Under New Management

IT IS HARD to let go of the thinking behind some of the management tools we still use today. Designed for types of work that are no longer prevalent, these systems were designed for another time.

David Burkus reports on a number of seemingly radical management ideas in Under New Management. He stresses that we look for practices that are limiting employees’ potential and eliminating them. He questions best practices like:

Banning or limiting access to e-mail actually improves productivity. “Researchers believe that limiting email decreases stress and increases productivity because it cuts back on multitasking and distraction.” Consideration should also be given to limiting email to normal working hours.

The customer always come first? Putting employees first may be the best way to serve the needs of the customer. “Profits are driven by customer loyalty, customer loyalty is driven by employee satisfaction, and employee satisfaction is driven by putting employees first.”

As an artifact of the industrial age when managers needed to ensure that all shifts were covered, strict vacation policies were a necessity. But as industrial work gives way to knowledge work more liberal vacation policies often increase engagement and performance. “When you give employees trust and freedom to act responsibly, you don’t need nearly as many policies.” Trust allows employees to focus on performance. In one study, being trusted increased levels of oxytocin (the bonding hormone that creates a feeling of well-being) in the brain which in turn triggers more generous and trusting responses. “Trust breeds more trustworthy behavior.” Burkus also discusses the value of sabbaticals and pre-cations.

People don’t feel comfortable talking about salary. Should how much employees are paid be public knowledge? Some research says yes. “When people know where they stand and know how to move up in the range, they’re more motivated to work to improve their performance and improve their standing.” But while it can improve perceptions of fairness and feelings of engagement there are obvious drawbacks.

Without non-compete agreements organizations have little incentive to invest in employees or innovative research since they could easily leave and take their knowledge to a rival company. But research has demonstrated that non-compete agreements create a “brain drain” from those states that enforce them. For companies in stats without non-competes, when an employee leaves one firm for another, both companies benefit. Not only do both companies gain new knowledge but new connections between employees in both firms are created. “In effect, departing employees have a cross-pollinating effect on the ideas of both organizations.”

Burkus makes a case for ditching performance appraisals, paying people to quit, bringing in teams to the make hiring decisions, ever changing org charts, and closing open offices.

He also tackles the question: Are managers necessary? Although some reseach suggests that employees are more productive and engaged when they, and not their manager, control their destiny, these are not really mutually exclusive. Nevertheless, Burkus concludes, “To benefit from the motivating power of autonomy, leaders don’t need to give up total control and fire all the managers, but every leader does need to consider how their current structure might be limiting the perception of freedom and blocking the organization from its peak potential.”

Under New Management gives leaders much to think about. Read the research and the stories of those doing it and you decide.

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Posted by Michael McKinney at 10:27 PM
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