[su_dropcap style=”flat”]M[/su_dropcap]Y FIRST THOUGHT as I finished this book? Where was this management philosophy and leadership style when I was working 9 to 5? The good news is, the word is on the street that what was proven to work in the past, no longer works today. In fact, many management techniques of the past didn’t work back then either, and this generation is moving on. To be transparent here, I admit that a few of the ideas presented by author, David Burkus, are strikingly alien to me – but I’m getting ahead of the story. In the next few hundred words or so, here are my takeaways from the chapters in Under New Management. This book was so well organized and segmented by subject, it was a pleasure to read, uncomplicated to absorb, and therefore easy to convey my thoughts on each chapter.
From the first page, where I read “Management Needs New Management” I was all in. He starts with an interesting history lesson of a well know ‘mature’ corporation and ends the section with this quote, “We need to ask ourselves whether we can find better ways of working for the future.” Then David Burkus proceeds to offer solutions to faulty management practices embedded into our workplaces today. Ready to take a walk with me? If you are let’s take that walk on the wild side, and see if this doesn’t get you excited about the future of corporations under new management.
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Outlaw email. It might shock you to know that most email is for business and we send them to the tune of 100 billion every day. Without email, how would people communicate? Burkus points to an organization who built their own social network that, instead of pushing information out as email, information was available for employees to choose to subscribe to. That’s an over simplification, I’m sure but imagine being able to find projects and subjects that pertain to you and not get the 85 emails that fall to the delete key. Companies that have adopted no email, or reduced email policies, have seen an overall increase in keeping employees engaged and satisfied with their jobs, plus reduced stress and time demands.
Put customers second. Yikes! Really? In fact, this made perfect sense to the companies identified by Berkus in this book. The strategy – employees first, customers second. If this sounds boring to you, it shouldn’t. Customer satisfaction is only possible through interactions with productive employees. As Berkus puts it, “profits are driven by customer loyalty, customer loyalty is driven by employee satisfaction, employee satisfaction is driven by putting in place first.” By putting employees first, customers come to feel that they are being put first because of the quality of the service they receive. I like the way Danny Meyer, founder of Union Square hospitality group, refers to the employee first principle. He calls is, “the virtuous cycle of enlightened hospitality” which he likens to the service – profit chain.
Lose the standard vacation policy. Here’s something that will make the little hairs on the back of your neck stand up. Netflix founder Reed Hastings and his senior leaders wrote a new vacation policy. The Netflix vacation policy is that there is no vacation policy. Netflix provides some guidance in this area, but it’s documented truth that this is just one of the policies that Netflix has nixed in their organization. The notes in the back of the book provide URLs for further research into how Netflix has reaped the benefits from pulling out the policies and rewriting them to accommodate the New Management model. Is there a key ingredient in a philosophy that relaxes foundational policies? Yes. It’s called trust.
Pay people to quit. You read it right. Think about this for a moment. If you hired into an organization and three weeks later you were offered $4000, would you quit or would you stay? I know right? It depends on if you were in love with the organization or felt like you tried it but could love someplace else a lot more. So now you know the story of Zappos. The CEO of Zappos, Tony Hsieh, has no problem using this high sum of money to get to the truth of this question. “Do you care more about money or do you care more about this culture and the company?” Call center jobs are pretty glamorless, and can be highly stressful too. As a result turnover rates stand at an average of 150 percent. The ‘offer’ has given Zappos the edge for maintaining satisfied employees and contributed to a culture where they want to stay and grow in their careers.
Make salaries transparent. So here we are. Do you wonder how making salaries transparent can work with the tide instead of against it? This was one area where my skepticism showed up in full armor. As recounted in this chapter, I witnessed some of the crying, screaming emotional outbursts when the annual salaries were raised or leveled. Here’s the main difference from what I saw and what David Burkus uses to back up this theory. The practice of revealing salaries goes counter to what we’ve learned since childhood, “Don’t discuss how much you paid for your car and don’t tell anyone how much you make.” SumAll, the corporation used for the case study in this chapter has found that the opposite is true. “Once employees accept their salary and start working on the inside, they see that sharing salaries is a way to make sure everything stays fair.” This means that employees are allowed to negotiate and speak honestly with their managers. Burkus documents pages of support for how this salary transparency is an advantage.
Ban non-competes. This is a topic I have never understood. The world is full of competitors. How boring life would be if everything followed along with what Henry Ford said, “You can have any color you want as long as it’s black.” Besides the fact that non-competes are designed to keep former employees from working for a competitor, they are also geared to protect intellectual property. When you read the book you’ll find some interesting revelations about what has been considered worthy of a non-compete agreement. OK – I’ll let you in on a little bit of insight here. A new church ministry could not be formed within a 10 mile radius of the ‘head’ church. That would be a bit much, but it’s in there. The primary content of this chapter though delves into how performance is negatively impacted when non-compete agreements are held like ransom – like when inventors fled Michigan where non-competes are heavily supported through the Michigan Antitrust Reform Act (MARA), for states where non-competes are relaxed or non-existent. Talent goes where they aren’t restricted by laws that inhibit.
Ditch performance appraisals. To be fair, this doesn’t mean never appraise performance, but it sets up an entirely new structure, method, and system of delivery. This was my favorite chapter because I have felt annual, and mid-year performance reviews to be a holy waste of time, or maybe I mean a waste of holy time. As precious as time is, the burden of performance reviews should be value-added, not value-depreciated. David Burkus shares the story of how Adobe discovered the way to put value back into the feedback mechanism. Employees have the advantage of a check-in approach which has no paperwork and is less informal, while still maintaining discussions around expectations, feedback, and their personal/professional growth and development. Check-ins are at least quarterly and can be more often if projects are completed in the interim. Morale has improved significantly among employees and managers. What shines as the hallmark of this new process is that “Check-ins are 180 degree turns, where everyone is given the material they need to improve their performance and, if needed, change course. Feedback is viewed as a gift.” When was the last time someone told you, “This feedback was a gift. Thank you”?
