- 86% of the employees surveyed say they are most productive in their jobs when surrounded by colleagues with whom they have a good relationship/rapport
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Thursday, 12 February 2009
Social capital's impact on productivity
Thursday, 5 February 2009
Corporate social responsibility and the global reset
On Monday's Talking HR show, I spoke about how businesses need to prepare for the longer, as well as just the short-, term. And I mentioned the World Economic Forum leaders' call in Davos for a 'fundamental reboot' of the economy. This reboot will be partly structural, led by the 'global redesign initiative' to reform banking, regulation and corporate governance; and supported by other initiatives, such as Obama's curbs on executive pay. But I think it needs to be largely cultural as well; it needs to be about a new way of doing business.
This point is coming through strongly from many different areas, including many / most? of the leaders at Davos. But I still wonder how much things are really going to change. There's almost as much push back as there is momentum forward.
Take this article on CSR by Stefan Stern at the FT. Stern suggests that "now the recession’s here we can forget all that nonsense about corporate social responsibility (CSR) and get back to trying to make some money".
He describes my uncertainty about momentum and push-back as a "mismatch" between "politically correct rhetoric" and "the reality of what managers have to do every day of the week". And he concludes: "we need to cut through the well-meaning waffle".
So in Stern's view at least, nothing's going to change. We're just going to carry on with reducing levels of trust, happiness and engagement, and assume that organisations designed for the 20th century still do the job today.
I don't believe we're going to let that happen. And I hope that there are enough CEOs and business leaders in the world who for their own sakes, and the sakes of their companies, as well as any progressive or humanistic principles they may have, will ensure that we don't.
Stern provides a couple of examples of the 20th century leader. One is Terry Leahy, CEO at Tesco:
"In an article for the Daily Telegraph last week, Sir Terry let off steam about what he sees as the growing risk of over-reaction by governments and regulators in the current crisis. We risk losing sight of a few fundamentals: 'free trade in competitive markets, enabling individuals to pursue their own interests, and all within a clear framework of law,' he wrote. Do-gooders, whether they mean to or not, are likely to do bad.
Yes, he went on to say, the role of something called 'green consumption' could also play a powerful role for good, in cutting the use of carbon.
But it is obvious where Sir Terry’s priorities lie. In a lecture in the same week he told suppliers that they would be coming under increasing pressure to cut the prices they charge Tesco this year. How worried is Sir Terry by the thought that his suppliers may be forced into finding cheaper and potentially less environmentally friendly ways of producing their goods? Not very, would be my guess."
I do believe that CSR and more generally, the rebooted economy, need to be supported by more government regulation. Tesco does need to be constrained before the whole of the UK is covered over in concrete and fake clock towers. But both CSR and the rebooted economy also need to be supported by a real desire to engage.
Compare Stern's and Leahy's comments to those of Jeffrey Immelt, GE's CEO, speaking at the BSR CSR conference last year (on the video). Echoing the Davos leaders' call for a 'fundamental reboot', Immelt notes that the current economic crisis represents a 'reset' - not just a part of the standard business cycle:
"The era of transparency; accountability for corporations; responsibility - is profoundly different today versus where it was even six months ago... You've got the run the company with trust - compliance, governance and transparency... a long-term dedication to people. Companies need to stand for something - they need to be accountable for something more that just the money they earn..."
Immelt also suggests that "people who understand this will prosper in the future, people who don't understand that will be left behind". I tend to agree - GE's going in my HCM fund, and Tesco's staying out.
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Saturday, 31 January 2009
WELCOM to the world's leaders Facebook
It's been designed to help the participants connect and collaborate after the event and to help them give the world 'a fundamental reboot'.
I agree with the BT speaker that it sounds 'pretty darn exciting' and I wish I could use it... but the question has to be whether any of those gathered together in Davos will actually do so.
This article from the BBC business editor, Tim Weber, suggests probably not:
"The discussions here suggest that many companies are still struggling to move beyond having a colourful website towards really using the internet to their advantage.
And to make things worse, hardly any company knows how to cope with the rise of social media - the Facebooks, Twitters, blogs and YouTubes of the digital world."
Perhaps Barack Obama's influence will help here?
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Friday, 30 January 2009
MLab Management 2.0 conference
I've posted previously on management 2.0 and this week had an opportunity to attend a Management Innovation Lab event on the subject.
The video shows LBS Professor Julian Birkinshaw opening the event, and I'll be posting on some of the other sessions shortly. It was a great event, so I've got a lot to reflect and then post upon.
My only criticism would be that the conference was delivered in a very 1.0 way, but then I suppose that suited the audience. Even though these 200 people were there to learn about management 2.0 (which as Julian describes, is emerging as a result of changing workforce expectations, supported by Gen Y, and changing technological capabilities, ie web 2.0), only one other person other than me was tweating on the event.
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Tuesday, 6 January 2009
Trust and Social Capital
The book is really about national economies and cultures, but it makes some insightful points about trust and social capital which apply to organisational performance as well.
