Recently I had a chance to talk with Tom Cox, of Cox Business Consulting, who has a radio show called "Tom on Leadership." I was on with Robert Stack, President and CEO of Community Options and Mitch Pisik, President and CEO of Breckwell Products.
Tom wrote about it on his leadership blog, which you can read
here. Here's the summary of our conversation:
My third guest was Bob Fishman, CEO of Resources for Human Development, and author of "The Common Good Corporation."
Bob started as a family counselor, and saw how dysfunctional relationships in families could produce bad outcomes, and saw also how similar dysfunctions existed in corporations, sometimes to an even greater extent than in families. Conflicts in families are hard to manage with just two people. Organizations will sometimes accept extremely destructive behavior -- the same destructive behaviors that in a family will lead to psychosis and breakdown. So it was no surprise to him that he saw breakdown at the organizational level.
What organizing systems were at work that allowed this behavior?
Bob decided to create his own organization to eliminate these bad organizing systems and these dysfunctions.
For example, suppose you had a family where one parent acts as if he knows absolutely what is right. And imagine a child growing up in that family who has their own vision of what is right. There will be conflict, and such a parent will not say "this is not my preference" -- he will say instead call the child names and tell the child she is crazy. You have a dysfunctional family. The child can choose to keep silent, or oppose aloud and be punished. Sometimes the child will move toward self-abusive behavior.
You see the exact same behavior with managers who pretend that they know exactly what we need to do in order to create a successful future. As though people are in management because they know the future. No one knows the future.
When managers act as if they have all the answers, you create a psychotic environment, and to survive in that environment you have to join the psychosis.
In Bob's organization, people are not made managers because of any ability to predict the future -- they are made managers because they can engage a group successfully in a process for managing difficulties that come up and moving toward an ever-changing future.
If you are a manager and you think you have to have all the answers, and you're at GE and a worker tells you "hey that compressor won't keep that refrigerator cold," you'll likely say "let the engineers figure that out, and stop thinking." This actually happens all the time. There are plenty of warnings -- they just go unheeded.
Managers ought to be able to accept new data, accept challenging input, and enroll the team -- in solving problems as they arise and in responding to an ever-changing future.
The problem with authoritative, top-down leadership is that input from the group is discouraged. Most corporations do this, Bob believes -- it is not a Common Good Corporation. It rewards behavior that is psychotic.
Bob has 4,000 employees, and he feels he has to remain at all times humble, and open to new data. So all policies are reviewed by working groups using the guidance that the future is ever changing and nobody knows the future.
Bob has managed to create a holding company that has defied the problems that have long plagued the holding company model. They will entertain any business idea that is legal.
Bob is also a great skeptic of strategic planning that tries to limit what you will work on or consider, because you're effectively making unprovable and unknowable predictions about the future. Things like "sticking to our knitting" reflect this thinking that Bob rejects.
How can Bob praise while also remaining humble?
Bob prefers to see people rewarded and recognized not as individuals but as groups. Everybody gets the same bonus as everyone else in the group. Each group member knows the group's members, they know the budget, and they know the goals. They all have the same benefits. Managers and workers will have the same benefits when they are in the same group.
People may have higher salaries depending on their role, however performance bonuses are always shared.
There's a big risk that individualized rewards can reduce team cohesion. Bob is a great proponent of a recognition and reward system that reinforces, rather than undermines, the effective functioning of the group.
Bob suggests creating an explicit social contract or written group understanding of how the group will handle things like money -- create a group process for forging explicit expectations as to how the group will handle new ideas, will handle bonuses, will handle people who come in claiming to know the future.
Praise and recognition are basic to the community. Praise needs to be based on shared values, and you will have a stronger organization if you make those values explicit, and reach those conscious agreements using a shared and explicit process.