Where we read business books so you don’t have to! Having read Brave New Work by Aaron Dignan the founder of The Ready, an organisational design and transformation consultancy, Tom Wrenn shares an overview of the book and what he learned about how companies can reinvent their organisations, culture and productivity:
The premise:
Modern organisations are still operating under the same basic org charts, budget-led decision-making and processes as businesses from a century ago. Yet we’re in an era of constant change and are being asked to invent the future.
When things go wrong, processes are put in place, and process layers on process until companies are overwhelmed by bureaucracy. Lack of empowerment of individuals means that people find themselves not having enough time to do their work but with days packed with meetings.
In the 1940s the CIA gave a special field manual for how to destabilise communities and commerce from within. Things like talking frequently at great length, holding endless conferences, bringing up irrelevant issues, haggling over precise wording, and referring to matters already agreed upon. If any of these feel familiar it might mean that the processes we’ve created for modern workplaces are feeling indistinguishable from sabotage!
And this is a big problem because it’s impacting productivity. Despite all the technological innovations of the last ten years, labour productivity has been crawling along for the last decade at the lowest rate since the end of WW2.
The change:
Our way of working reflects our view of human nature. Legacy organisations view people as not really wanting to work or learn without being coerced by organisational structure. They think of others as having an inherent dislike of work, which is strange as individuals think of themselves as enjoying mental effort. In fact, we’re bored if we’re not challenged and see ourselves as creative and full of good ideas.
Evolutionary organisations recognise this and see that people have an innate desire to fulfil potential and, when given the space to, have a high degree of ingenuity in solving problems. It means giving people more opportunities to self-regulate.
A good example of this that Dignan uses in Brave New Work is, let’s say travel spending has spiralled. You could put in place a freeze and set up systems and processes to manage spend for teams. OR you could share total travel spend by team, so everyone has transparency, and ask everyone’s help to optimise spend and share top tips. Both may lead to the same end result, but one removes process and gives autonomy back to individuals rather than executing top-down actions.
What steps does Dignan recommend?
1. Empower change
- If something is stopping a team from achieving their purpose, they should have the ability to change it. There can be decision-making principles but avoid extensive sign-off structures that reflect a fear that people can’t be trusted.
- Avoid silos. In start-ups, teams work in a fluid way, and leaders often hark back to when they were smaller and got more done. As you grow, dedicated functions and siloes emerge, and you lose that dynamic and trusting way of working you had at the start. Try to instead focus people on electing to work on projects that excite them rather than top-down division by teams.
- An example of distributing power is the Buurtzorg model of healthcare in the Netherlands – a group of 14,000 nurses and very few managers. The model lets teams and individuals self-manage. For example, on recruitment, why make an HR director lead that? Who better to do it than the team that person will be joining?
2. Distribute advice
- To make the best decisions, advice should be sought and listened to from across the organisation. Sometimes this process is informal, sometimes teams elect members to be advisors. This helps transform employees from executors of top-down directions to self-motivated contributors.
- A good example of doing this is to set up a red team task with one mission: design a competitor who would bury your organisation. The enthusiasm people take to this task is probably directly proportional to your organisational debt. Your people know the problems and understand how it impacts your ability to grow.
3. Prioritise transparency
- Legacy organisations may resist transparency, whether that’s because people have status from their knowledge or a view that people can’t be trusted. But changing how your people access information can transform the pace of an organisation.
- Legacy organisations push knowledge, so we must wade through it. Evolutionary organisations tag information for people to find it when they want to. It’s a pull-based system. Emails are push information and are limiting as they can’t be found by everyone. One trick in the book is to try banning non-essential internal emails for two weeks. Information that is needed will be stored in shared accessible places (and people may feel much freer!)
4. Rethink planning
- Ford estimated it cost them about $1.2bn a year to complete a budget, and they aren’t always effective as budgets are absolute while the world is relative. If your company hits a target of 10% growth when the market grew 20%, was that a job well done?
- Svenska Handelsbanken abandoned budgeting over 50 years ago. Incentives and bonus programs are replaced by a program that funnels a share of the firm’s profits to employees when the bank outperforms its competitors.
5. Add pace back into meetings
- Great meetings are fantastic, they offer more information per second than any form, and reading body language and emotion is critical. The problem is not all meetings aren’t great. The average employee attends 62 meetings a month and considers half of those meetings a waste of time.
- One suggestion in the book is to end status updates to leadership teams, as often they’re being asked for input without full context. Instead, leaders should join the team and be part of the workflow or advise at request from the team.
- Another suggestion is to allocate a facilitator who is empowered to stop people from going on conversational tangents and open up opportunities for more people to contribute. Scribes should create follow-up actions, and actions should have pace, rather than ‘when should we meet next’ ask “What can we achieve by next Friday?”
- One great way of assessing what’s necessary is to cancel all meetings for two weeks. After that time, ask the team to work out what was missed and what wasn’t picked up elsewhere, and slowly start adding that back in.
6. Focus on the right incentives
- The book posits that non-competes or postponed financial incentives are a strange way to manage a team. Holding someone hostage doesn’t create peak performance, it creates resentment. A radical example of not doing this is Zappos. They offer people $1,000 to leave after their first week – they only want people to work there who want to work there.
- Studies have shown that while not earning enough can be a motivator to leave, being paid more doesn’t actually make people perform better. Studies have shown top motivators are recognition for achievement, interesting and meaningful work, involvement in decision making and growth potential. How much time do companies spend thinking about that as opposed to salary?
- Some companies have made salaries totally transparent to combat this. While it can be scary, if the system is right it allows for conversations around why certain skills are valued more highly, or it highlights that the system might need to be adjusted. This change reduces bias, increases trust and according to some studies improves productivity.
The how:
Putting in place trust, transparency and empowerment is usually a big change for any organisation. How can leaders get the ball rolling, when this is about teams taking ownership, and not fixing from above?
Brave New Work proposes that one way of being led by the team is to ask them. When Pixar wanted to improve its culture, it had a day where all employees together shared topics they cared about. That created 100+ topics with people gravitating towards the ideas they were most interested in and sharing proposals from each session. It was a huge hit. Compare that to a strategy day set by a CEO with no opportunity for people to choose to discuss the things they feel passionate about.
If you’d like to change your business for the better, one of the first things you can ask is: “What’s stopping you from doing the best work of your life?” The important thing is to start somewhere. According to Dignan the perfect team size to start on this is 150, so that may be the whole org, a location or function. Get them to start experimenting and other teams will soon want to be involved.
Dignan states that the role of the leader in this strategy is to hold space for experimentation and to show up when people want your involvement. Committing to operating in a dynamic and adaptive way. Once you set the process in motion you will have a more engaged and productive workplace, and you too will be free to think about innovation and experimentation, rather than meetings and inboxes.
