David Burkus, the author of Under New Management, spoke to us about overhauling our understanding of organizational management.
David was interviewed by Todd Greer, the Managing Editor for Nonprofit Performance Magazine.
How Innovative and High-Performing Companies Have Changed to Attract and Retain Top Talent
Todd Greer: You are seeing everything change. What was your general feeling as you were bringing the pieces of your book together?
David Burkus: Before The Myths of Creativity came out, I was not a creativity writer or researcher. I’d done some work in creativity and innovation, but my background is in psychology and leadership. The question that led me into creativity is this: What do the leaders of creative companies do? The answer turned into this whole thing about belief. The question in Under New Management is no different.
When I was writing The Myths of Creativity , there were many companies that were doing things differently, and it was working really well. We learned why hackathons work, and that produced another question: How else are companies differentiating themselves in terms of people practices? That led to this book, with ways that people are different and how it is better than business as usual. Better is defined as getting business results, and how they work so well.
It wasn’t a whole overhaul of the system. It was a realization that people already are different. It is not a moral case for why business needs to change, but it is a realization that some of the most innovative and highest performing companies already have changed. If you want to continue to attract and retain top talent, you are going to have to make these changes, whether you want to or not.
That is why I opened with the story of Frederick Taylor. It is not a rant against Taylorism, but a realization that Taylor designed a very great reinvention of the factory for the industrial age. We drag Taylorism from the factory to the office without questioning whether we should be using the same principles. If Frederick Taylor were alive and looking at the office, he wouldn’t prescribe the same things because it is a different type of factory. We are using outdated policies and practices.
Todd: In Change Your Space, Change Your Culture, the authors [Rex Miller, Mabel Casey, and Mark Konchar] talk about how the average building is 60 years old. Offices are taking shape with the ideas, framing, products, and services that we provided in buildings from the 1960s. How does that infuse into the work we do and inform the things we are doing? I think there are a lot of similarities here with what you are saying. With Taylorism, you are going back to an even earlier time period. That is such a great call for each of us in our organizations.
David: The two big levers that senior leaders pull are culture and systems. Who we let into our organization affects our culture. But we get to say what our systems are. Behavior is a function of the person and the environment in the same way that organizational behavior is a function of the culture (the personality of the organization) and the environment (the systems that are in place). We give all sorts of talk to culture, and it is a hugely important piece. It works anonymously alongside those systems. We also need to take a deep look at our systems. Are we using systems from the 1960s, or are we using systems that are better for managing work today?
< h1>New Dimensions of Organizational Charts</ h1>
Todd: As we look at how Under New Management operates within the confines of the social sector, the nonprofit sector, there are some really intriguing pieces. You suggest that we should be putting customers second and employees first. What might that look like in the nonprofit sector when we are talking about the importance of catering to our donor bases and taking care of volunteers?
David: The nonprofit sector has an interesting dynamic in that you can define customers in two different ways. To some extent, you can do this in the for-profit sector in a publicly traded company. Customers are both the actual customers and potential shareholders. Whether it’s for-profit, nonprofit, or public sector (like education), there is a growing realization that customer satisfaction is a result of employee satisfaction, particularly satisfaction in the area of the value zone. The value zone is any job or activity that interacts with the customers, mostly on the front line, but there are others as well. But we don’t act that way.
When we draw an organizational chart, we draw it from the top down. But the number one criticism of a lot of nonprofits has to do with overhead or senior people getting paid too much. Those complaints resonate most in organizations where it really is apparent that there is a guiding elite class that is not necessarily taking care of the people who interact with the customers, whether that be the donor base or the people actually served.
There is an idea that accountability, in order to best serve the needs of donors or the people that the nonprofit serves, should not be built from the bottom to the top – meaning the front line people are accountable to the senior leaders who are getting paid a lot or a little. Instead, every management role should be a support role for those people who are interacting and being the hands and feet of the organization. When that happens in organizations for which overhead is crazy, we don’t hear that complaint. Why? Because the people we are interacting with, the donors and customers, know that there is value created there. We get it. We would call that a much more humane organization.
Especially in faith-based nonprofits, we use this term of hands and feet. There is an idea that the brain or the other functions of the body ought to be serving those hands and feet because the only way people know about us is through our hands and feet.
Todd: That is a real reframing. Obviously, it’s a big challenge and change in the for-profit world, as well. It turns our attention to how we come into contact with people. It’s rarely the senior management. It’s very much the front line.
David: In most nonprofits, the front line is actually volunteers. If the volunteers, meaning the people not on salary, are the ones that are mostly interacting, what are we doing to create a good volunteer experience, in addition to a good donor experience and a good experience serving our constituents?
