Tuesday, December 6, 2011

What's the Matter With Business?

Another of the benefits of being off the grid for a couple of months: old news is new! And you can consume it at your own rate!
Which is to say, if you're like me, the onslaught of media, when you're trying to swim in the stream, can be overwhelming. I remember feedback from people who canceled their subscriptions to HBR when I was editorial director. They invariably said, "The issues pile up, I can't keep up, and it's easier to cancel my subscription than to feel guilty for not reading each issue."
I'm the opposite.
I look forward to random reading in piled up back issues of old magazines after I get back from a prolonged absence.
Take the September 24-30 issue of The Economist. Page 76, opened at random, offers some startling statistics about how companies work inside. According to a study commissioned by Dov Seidman, author of "How," 43% of American employees surveyed say their company works on a command-and-control culture--management by coercion. Another 54% say their employers are top-down, but with a dollop of carrots and sticks, and talented leaders who try to inspire followership--a category Seidman calls "informed acquiescence." Only 3% actually practice employee self-governance, where a shared set of values and principles guide employees in their work and align them with the company's larger purpose.
But, as Paul Harvey used to say, that's only part of the story!
The Economist goes on to report that, unlike the employees in the belly of the beast, the bosses at the tops of companies who were interviewed saw a very different picture. Bosses, according to the study, are 8 times more likely than the average to say that their company is self-governing. 27% of the bosses say their employees are inspired by the company--only 4% of the employees see it that way. 41% of the bosses say their company rewards performance based on values, rather than purely on financial results--14% of the employees agree.
What does the gap cost companies?
The Economist notes that in companies run through coercion, fewer than 20% of the employees say their company readily adopts good ideas.
In an economy of ideas, that means leadership by coercion renders your organization deaf, dumb, and stupid.
But it's worse than that.
Decades after all the initial work on the importance of corporate culture, after Peter Drucker's early reflections on the coming of the knowledge economy, after Theory X and Theory Y gave way to Theory Z, the vast majority of American companies (presumably the large ones) are still run according to the old model.
Rules and restrictions.
Reports and regulations.
Keep everyone in line. Tell them what to do. Give them enough room so they can do their jobs, but make sure nobody gets too adventurous or creative, too innovative or idealistic.
When Bill Taylor and I started Fast Company more than 15 years ago, we put our manifesto on the front cover of the first issue: WORK IS PERSONAL; KNOWLEDGE IS POWER; COMPUTING IS SOCIAL; BREAK THE RULES.
Maybe it's time to restate those principles. Make them part of the OCCUPY BUSINESS movement.
We need to see that 3% of self-governed businesses grow to become the majority.
The 99%.
It's something to shoot for.

All Rights Reserved 2009 (c) Alan Webber, Rules Of Thumb