Fukuyama defines trust as the expectation that arises within a community of regular, honest, and cooperative behaviour, based on commonly shared norms, on the part of other members of that community. And it needs to be two-way, as explained here:
“Western managers try to appeal to their unions using the Japanese language of common interest between workers and management to convince the latter to loosen work rules or take wage concessions. But if Japanese-style reciprocal obligation is to work, the obligation and trust must flow in both directions. A Western trade unionist would argue, with considerable justification, that it would be naïve to trust management to seek the good of workers as well as management: the company would exploit any concessions made by the union while giving back as little as possible in terms of job security or other benefits.”
In Fukuyama's view, trust is the basis for social capital:
"In addition to skills and knowledge, a distinct portion of human capital has to do with people’s ability to associate with each other, that is critical not only to economic life but to virtually every other aspect of social existence as well. The ability to associate depends, in turn, on the degree to which communities share norms and values and are able to subordinate individual interests to those of larger groups. Out of such shared values comes trust, and trust has a large and measurable economic value."
He explains:
"Social capital differences from other forms of human capital in so far as it is usually created and transmitted through cultural mechanisms like religion, tradition, or historical habit… The accumulation of social capital, however, is a complicated and in many ways mysterious cultural process. While governments [and organisations!] enact policies that have the effect of depleting social capital, they have great difficulties understanding how to build it up again."
I think this is right, and is one of the reasons that it currently receives so little attention. However, I don't think lack of focus is sustainable - the benefits of developing it are just too great, As Fukuyama notes:
“If people who have to work together in an enterprise trust one another because they are all operating according to a common set of ethical norms, doing business costs less. By contrast, people who do not trust one another will end up cooperating only under a system of formal rules and regulations, which have to be negotiated, agreed to, litigated, and enforced, sometimes by coercive means. This legal apparatus, serving as a substitute for trust,entails what economists call ‘transaction costs'.”
Actually, I don't think this provides a particularly strong business case (it's about value for money in terms of the value triangle, whereas the real opportunities are to add or create value through social capital).
And in any case, the benefits of trust and social capital are not just economic, they're also human:
“That connectedness is not just the means to the end of earning a paycheck but an important end of human life itself… a side of human personality craves being part of larger communities. Human beings feel an acute sense of unease - what Emile Durkeim labelled anomie – in the absence of norms and rules binding them to others.”
As business starts to become more people-centric (something which will need to happen if we're going to avoid repeating the mistakes that brought on the current global recession), we will need to take account of this further benefit as well.
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Saturday, 3 January 2009
Collaboration in 2018
You'll have seen many sets of predictions for the new year / following decade. I'm not going to make any others, although I still think work will develop in the direction described by this, and my HCM blog.
However, I will reference Workforce magazine's predictions for 2018 (NASA's target date to return to the moon) which suggest that collaboration will be key by 2018.
"The top ranked prediction was that 'there will be an increased focus on infrastructures - such as social networks and wikis - to support strong relationships and collaboration'.
The second-most popular choice predicted novel work arrangements: 'the structure of work will become more adaptive, more informal and less focused on formal structure and static design solutions'.
Gurjar, of Infosys, envisions expanded use of virtual teams of employees who communicate extensively through videoconferencing, e-mail and text messaging, Gurjar said people are learning to work well together without much, if any, face-to-face interaction. At Infosys, workers text message despite sitting just a few feet away from each other'."
I don't argue against any of this, although I also think that we need to think more about what outcomes organisations are trying to achieve, before we worry too much about the infrastructures and work arrangements that will support these outcomes.
This was the focus of my survey conducted during 2008, and I'll be reporting on the outcomes of this over the next few days or so.
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Thursday, 18 December 2008
Lies, Trust and Chocolate
Lisette Howlett, managing director of www.hirescores.com notes:
"Companies spend so much time, money and rhetoric on treating customers fairly and yet there is a high level of institutionalised dishonesty. It appears to be part of the normal fabric of doing business."
It's not going to do much for trust within an organisation either.
This is one of the lessons in David Thompson's new book, Trust Unwrapped. Amongst many other facts and illustrations, this includes a story from 'Thank God it's Monday' in which a PA refuses to tell a caller his boss is out:
" 'I cant do that, you are here' came the response from the new secretary. After a pause she continued, 'If I lie for you now, you won't know when I'm lying to you'."
The main story is set in a chocolate manufacturer and other businesses, and uses these to show the benefits of allowing people to set their own hours, holidays and workload (eg ROWE) and even prices to develop trust.
My favourite paragraph is this one:
"Business isn't about products and services and stuff a lot of the time. It's all about feelings, emotions and relationships."
I think if more organisations understood this, there would be a lot less corporate lying than Hirescores' survey suggests there is.
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Monday, 15 December 2008
Carnival of Trust
There are some other great posts there too. I was particularly pleased to see this comment on BrainBlogger:
"As individuals, we strive to improve our human capital, or our economic value. We earn college degrees, take continuing education courses, attempt to expand our knowledge and master our respective fields. The more we know, the more we’re worth and it makes perfect sense (and boosts our pay!).
