“We started out with real agility and entrepreneurialism. Then, as we grew, we started to bring in lots of policies and process. Now we feel slow and less creative. We never wanted to end up being this type of company.”
Does this sound like your organisation?
This is a common refrain from many businesses. Growth means the founders become more distant from frontline employees. Growth brings “grown up” practices such as Board meetings with Non-execs who want evidence of governance. Growth brings appointments of Finance Directors who want tighter controls and HR who bring with them the panoply of weighty processes that typify larger organisations. Growth brings formalisation of verbal understandings and turns the ‘way we do things’ into consistent processes and values statements. Sometimes these changes are welcomed because they create a consistent service to clients and reduce waste. But they can also strip you of your creativity, slow you down and eliminate the joy you once had. They turn you into every other company.
If you feel that you’ve lost your entrepreneurial mojo, then this blog is for you. We’ve got some tips to help bring it back.
- A new approach to rule making
Think of that feeling of annoyance you get when you open the wardrobe door in your hotel room to find the coat hangers are the kind that stop you stealing them but are impossible to actually hang your clothes on. Traditional employee rules are like the equivalent of anti-theft coat-hangers. We adopt a lowest common denominator approach, ie: we take the worst possible behaviour and to ensure we protect the organisation, we create a rule or policy that means no-one, anywhere, will repeat the behaviour ever again. We thereby alienate the 99.9% of people who had no intention of behaving badly (ie: stealing a poxy coat hanger) to protect against the tiny minority. We create an environment in which people are less prepared to challenge authority, speak up, try something new, or take risks. Greater agility and creativity are almost impossible if your company culture is one of ‘wait to be told what to do, and, if you don’t do it, you’re in trouble’?
We are not talking about creating anarchy or chaos here, just some things you can do to develop a less constraining environment. It’s about creating more innovative thinking, more energy, and making it less painful to work here!
So, here are a few approaches you could try:
Ask your people which rules get in their way
If you want to start freeing people up, try asking your people which rules and policies get in the way of them providing the best service to customers, or from doing their best work. Commerce Bank even rewards its employees for identifying rules that prevents them from ‘wowing customers’ through its ‘Kill a Stupid Rule’ program. The use of ‘hackathons’ to get employees involved in shaping the rules and policies that govern their life at work is increasing and is seeing some great results.
Change your employee handbook
After all of the marketing effort and expense to convince new recruits that you offer a fantastic place to work, where innovation and empowerment is encouraged, your employee handbook arrives and immediately shows them otherwise. Countless pages of small print and legal jargon tell them all the things they are not allowed to do for fear of disciplinary action. Branding experts tell us that it is these “moments of truth” that shape our perception and the impression we are creating is not terribly appealing at precisely the moment when we want them to feel excited and confident. Many companies are re-writing their employee handbooks to focus more on the behaviours they expect and the environment they want to create than detailed policies. Think marketing brochure rather than legal protection.
Command and control leadership is becoming increasingly less effective in a time of greater uncertainty and change but we need to help people become more adept at taking responsibility for their decisions and to make sound judgements. Maybe we could learn something from the experiment in the Dutch town of Makkinga where they removed the traffic signals. The premise of the experiment was that 70% of traffic signs are ignored by drivers anyway but perhaps more importantly, the glut of prohibitions was treating the driver like a child and prevented them for thinking for themselves. The result of the experiment? The number of accidents declined dramatically as drivers began using their judgement more. This adult to adult philosophy is behind the Netflix expenses policy (“Do the right thing by Netflix”) which has also led to reduced expense claims at the company. These judgement-based approaches should be celebrated. They are brave, and they won’t stop the rogue employee who wants to do bad things, but they do foster the kind of employees we need for the future.
Could you replace long winded policies which try to cover every eventuality with a simple statement that encourages employees to use their judgement? One of my favourites that I came across in a manufacturing firm recently was a dress code that simply said “If you look in the mirror in the morning and have to ask yourself the question “can I get away with this at work?” – you should probably get changed”!
Apply the Trust Test
If you answer “yes” to the question “does this rule exist because we don’t trust some of our people to do it properly”, chances are you will be frustrating large numbers of really great people to try and stop a few rogues. Maybe it’s time to tackle the people you don’t trust and get rid of the rule?
- Human interactions not process
Sadly, the appointment of an HR Manager can often mean you are about to be subjected to a range of processes you never knew you needed. Here’s some advice from a recovering HR Director – resist them – there are better ways!
Most HR professionals have been schooled to believe that no organisation can survive or thrive without some or all of the following:
An annual performance management system
An annual engagement survey
An annual talent review (with 9 box grids to help line managers assess their talent)
A leadership competency framework
A high-potential programme
An annual bonus scheme
Whilst they may sound impressive, before you know it, your managers will be filling in countless forms and spending hours complying with processes that will add little or no value to your business. What’s worse is that the conversations, the judgements, the behaviours and the skills that you were told these processes would increase will actually diminish.
My blogs are always too long so rather than providing all the alternatives here, I’ve put in links to other articles (above) that provide new ways of achieving the same ends without destroying your entrepreneurial zest. But as a golden rule, if your HR manager suggests a new process, ask them four questions:
- Is it an annual process? If yes, chances are this will be cumbersome and won’t reflect the fluid nature of how your work is actually done.
- Is it based on how human beings actually think and behave or is it trying to compensate for poor line managers? If it’s the latter, then sadly, if you have line managers who have no interest in developing their people, there is no process that will change the outcome.
- Does it involve line managers categorising their employees into boxes or through ratings? If yes, then unfortunately you’re going to end up with some pretty useless data. Firstly, line managers struggle to identify high performance and potential with any real accuracy. It’s not because they’re stupid, it’s just that we suffer from “rater bias” and so our assessment of who’s going to be great in the future and who isn’t, is always going to be somewhat flawed. Secondly, potential is always contextual and we have an increasingly limited understanding of what will be required in the future.
- Is there evidence that this process adds value to the business? When only 8% of companies are saying that the traditional appraisal scheme offers any value, then we need to challenge the accepted wisdom of these decades-old processes.
There are many different ways to focus on improving human interactions without resorting to a tired and outdated process. If you want to get your entrepreneurial mojo back, then its important to stand up to an exuberant HR manager.
- Act like you’re still small
There’s a tendency for growing companies to try and reduce costs through centralising – of procurement or business functions such as finance and HR, for example. Whilst this might indeed reduce some of your costs, there are some real downsides in terms of loss of entrepreneurialism. It might be worth re-thinking your approach. In 2005, Chinese home appliance manufacturer Haier divided itself into 2,000 highly autonomous profit centres, splitting thousands of employees into micro-enterprise units each focusing on a single appliance or service. What this company recognised was that large organisations are incredibly hard to change, which is why start-ups are so much more agile and responsive than their monolithic counterparts. While one could question how a big business could retain its economies of scale if it were to split into smaller factions, Haier is a hugely successful company and decided that if it was to compete with start-up competitors out to steal their market share, it had better go some way towards replicating what they looked and felt like. If you start (or keep) thinking about your company in terms of being multiple business units rather than a monolithic entity, it will help you retain the agile and innovative mindset that made you great in the first place.
Maybe you are a growing company feeling pressured to replicate the behaviours of large corporates or a more established organisation who looks enviously at the pace and agility of your smaller peers. The accepted wisdom of the need for more rules, more process and increased centralisation may have made sense in times of greater certainty, but today’s business world needs something different. If you are going to create the necessary conditions for your people to act with more agility, deliver greater innovation and retain that entrepreneurial spirit, this ‘wisdom’ needs to be challenged and replaced with fresher thinking.