A lot of the donor class, in addition to giving money, also volunteers. What are we doing to create a positive experience for them? Most of the nonprofits that I know think that turnover and volunteer burn-out is a reality that we need to face, and I think it’s because they haven’t actually looked at the fact that the volunteers are the value zone. They are the hands and feet.
Changing Job Titles
Todd: I was 18-19 years old when I worked on my first political campaign. One of the first things I learned in volunteer management was that titles are free. It stuck with me from that point on. Our intern is the Director of Brand Strategies, because he is doing stuff in and around that. It gives him a title that makes him feel important and valued. It allows him to go do the work.
David: The first person you meet at Google is the receptionist, whose title is the Director of First Impressions. That is a realization of where the value zone is. The first person visitors meet is that person. Who that person is, and making sure that person is empowered to create a great first impression, is the key.
Internal Email Regulations
Todd: One thing you discussed caused me concern. I bristled at it initially, but I think you are onto something here. What are the outcomes if we outlaw or restrict email within an organization?
David: Most people can’t envision a world without email, despite the fact that email is still in its infancy. Email was invented in the mid-’90s, although a select few used in the late ’80s. That’s less than 30 years ago. It’s hard to remember that.
When email first came out, it was awesome because it was a cheap and asynchronous really cool shiny tool. Previously, the cheapest technology for getting an asynchronous message out was physical paper. Because email could bridge a gap so quickly, you could send it around the world in a few seconds, while a letter took several days. There was an expectation to not hear back immediately from a physical letter. Email has the benefit of a memo or a letter but, because it is so quick to send, it actually has the expectation of a phone call. That creates a lot of distress. Because it is cheap, we send a ton of it, and we expect a response immediately. We have never had a conversation about whether this is actually the best tool for all communication.
I am only talking about outlawing internal email. You have to use whatever communication tool your customers, constituents, or donors prefer. My banker knows that I don’t like talking on the phone and prefer email, so she does it that way. Internally, the question is this: What is the best technology? There are now a lot of companies that are having that conversation. Most of them are putting limits on internal emails, and some are outlawing it entirely. It’s an outgrowth of a real conversation about the best communication tool.
I am more in favor of companies taking deliberate steps to give their people their nights and weekends back by shutting down the email server or making it an unstated policy and cultural fact that we don’t send email on nights and weekends. But I am not opposed to the idea of banning it internally entirely.
Companies that ban email entirely usually create some other system that is digital and text-based, but less disruptive or distracting, allowing people to keep that ease of focus, asynchronicity, and cheapness of communication, but on their terms. That’s really what I prefer: taking this communication tool and making it one that serves us on our terms. Very few people know that they can shape tools however they want, instead of how they were given to them. Most people don’t change preferences in Outlook; their inbox is still checking itself as often as the guy in IT decided it should check. The ringtone on most people’s phones is the ringtone that came with the phone. We default to defaults. Email is a great example of something that may not work for us.
Outlaw it. Limit it. Restrict it to certain times of day. Whatever you want to do is fine as long as you are taking active steps to control the tool, instead of letting the tool control you.
Setting Vacation Schedules and Rearranging Management Systems for Greater Autonomy
Todd: There are a couple of things you include that may seem counterintuitive. You talk about getting rid of vacation policies, paying people to quit, and firing managers. What could the outcome of these types of changes look like in nonprofits?
David: A no-vacation policy does not mean no vacations; it means we are not going to track people’s vacations. That is more vital in the nonprofit sector than in the for-profit because, presumably, the average, equally skilled, equally talented, equally qualified person working in the for-profit is going to get paid higher than in the nonprofit sector. For-profit workers can afford to put up with a little more micro-management and demands on their time.
The nonprofit sector lends itself to an unlimited vacation policy because it is a benefit that doesn’t cost as much as we think it does. On average, people take about the same amount of vacation days as they did before; it is not about days taken or not taken, but it is about trust. We are saying that we are not tracking your actions 8-5 Monday-Friday when you are working, so why are we tracking days that you are not working? We will trust you to do what is in our best interest and in your best interest in getting a break. Trust is free, in general. If you put your trust in the wrong person, it does cost you from time to time, but you handle that on a case-by-case basis, instead of not trusting anybody. So unlimited vacation: definitely.
Paying people to quit is expensive, but people take the deal. You have to offer them a bonus to quit when you find out they are not a cultural fit. Paying people to quit pays off the most when people decide to stay, because they have worked in the culture for a while and they have decided that a month’s salary is not worth losing out on this opportunity.
Nonprofits have a chance that for-profits don’t have: instead of paying people to quit, hire your volunteers. Make it a requirement for getting the job that you have already volunteered for our organization or one that serves a similar focus. You can prove the same dedication to the cause through the actions of your volunteers. In a for-profit, if people are volunteering to work for you, you are probably breaking labor laws. But in a nonprofit, it’s fine, and it stays in line with the idea of sample the culture, work with us, find out if it is a good fit for you, and then we will hire you.
