What If People Mattered As Much As Profits?

Or What I Learned from Reading “An Everyone Culture: Becoming a Deliberately Developmental Organization

Do you think people are important for profitability in a business? I think most people would say “yes, to an extent.”

That is some people, like the C-suite, make a difference in profits, but others, like the first-line managers, are less important and more interchangeable. As long as someone is doing the job, it doesn’t matter much who.

That opinion seems pretty cynical, and you won’t find a CEO who would put it in a press release. But it does reflect the way most companies treat employee development, especially if they prioritize short-term profitability.

There are some companies, though, that have taken a radically different stance on the issue. These are Deliberately Developmental Organizations (DDOs). And they are the subject of the book An Everyone Culture: Becoming a Deliberately Developmental Organization.

The book was written by a team of researchers, led by Robert Kegan, Meehan Professor of Adult Learning and Professional Development at Harvard University Graduate School of Education and Lisa Laskow Lahey, a developmental psychologist at Harvard University Graduate School of Education and leader of the Personal Mastery component of the Ph.D. program. They discuss what DDOs are, their revolutionary people management approach, and how it’s impacted their businesses. To illustrate how DDOs operate, the authors investigate three companies that have fully implemented the concept and describe the performance practices they use.

Many of the principles DDOs have embraced run counter to conventional wisdom, and I had a hard time wrapping my head around them. But I found three major ideas particularly compelling:

  1. When problems arrive, they don’t just try to solve them. They try to fix underlying weaknesses that may have caused the problem. They “let the problem solve the person.”
  2. Management assigns work based on employees’ desire or need to learn rather than current competence.
  3. They define success both by personal growth of employees and traditional fiscal measures, but they’ve put up great numbers regardless.

Let the Problem Solve the Person

In DDOs, people believe the way to business success is through constant development of employees. As a result, they create a culture where employees safely learn and fail, overcome weaknesses, and tackle challenging work they don’t yet know how to handle. DDOs keep their employees in that uncomfortable place where you have to stretch and face your demons – and where you have no choice but to get stronger. So they spend a great deal of time coaching and giving each other feedback. But when a problem pops up, they’re less interested in fixing it than in adjusting the thinking, assumptions, processes, or judgment that caused it in the first place.

From the book:

“In the practices, we’ve surveyed, feedback is oriented not toward correcting an instance of behavior but toward shifting the mind-sets that produce the behaviors. Practices in a DDO do not reward or punish results independently of the processes that produced them; instead, they target improving the thinking that generates the results.”

So in a DDO, if you bring a problem to a coaching session, the discussion is likely to uncover limiting beliefs you have about yourself or others, and you’ll be asked to work on changing those beliefs and developing a more nuanced mindset.

If you’re used to a “get it done” attitude from leaders, this approach may sound a bit soft. But if you’ve ever had a coaching session that challenged one of your closely held beliefs, you probably left exhausted. And employees at DDOs agree the constant personal work can be rough.

The book quotes former FBI director James Comey’s experience at one of the DDOs, Bridgewater Associates, which uses a process called “probing” to uncover hidden assumptions:

“I have briefed the president of the United States repeatedly, I’ve argued in front of the United States Supreme Court and I’ve been probed at Bridgewater, and Bridgewater is by far the hardest.”

Work assignments are based on growth, not competence.

DDOs don’t ask people to go to off-sites or external MBA programs to learn new skills. They expect people to learn from everything they do at work. And they don’t wait until you can handle a job before throwing you into it. Other companies sometimes do this, too, by accident. DDOs do it deliberately and then follow up with team support to help you succeed. But they consider failure a natural part of growth. No one is punished for learning from mistakes. The authors acknowledge that this constant disruption can be painful even though people gain incredible satisfaction from their achievements.

From the book:

“Elise, who has held several positions at Next Jump, told us she felt overwhelmed when she was first made the assistant to the CEO. Then she gained a lot of satisfaction when she grew into the role well enough to be promoted to a new role in public relations – only to find herself overwhelmed again. . . . ‘It took me this long the master the old job, and now I have got to wrestle with all those feelings of inadequacy and uncertainty all over again? Who wants to do that?’”

It’s completely counter-intuitive that a company would take the time to let someone master a role then turn on the music and tell everyone to switch chairs. But the DDOs want to build a workforce of agile, confident people. From their point of view, someone who’s growing every day is a more effective contributor to the company overall, even if their daily work is less efficient than someone who’s done the same job for years. And the approach seems to pay off.

These DDOs are making money.

The companies reviewed in this book have no interest in becoming charities. They are out to make money and they know if they don’t make money, the people they’re committed to developing won’t have jobs to grow in. So the authors had to ask, “How are they doing as a business?” Although only three companies were used as exemplar DDOs in the book, they have all had incredible business success. For example, Next Jump, a software company, experienced 40% employee turnover before adopting a DDO culture. That’s pretty normal for tech businesses. After implementing DDO, their turnover is in the single digits.

Bridgewater Associates, an investment firm, earned 9.4% for investors in 2008, one of the worst financial years on record. And Decurion, a movie theatre operator successfully expanded into real estate investments and senior living communities.

The authors acknowledge that while DDOs seem to do well, there are plenty of successful non-DDO companies.

“We aren’t saying, ‘To be successful, you have to be a DDO.’ We are saying ‘If you care deeply about people development (for the good of the company, or the good of the planet, or both), this might be the most powerful way to organize your culture – and it’s possible to do so, and still run a very successful business.’”

Is this the next business revolution?

After reading this book, I think of the global priorities of Millennials, now stepping into their first management jobs and exercising their entrepreneurial muscles. I wonder if this kind of radical shift in the concept of “employee” will be the next business revolution.

For anyone who wants to try it, the book offers a wide selection of techniques you can use for yourself, one team in a larger organization, or a whole company. My advice for anyone who reads the book is to take time with it. Keep an open mind. And be on the lookout for ideas that make you squirm – that’s where the revolution takes place.

Carol Bleyle
Carol Bleylehttps://www.pract.us/news
CAROL handles client services and marketing for Pract.us Software, a training platform designed to promote experiential, on-the-job learning and development. She works to realize the vision of turning the 70% of informal learning we do at work into a powerful training and development tool. With an M.A. in Cognitive Linguistics from the University of California at Berkeley, Carol views skills development through the lens of cognitive science and psychology And over the past 23 years, whether in traditional classrooms or on-the-go mentoring in her own company, Carol has constantly searched for realistic ways to make learning more natural and engaging. As a writer, trainer, consultant, entrepreneur and public speaker, Carol helps business owners find practical solutions to employee performance. She and her husband reside in beautiful Loudoun County Virginia with three energetic dogs and two lazy horses.
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Larry Tyler

Amazing Article. It is something I strongly believe in and practice yet never put to words. A lot of what you say was used by the man that mentored me when I first started retail. This is great thank you.

Chris Pehura

Totally on board with this. A good practice is to hire on potential and developing employees to take advantage of that potential. Often when companies get too big, they start thinking process drives people and that just creates a slew of problems. 95% of failed initiatives I had to turn around were a result of process over people. Now with companies being global, people first strategies are becoming crucial.

I consider DDO as a people first strategy.

Aldo Delli Paoli
Aldo Delli Paoli

Very informative and insightful. Thank you.

Carol Anderson

Excellent article, Carol. You put “looking for the root cause” very eloquently and selected a passage from the book that tells the reader “how.”

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