Hire as a team. When you read this chapter, you are going to be amazed. Seriously! I have worked in approximately 27 places in my lifetime. OK. Some of them were 4 hours because I got in there an – well, there was no way I was going to take up space in that jungle. This is why I so admire Whole Foods, the company Burkus chose to illustrate the premier hiring practice that involves the whole team. This isn’t just the group interview. This is the new hire, novice, rookie working for the probation period, then having the established team members vote their confidence in making the employment permanent. Is this person a good fit or not? “This method is especially brilliant in light of recent research suggesting the importance of teams in producing great performers.” The team hiring process also indigenous to corporations such as Automatic, producers of WordPress, and Google who have highly distributed workforces around the globe. Hiring is a tricky venture overall, but these organizations know “it takes a village” to see to it that teams gel and work together like a hand in glove.
Write the org chart in pencil. In one of my past positions, one of my oft open projects was updating the org chart. I thought I knew what this chapter was going to convey – but boy was I wrong. This penciled in org chart takes the concept of structure and pools it into project teams. Or maybe a better explanation is the leaders at Eden McCallum pool their talent and when they are awarded a contract, they dip into that pool and form an strong team for specific projects. This is like the job jar on steroids. As Burkus writes, Eden McCallum is a consulting firm who hires independent contractors for projects. “They know the world of an independent contractor can be a lonely one, so they take steps to ensure that its talent pool feels more like a team. Their org chart actually looks a lot like a railroad map instead of the traditional lines and boxes.” In this chapter, Burkus, discusses the concept of disruptive innovation and possibilities of reforming the org charts of today and reap the benefits of role based leadership.
Close open offices. I appreciated what I learned in this chapter because having worked in open offices and closed offices, I could easily speak to which landscape worked best from my perspective. I found it right here. “A wealth of studies suggests that the open offices rapidly fail to outweigh the costs.” The sub-title of this chapter is Open Offices Shut Employees Down, and I can testify to that as my experience. One organization collected and analyzed data from surveys and research leading to reports from employees that were negative in every measurement. “Employees reported decreased satisfaction with their environment, worsening relationships of team members, and lower perceived job performance. They also reported increasing physical stress.” Given these findings, how can any company maintain an open office environment when all facts favor closed offices? In the final analysis though, there are redeeming qualities of open offices if that is the only option.
Take sabbaticals. As counterintuitive as it seems, using your off switch and taking time off is the best way to renew creativity and boost energy. Burkus starts this chapter stating the obvious. “Despite the temptation to be “always on,” the best leaders give themselves and their employees a good long break once in a while – a sabbatical.” It’s been normal for universities to offer sabbaticals to professors after a certain number of years of continuous teaching, but it surprised me to learn that 15 percent of United States corporations offer sabbaticals (some paid, some unpaid). McDonalds has offered sabbaticals to everyone employed directly with the company (not franchises) through their benefits program since 1977. It isn’t just the employee who benefits though. From a talent management perspective, those who step in to fill the role of an employee for several weeks learn more about operations and they might even be promoted to new roles because of it. Sabbaticals take on different forms from mini-sabbaticals of a week or two, to a month or even a year. Sabbatical plans are as diverse as the corporations who promote them. As David Burkus points out, “Sabbatical, mini-sabbatical, pre-cation, mandatory vacation – all of these programs have one thing in common: they represent small investments that yield big returns.”
Fire the managers. Well, this is one way to create engaged employees and put them in control of their destinies. Meet Valve Software, the company founded in 1996, whose success road on the efforts of Mike Harrington and Gabe Newell with their highly acclaimed computer game, Half-Life. They have gone on to produce other games and Steam, a fascinating portal for video games. Valued at betweene$3 and $4 billion, wouldn’t you think they have rigid structure and reporting hierarchy? They don’t have any hierarchy and no job descriptions. Projects are started by individuals or a group pitching an idea to the company, then a recruiting team. If enough people want the project, it starts with the group. Even without managers, there is a performance management system in place so members of groups can be observed and ranked on four factors: skill level, productivity, group contribution, and product contribution. Other organizations with similar flat structures were cited in this chapter as well. It’s an interesting concept and one that I hope continues to catch on. When there is no manager, everyone is a manager and that passes around a lot of shared accountability.
Celebrate departures. In my career I said good bye to many co-workers, some because they wanted to move on and others because the company said they had to move on. I appreciated this last chapter in the book and was especially drawn to this reasoning by a partner with the consulting firm, McKinsey & Company. This organization recruits individuals with the prospect that they will one day become an alumni, because it’s expected that they will leave the company. Sean Brown, the global director of alumni relations McKinsey and Company said of his initial talk with recruits, “We will talk about not just the great training you’ll get and the great problems you’ll work on and the wonderful clients you’ll work with, but also the fact that the firm celebrates those lifeline connections and we keep our alumni connected.”[/message][su_spacer]
Just as employees say good bye to jobs they’ve come to enjoy, but know it’s time to move on, I am moving on from this book that I thoroughly enjoyed and urge you to pick up a copy for yourself. It’s full of real life case studies told in lively, interesting dialog that will hold your attention while being memorable. Our corporations are ready to try on some new management styles. Under New Management: How Leading Organizations are Upending Business as Usual is like opening the closet door.