The Performance Improvement Blog

Culture Eats Strategy

(This post is co-authored with David Grebow.)

Gearing Up for the Cloud, AT&T Tells Its Workers: Adapt, or Else (New York Times)

To cut costs and boost collaboration, IBM forces some remote workers back into the office (TechRepublic)

Ford signals willingness to change to boost stock price (USA Today)

According to these news stories, three venerable companies are making major changes that they believe will help them move into the future and implement a winning business strategy. This reminds us of the warning attributed to Peter Drucker: “Culture eats strategy for breakfast.” If these companies are making these changes to compete in today’s market, or cut costs now, or boost their stock price tomorrow, they are likely to be sadly disappointed in long-term results. Strategy is important, but given the kind of transformation that must happen in preparation for the future, creating an organization that fundamentally changes the way people are managed and learn must be the focus. It’s more about developing the right culture than implementing the right strategy.

One of the questions Corporate Rebels heard frequently from the many business leaders they interviewed is, How do we structure our organization in such a way that it is future proof? How do we create a culture that will be sustainable and successful?  This is the same question that AT&T, IBM, and Ford Motor must be asking themselves.

The answer is to create an organizational culture in which learning is the primary job. This means not only encouraging people to learn but rewarding them for learning. And rewarding them for working collaboratively, communicating openly, and cooperating with a high degree of trust. People must have access to the knowledge and skills needed when and where they are needed. People must be able to fearlessly practice and apply new knowledge and skills without being punished for failing.

Creating a culture that supports learning also means that management must remove barriers in order to enable and not disable learning. Command-and-control leadership, hierarchies, bureaucracies, secrecy and compartmentalization of information all stop the free flow of information and inhibit learning. There are managers and companies around the workd that are profitably and successfully moving in the direction of eliminating these barriers.

It’s the difference between a culture characterized by “managing hands”, an Industrial Economy mindset developed when we made things and managed hands, and a “managing minds” culture, developed in the new Knowledge Economy, in which we - especially those of you reading this - produce work using our minds. Most companies, like the three giants mentioned in the headlines, are still managing hands. Not surprising since they achieved greatness by making things – telephones, cars, computers - during the Industrial Economy. Their thinking and resources go toward control and efficiency that maximizes production and profits. Much like the automotive assembly line of 100 years ago, people are treated like cogs in a wheel, not respected or promoted for their ability to use their minds to successfully communicate, collaborate, innovate or create.

To compete and survive in today’s global, technological, multi-generational, and diverse marketplace, companies need to focus on helping people develop their minds, and find ways for people to continuously increase their knowledge and skills. Managers must take the lead to make sure that people can get the knowledge and know-how they need as products, services, regulations and business situations rapidly change. And people must learn how to learn in this new environment, and take responsibility for their own learning.

People who work in companies like AT&T, IBM, and Ford, as well as most other companies large and small, are not creating the kind of culture that will prepare them for a fast evolving future. They cannot solve the problems of the 21^st century using 20^th century solutions. They need to stop managing hands and start managing minds.

 [Look for our forthcoming book from ATD titled, Minds at Work: Managing for Success in the Knowledge Economy.]

 

The Future of Education and Training in an Automated Workplace

It's a vexing question: As automation, robots, and AI do more of the work that people used to do, and do it better and safer in many cases, what will people be doing and how should we educate and train people for these new roles?

The Pew Research Center and Elon University address this question in a survey they did that resulted in responses from just over 1400 experts and highly interested individuals, selected because of their familiarity with the internet and its impact on work and education. They were asked what they think will happen to jobs and education over the next 10 years.

Claire Cain Miller, in her analysis of the survey report for the New York Times, concludes:

The logical response seems to be to educate people differently, so they’re prepared to work alongside the robots or do the jobs that machines can’t. But how to do that, and whether training can outpace automation, are open questions…People still need to learn skills, the respondents said, but they will do that continuously over their careers. In school, the most important thing they can learn is how to learn.

The authors of the report reduced the many lengthy responses to five major themes, presented in the summary below.

No doubt, the workplace now and over the next 10 years will require people to be continuous learners and to be more self-directed in what and how they learn. Methods of learning in schools, colleges, and in the workplace will continue to evolve and be more learner-centered. Proof of competency will become more important than evidence of educational completion. Companies will have to assume greater responsibility for employee learning in response to an ever-changing workplace. The danger is that people who can't adapt readily to change, who are not independent learners, or who are not a good fit with the new workplace culture, will be left out in the cold.

[Look for our forthcoming book from ATD titled, Minds at Work: Managing for Success in the Knowledge Economy]

United Airlines Needs New Approach to Learning

Fly the friendly skies…unless they need your seat. The recent United Airlines debacle which resulted in 69-year-old Dr. David Dao being dragged off a plane to make room for United staff, could have been avoided if the company saw its responsibility as “managing minds” instead of “managing hands.”

United, like many other airlines and many companies in other industries, has been stuck in the 20^th Century’s industrial economy. This is a command-and-control, hierarchical, risk-avoidance way of working with people. In that world, it’s all about getting the job done, as in making something, fixing something, or moving something, and collecting money for it. In other words, managing hands.

In the current knowledge economy, organizations, especially those that are supposed to be about the comfort and safety of customers, need to focus on what employees think, how they can improve continuously, and what they can contribute to the success of the organization. Companies today need a high level of collaboration, communication, and cooperation. Employees need the freedom to make decisions and do the right thing for customers and for each other. No sense hiring smart employees and then telling them not to think.

United CEO Oscar Munoz’s initial response to the Dr. Dao situation was classic managing-hands. He blamed the customer and then he blamed individual employees. The focus was on following policies and procedures, not doing what’s best for customers. Fortunately for the company, Munoz seems to have come to his senses and now realizes that the culture of the organization is to blame. He has since taken responsibility and acknowledged that the incident was a result of how staff do their work. Washington Post reports:

In an interview with NBC’s Lester Holt, Munoz called the incident “a system failure across the board.” He said outdated policies and procedures, which focused more on operations and logistics than customers put all those involved in “impossible situations.”

This acknowledgement by Munoz of a systems failure is a major step in the right direction. An operational mindset had taken over common sense. Employees believe that they must follow the rules even when the rules are not appropriate or ethical in a particular situation. The airline has the small-print right to remove a passenger to make room for staff who must arrive in another destination by a certain time. However, employees must feel free to ask themselves in each situation if that is the right thing to do.

The ten, policy and procedure changes that United said it will enact over the next year should help. One of those changes should go a long way toward United becoming a more customer-focused company. As reported in USA Today, flight attendants and gate agents will be given much greater authority to address customer problems. USA Today quoted the company:

Rolling out later this year, United will launch a new "in the moment" app for our employees to handle customer issues. This will enable flight attendants (by July) and gate agents (later this year) to compensate customers proactively (with mileage, credit for future flights or other forms of compensation) when a disservice occurs.

This is all well and good but the most important change that needs to occur in United is to shift from managing hands to managing minds. This means developing every employee, creating a trusting and empowering work environment, facilitating collaboration, communication, and cooperation among employees and with other stakeholders, encouraging risk-taking and experimenting as a way to improve, and continuously learning for the betterment of individuals, teams, and the whole organization.

[Look for our forthcoming book from ATD titled, Minds at Work: Managing for Success in the Knowledge Economy]