Managing costs

How changing the system can change people

A conversation with Stephen Hay, adviser to mid-level managers, who challenges this and other established management paradigms.

Managers deal with people who come to work, but live out there in society. Can we start with behaviour outside the workplace? There are rules and regulations in society that guide our behaviour and we know the consequences of breaching those rules. How does that affect people at work?

Sure. Cutting to the chase, a stable society hinges on a really important element of human nature. None of us likes to be seen to be breaking the rules. All managerial efforts need to take that as our starting point.

Bringing it into the workplace, the processes, work design, financial rewards and so forth are the equivalent of the law of the land. And people’s natural tendency to follow the rules doesn’t suddenly stop when they clock-on.

So, if the rules in your workplace are driving undesirable behaviour there is only one thing to do – change the rules.

If you see behaviour that is not what you want or if your people are not performing as they should, it’s not their fault – and you will need your people management skills to set things right. 

Just as none of the vast majority of us wakes up in the morning determined to go out and break the law, no-one turns up to work to deliberately do a bad job. But their relationship to rules means that they won’t step outside the bounds of acceptable behaviour, as set by your workplace systems and processes.

You can’t change the people.

You can’t change their relationship to rules.

The only thing left to change are the rules themselves.

How can you change the rules for better employee management?

Good question. We think of team management systems as benign. They are anything but.

Consider algorithms as a component of a system. As data scientist Cathy West has said, “Algorithms are opinions embedded in code”. Let’s just think about that for a moment. Someone, somewhere wrote the algorithm. That algorithm is not free of bias.

The same goes for team management systems. Systems don't just build themselves. And the ‘system’ isn’t limited to the technical parts. It is everything that creates the environment in which work is done. And rewarded.

In many ways, we could say that organisational systems aren’t much more than documented opinions. Opinions on the way work should be organised.

If your entire organisational system is nothing more than documented opinions, can’t it be changed?

It sure can! If someone’s opinion flies in the face of reality and their influence is driving undesirable behaviour then, in the eyes of most people, their opinion is clearly wrong. Inciting violence is still a crime.

What would happen if we all realised that the opinions that form our organisational culture are wrong? But we don’t give ourselves the opportunity to explore that. 

Why do you say that? It seems really fundamental to good management.

Yes, it would appear to be. But it flies in the face of how most managers see their role. If you see your primary role as ‘managing people’, you’re missing the point. As lacking in EQ as that might sound, there is actually substantial evidence that it's true.

95% of an organisation's variation in performance can be sheeted back to your systems (processes, technology, work design, regulations, etc.). Why? Because systems drive behaviour. If you have responsibility for improving your organisation’s performance with people management strategies, that’s where you ought to be focussed.

So, if you are a manager facing this problem, what can you do about it?

We need to clear the way for a different approach. In the case of poor organisational performance, most advice would encourage you to try to improve your key management skills and become a better manager. A better people manager. A better time manager. A better ‘everything’ manager. That's certainly what everyone will tell you to do. And that's what most people try: to become a better people manager. There are enormous industries wrapped around corporate leadership training. In the US $70 billion was spent on it in 2015. To put that in context, that's about 35% of New Zealand's GDP.

But intuitively we know these things don’t really work. Given the amount of training conducted, we should be seeing a dramatic increase in organisational performance and employee engagement. But the numbers say otherwise. Just 13% of employees worldwide are engaged. One in seven. Millions of dollars are spent each year on these courses and employee engagement is heading south.

Surely there are some people who are simply unmanageable?

There is a cruel irony in that. It has a bit to do with them, not much to do with you, and a lot to do with the environment. The problem with focusing on people is that it becomes reductive very, very quickly.

You can use psychometric testing, or dig into their private lives and work history to try to work out why people aren’t performing. But there are things you'll never know, and things they'll never tell you. So, there are limits to what you can manage.

However, under the current management paradigm, what gets measured gets managed. And what you can manage defines you as a manager. So, if there are limits to what you can manage there are clearly limits to your ability as a manager. There is something deeply unfair about that, made worse by the fact that there’s a good chance you are one of these disengaged employees yourself.

The numbers aren’t good for middle managers, and on top of all that, you’re expected to fix it. However, your people – despite their engagement or otherwise – are not actually the problem. They’re just symptoms of something else.

I realise that sounds harsh but you’ll keep trying, keep failing, perhaps slowly get better at managing people, but still end up spending hours every month putting Band-Aids on wounds that need excising. In other words, a lot of effort for not a lot of gain.

So what is the most important takeaway for our readers from this?

Systems drive behaviour. And that's your job. Right there. Knowing how to manage staff means you must also manage the system so your people can do their best work. The unexpected benefit? You’ll reduce your managerial workload. That's the key. Shift your focus away from managing people. Put your efforts into managing the system. Improve productivity, engagement and customer satisfaction. And reduce your managerial workload.

As counter-intuitive as it may sound, the solution to the morphine-level pain your organisation is suffering is no more complicated than changing the rules that drive behaviour.

But be aware that managing the system means challenging the way you do things so expect resistance from a variety of sources. You'll get resistance from your manager, because it's highly likely your manager put some of these rules in place. And your manager’s manager. It is most likely their opinions that are embedded into your systems, and you may need to create a workplace change management process to update the systems effectively with these players on board. 

You'll get resistance from some of your staff, because they have settled into a routine that suits their rhythm. And, you'll get resistance from people outside your department because the changes you want to introduce may affect how they do their work. With resistance comes objections and the need for managing change in a productive way. Yet those objections are an expression of interest, a form of engagement – however perverse that might seem. Embrace it.

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