In a previous article1, I challenged with a choice between profit and people. Most leaders have to make tough calls and what they really believe about profit and people drive those choices. Few consider the hidden costs associated with pursuing profit, but also the hidden costs associated with employing people. Research done some time ago in New Zealand put the true cost of employing staff at salary + 50%, accounting for all the indirect costs of employment. This begs two questions:

  1. How do you count both direct and indirect value (dollar benefits) of employing people – humans – in the workplace, as opposed to deploying artificial intelligence?
  2. Are you realizing the full value of your payroll (+ 50%) investment in people?

“What would happen if a plant manager used 5% of manufacturing capacity? Yet where knowledge is concerned, the company’s most critical asset is massively under-utilised. We need the whole person – head and heart, body and soul.”2

Most leaders nod when they read those words. They typically admit: Yes, we are most likely under-utilizing our human capacity – our single highest expense item.

The authors quoted above also stated: “Your brain is your own.  Your boss doesn’t own it; nor can any government own it.  You alone are the director of this critical means of production.” If that is true, how do you optimize human contribution i.e. return on your payroll investment?

 We shape our structures and then they shape us

Could your organization structures explain why you underutilize the company’s most critical asset? No matter how advanced your organization is technologically, as long as you employ people, their input (to tasks) and output (in terms of deliverables) are shaped by structure. A large component of people’s experience of structure is to do with ‘pecking order’. There are three dominant authority structures throughout life: before school, the parental and/or older sibling authority; at school, the teacher; at work, management. Due to past programming, most people unconsciously engage with authority in a mode of either submission/dependence or subversion/rebellion.

As human beings are typical shaped by social structures, there are reliable predictors of human action. Each of these authority types is a social system and the first law of thermodynamics applies: energy can neither be created nor destroyed but friction dissipates energy. This may well explain why human capacity is underutilized. This is how it often plays out:

  • Those in authority control access to resources – the cookie jar. It can become a daily win/lose power struggle.
  • Some employees “play by the rules” to earn their rewards, rarely putting their heads above the parapet. Others find ways to take control either by subterfuge or through subcultures (anti-establishment power blocks).
  • No one wins either game – instead, friction dissipates overall value. Individual insights that a system needs for renewal are suppressed or creativity and lateral thinking are diverted to activities that managers often label as disruptive.

Consider this extract. “People want their work to be challenging and interesting – they have for a long time, but more so now. Young people are often suspicious of established institutions of power and wealth. They believe that most organizations will destroy their individuality, which they feel to be both precious and perishable. Many people are tired of hearing about political democracy while living in an oligarchy for 40 hours a week and being governed by corporate or institutional rules which were not of their making and which they lack power to change.”3

It may surprise you to know this extract is from a book published in 1971. While technology changes us in ways we live our lives, the way people act at work is essentially the same. Is this why our organizations have simply not kept up with technology?

“It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.” That was Steve Jobs.

There is something ‘suspect’ about a command-and-control structure in organizations where human brilliance needs to flow in spontaneous application to unprecedented challenge. There are decades of research into conditions for human beings to excel (and even access latent mental capacity). Project Aristotle4 is only one example of this type of research. Leaders are finding that traditional ways of working and thinking no longer cut it. “At Imperial College London, the CIO was transitioning his team from waterfall to agile methodology when he discovered a serious workplace culture problem. Employee engagement was low…. Top-down messaging (wasn’t doing enough).5 As Owen McCall has discovered: “…digital is not about digital, it’s not about technology at all, it’s about value.”6   People and structures need to change to deliver what’s possible. It doesn’t work to simply overlay technology.

Getting the best return on human (“critical”) assets

If your organization depends on the people factor for success, there are simple ways to ensure you fully mobilize the brainware on the payroll.

  1. Replace a command-and-control hierarchy (which we know suppresses human ingenuity) with a hierarchy of purpose. Once you have revealed and defined with people what you are really there for, you trigger a primal and stable surge of commitment and intelligence in pursuit of that purpose. (Human drive is located in the midbrain which provides the ‘source code’ for neural network development to meet situational demands in pursuit of purpose.)7
  2. Stop trying to control everything. Instead, challenge people to set up control systems that are fit for purpose; that work to ensure delivery. (You think because you direct therefore you control but this type of control is at best an illusion.) David Marquet in his Intent-based approach to leadership shows the value of people trained for critical thinking instead of compliance. 8
  3. Give up (share) power. (Never mind, you most likely never had it. And power that comes from a ‘pecking order’ can be a liability.)9
  4. Ensure people see problems as a positive thing. To grow neural networks, you need situations that require new thought. If the work environment is so pressured that people can’t exercise cognitive power, you get a fraction of what’s possible. From my experience, the average workplace has plenty of challenge, but instead, capability is actually shrinking as people are under so much delivery pressure. (Cortisol has been compared to battery acid on the brain.)10
  5. We’ve all heard managers say “Bring me a problem wrapped in a solution” but I think we are past that manager/subordinate situation of old. Now it is about jointly defining the problems you will address within a framework of clearly-defined stakeholder expectations. The manager is a sounding board, to test collective thinking in a number of ‘what if’ scenarios.

I read this the other day: “Today, it is very clear that organizations faring well have agile executives. Crises demand that the person on top remain unfazed and stable when it comes to making timely decisions that will cut costs for the company and the level of risk as well.” 11 (emphasis added)

Is this executive a ‘heroic leader’ facing these situations alone while the surrounding intelligence withers away? Or is this leader a master at building human systems where brilliance at dealing with new and complex challenges is a natural flow-on effect?

You really can get more from the critical human asset. It starts with how you shape your structures including reporting lines but it doesn’t finish there. Even the flattest structures can harbour dictators who suppress brilliance. Once you have purpose-driven structures right, anything is possible. After all, the human brain is the one resource where the more you use, the more there is to use. How’s that for a smart investment?

Sources:

  1. “What’s Most Important to Thrive in the Digital Era?” by Cherri Holland Feb 12, 2020. https://www.institutefordigitaltransformation.org/whats-most-important-to-thrive-in-the-digital-era/
  2. Ridderstrale, J and K Nordstrom. Funky Business. Prentice Hall (October 2000) ISBN-10:8420530204
    https://www.isbns.co.tt/isbn/9780273659075/
  3. Fordyce, J. Working with people. 1971 https://www.amazon.ca/Managing-People-Handbook-Organization-Development/dp/020102103X
  4. Project Aristotle. https://rework.withgoogle.com/print/guides/5721312655835136/
  5. “How CIOs Can Lead Organizational Culture” by Lisa January 7, 2020
    https://www.gartner.com/smarterwithgartner/how-cios-can-lead-organizational-culture/
  6. “We want to be digital but what does it mean?” by Owen McCall. May 29, 2017. https://owenmccall.com/we-want-to-be-digital/
  7. Machado, Prof L. The Brain of the Brain. Cidade do Cerebro. Brazil. 1992.
  8. “Turn the Ship Around! How to Create Leaders at Every Level” video. David Marquet. April 2013
    https://www.youtube.com/watch?v=iiwUqnvY1l0
  9. Dr Dacher Keltner: The Power Paradox: How we gain and lose influence. 2016. https://www.youtube.com/watch?v=HS9VHBlYklc
  10. “Your brain at work: the stuff you need to know.” James Parsons. Nov 2017 https://www.untapped-talent.co.uk/news/2017/11/6/your-brain-at-work-the-stuff-you-need-to-know
  11. “CIO Priorities in 2020”. Neutrinos. https://www.neutrinos.co/cio-priorities-in-2020/

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