In a smaller nonprofit with smaller reach, it is harder to say that we will only hire people who have already volunteered for our company. But a faith-based nonprofit, no matter how big or small, probably won’t have that problem. Out of a pool of people who have already worked with similar industries, you know people will be a fit for the cause, even if they haven’t worked for your organization. That is still a safer bet than hiring just anybody.
Firing the managers is a structure that different companies handle differently. It begins with the idea of a knowledge-work organization. Nonprofits were probably knowledge-work organizations before for-profits were.
In a service-based organization, firing the managers does not mean having no management. It means we are turning management over to the teams or individuals who usually know more about their jobs than do their managers. We live in a really interesting time where an individual contributor, in order to be fully qualified for their job, will likely know more about their job than the person who supervises them. If that is not true at the time of hiring, it will eventually be true because the nature and tasks of the work demand it. A manager has to pay attention to a lot of different things, and an individual contributor to one big thing.
The idea is that the people who are doing the work should be given more autonomy and some responsibility for managing their job. We see a lot of benefits with this. You can do it by turning it over to team-based management or by managing a variety of different individual relationships.
Morningstar Farms has workers sign a Letter of Agreement with everybody they would interact with in doing their job. You and the ten or eleven people you work with have clearly-stated expectations of each other, and you rate each other on how well those expectations are met. All of those things are designed to give autonomy over to people.
I am okay with however you create more autonomy in organizations. That could be total management elimination or turning it over to teams. If there are parts of your organization where individual contributors have more expertise on how to do their jobs than the managers, then we are probably asking the managers to do things that the individual is better suited to. It doesn’t mean having no management. It just means changing who is responsible for that management.
Innovation in Rigid Organizational Structures
Todd: Have you read Teaming by Amy Edmondson? There are similarities between writing the org chart in pencil and her teaming principles, which I think is a part of this whole wave of the future.
I am in an organizational chart that is not written in pencil yet. How do I make adaptations in my organization if I don’t have the positional power to make the changes from a structural perspective? What little things can I do to begin to implement these things?
David: Just because you have a certain reporting relationship doesn’t mean you have to shun people who are in very different functions working on different projects. IDEO, an industrial design firm that used to write the organizational chart in pencil much more frequently, found that, as they grew, they couldn’t overhaul the whole thing. It is harder to do that with an organization with hundreds of people, although Eden McCallum figured out how to do it with an organization of thousands.
But IDEO allows a certain percentage of giving time. Giving time is you working on somebody else’s project. That creates a cross-functional thing that works exceptionally well for getting a lot of benefits of writing the organizational chart in pencil.
Even if you can’t roll that out on a company-wide level (although I think it is a pretty good idea to get organizational support on it), it doesn’t mean you can’t look at your overtime. If you are paid on salary, the assumption is we are paying you for roughly 40 hours a week of work. Nobody has a right to tell you what to do with the extra five hours in a 45-hour workweek. You can volunteer and spend your time working on another project, getting the benefits of that.
It will also build a huge amount of social capital across the organization because you will have connections outside of your silo. I see that more and more. A former student of mine called because she was working in sales for a for-profit, and the training department approached her about creating a role for her that was almost a liaison between two things. She didn’t know if she wanted it or not. I told her she had the opportunity to span a gap, which is huge; it will be an incredibly valuable position. Regardless of what your function is, find the time to volunteer on projects that are not part of your function because you’ll have the benefit of meeting other people. They will benefit from your outsider experience. You will benefit from learning from them, leaving you better prepared as you move through the organization.
If you can’t roll it out entirely, it doesn’t mean you can’t practice it yourself just by volunteering on certain positions. A nonprofit lends itself even more to that because of the way nonprofits interact with the people who – even if they are paid – volunteer to work for your organization.
Todd: If you can give one closing thought, what would that be?
David: The biggest truth is that great leaders don’t innovate the products; they innovate the factory. This is what Frederick Taylor did 100 years ago. You can’t have the assumption that you do it once, and it’s done. The nature of work changes, so we need to look back at the systems we have designed and probably innovate them. Innovative ideas, whether it is products, services, for-profit, nonprofit, public sector, it doesn’t matter, are always preceded by an innovation or a factory and the systems leaders put in place. Great leaders don’t focus on the products. They let their people focus on that. Leaders focus on the factory and giving their people what they need to be innovative.
David Burkus, author of The Myths of Creativity, LDRLB, and Under New Management, writes for The Creativity Post and 99U. His passion is leadership, innovation, strategy, and the transfer of good ideas. Find him at http://davidburkus.com, Twitter @davidburkus, or Facebook/drdavidburkus
This article is reprinted from Vol. 3, No. 2, of Nonprofit Performance Magazine. Subscribe today!