformation requires a view from outside.”

So wrote W. Edwards Deming, the father of quality, whose work in
the 1950s helped “Made in Japan” change its meaning from “cheap” to
“excellent.” It sounds like a justification for hiring consultants
(Deming was one, after all), but Deming was actually writing about how to transform a company from within by liberating your mind so you can see with the clarity an outsider–and act with the knowledge of an insider.

Without that profound outsider-insider view, corporate revolutions
just don’t happen. That’s because “corporate revolutions” are mostly led
by and imposed on middle-aged people with some sense of responsibility
for the consequences of their actions. Terror, which can do dandy things
in real revolutions, backfires fast. Its milder analogue–anxiety–also
does more harm than good. Anxiety is the enemy of both productivity and creativity. The best-known of Deming’s famous 14 Points is #8: “Drive out fear, so that everyone may work effectively for the company.”

Last time out, I suggested that wannabe business revolutionaries need to be tough-minded. Tough-minded, though, is not the same as thick-headed.

Here’s a real life example of dunderheaded revolutionary rhetoric.
I’m paraphrasing an actual change proposal that I saw, one that called
for radical reorganization, a huge (more than 30%) cost reduction, and
politically sensitive rearrangement of lines and boxes. (It’s been
edited to protect the guilty.) Making the case to leadership, the change
team said revolution was justified

because of lack of consolidated strategy and priorities;
inadequate capabilities compared to competitors; inefficient spending;
internal best practices not shared; long tenure and high cost for most
staff, who do not add value commensurate with their costs.

You think I’m strategically sloppy, incapable, inefficient,
complacent, and overpaid–and you want me to participate in the change
effort, give you my best ideas, and sign up for the revolution? I think
I’d better get ready to sign up for unemployment instead.

By contrast, here’s the prologue to another document, different case, but calling for roughly the same scale and kind of change:

The drastic cost reduction target opens up a window of
opportunity: To design a wholly new, more effective and efficient
operating model. Reducing expenditures only by reducing volume of
activities would kill the organization. Instead, we can aggregate
inefficient activities and create focus. Once the results are clear, we
can rescale.

Now, some of this may be Newspeak: Those windows of opportunity will
surely be used for defenestration. But, hey, designing a wholly new
operating model, creating focus, and planning how to rebuild–I could
pitch in for that.

The difference isn’t just tone and style: It’s substantive. Harvard Business School’s Amy Edmondson has written extensively about the importance of “psychological safety” at work.
As she puts it “Psychological safety describes individuals’ perceptions
about the consequences of interpersonal risks in their work
environment. It consists of taken-for-granted beliefs about how others
will respond when one puts oneself on the line, such as by asking a
question, seeking feedback, reporting a mistake, or proposing a new
idea.”  As Amy once told me, there are certain kinds of work
environments where fear is a pretty effective management technique-a
Roman galley manned by slaves, for example. But without psychological
safety, people can’t change, and most modern organizations can’t succeed
without change.

The only rational response to the first proposal I quoted is to
circle the wagons, protect the women and children, and tell the change
team that they don’t know what they’re talking about: You become
Deming’s insider, incapable of transforming. A group on the defensive
has all kinds of tools at its disposal, from outright rebellion to-more
commonly-becoming a passive aggressive organization,
in which everyone agrees, but nothing changes. Management has
relatively few options–basically, fire the bastards. The second
proposal-equally tough minded-actually invites participation and
creativity. The first implies you’ll be punished for endurance; the
second suggests you’ll be rewarded for resilience.

This isn’t exactly new information about work or about people. Deming’s Out of the Crisis
was published in the early 1980s, and more than 200 years before that,
Ben Franklin observed that “a spoonful of honey will catch more flies
than a gallon of vinegar.”

So what is it that makes otherwise sensible business revolutionaries
act like thugs? Quarterly earnings? Fear of their own boss? Misplaced
machismo? Mistrust of their colleagues? Or, perhaps, their own lack of
psychological safely?

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