Yet, perhaps more attention should be paid to the value of social capital."
Which is of course exactly what this blog is about!
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Sociability and Solidarity
in 'What holds the modern company together?', they make the point that culture is community:
"It is an outcome of how people relate to one another... Businesses rest on patterns of social interaction that sustain them over time or are their undoing. They are built on shared interests and mutual obligations and thrive on cooperation and friendships."
I like this definition - and I'm increasingly finding that social (plus human and organisational) capital provides a more useful, granular way of looking at organisations than 'culture'.
I also agree with the author's perspective that culture can therefore be examined through the 'lens of sociology, which divides community into two types of distinct human relations: sociability and solidarity".
Solidarity (mind)
Solidarity measures a community's ability to pursue shared objectives quickly and effectively, regardless of personal ties. It is about relationships which are build on common tasks, mutual interests, or shared goals that will benefit all involved parties.
Sociability (heart)
Sociability measures sincere friendliness and non-instrumental relations (in which people don't see others simply as means of satisfying their own ends) among members of a community, associating with each other on equal terms. It is based on shared ideas, attitudes, interests and values and is sustained through continuing face-to-face relations.
Sociability leads to enjoyable work environments, morale, teamwork, sharing of information, openness to new ideas, creativity and engagement. However, reinforcing the recent Demos report, and like solidarity, sociability also comes with certain drawbacks:
"The prevalence of friendships may allow poor performance to be tolerated. No one wants to rebuke or fire a friend. It's more comfortable to accept - and excuse - subpar performance in light of an employee's personal problems.
In addition, high sociability environments are often characterised by an exaggerated concern for consensus. That is to say, friends are often reluctant to disagree with or criticise one another... The result: the best compromise gets applied to problems, not the best solution.
In addition, high sociability communities often develop cliques and informal, behind-the-scenes networks that can circumvent or, worse, undermine due process in an organisation... Friendships and unofficial networks of friendships allow people to pull an end run around the hierarchy... In other words, networks can function well if you are insider - you know the right people, hear the right gossip. Those on the outside often feel lost in the organisation, mistreated by it, or simply unable to affect processes or products in any real way."
To me, these aren't so much problems with sociability, as with poor execution or sociable approaches. I think increasingly, organisations do need to be sociable, and organisations need to find ways to avoid the drawbacks outlined by Goffee & Jones / Demos.
Two dimensions, four cultures
Goffee and Jones plot solidarity and sociability against each other to provide the two by two shown in the graphic. The authors emphasise that "none of the cultures is the best" but when discussing a fragmented culture (low solidarity, low sociability), they note "Few managers would volunteer to work for or, perhaps harder still, run a fragmented organisation."
They also have a few concerns about a communal culture (high solidarity, high sociability) too:
"The communal culture may be an inappropriate and unobtainable ideal in many business contexts...
First, high levels of sociability and high solidarity are often around particular founders or leaders whose departure may weaken either or both forms of social relationship.
Second, the high-sociability half of the communal culture is often antithetical to what goes on inside and organisation during periods of growth, diversification , or internationalisation. These massive and complex change efforts require focus, urgency and performance - the stuff of solidarity in its undiluted form.
More profoundly though, there may be a built-in tension between relationships of sociability and solidarity that makes the communal business enterprise an inherently unstable form. The sincere geniality of sociability doesn't usually exist - it can't - with solidarity's dispassionate, sometimes ruthless focus on achievement of goals."
So I think what Goffee and Jones are really saying is that organisations need high solidarity and high sociability, but not both (ie that the ideal culture is either networked or mercenary).
And I'd add to this, that solidarity is becoming more difficult to achieve, and therefore sociability is becoming increasingly important. So if you have to choose between the two, choose this (ie networked vs mercenary).
However, I still struggle to see how both solidarity or sociability, executed well, can be a bad thing. I'd respond to Goffee's and Jones' challenges by saying that organisations need to find ways of building sustainable cultures, which can support efficient achievement of goals, and that maybe if we did this, success rates in growth, diversification and internationalisation may be a lot higher than they generally are now!
Building sociability
Goffee and Jones also note that to build sociability, managers can:
- Promote the sharing of ideas, interests, and emotions by recruiting compatible people - people who naturally seem likely to become friends
- Increase social interaction among employees by arranging causal gatherings inside and outside the office, such as parties, excursions - even book clubs
- Reduce formality between employees
- Limit hierarchical differences
- Act like a friend yourself, and set the example for geniality and kindness by caring for those in trouble.
I think there are some great suggestions here.
Technorati Tags: Rob Goffee,Gareth Jones,What Holds the Modern Company Together,Why Should Anyone be Led by You
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Friday, 12 December 2008
The dark side of networking
- Exclude and discriminate
- Enable people to hoard power for themselves
- Promote the interests of the few.
The problem is that networks reflect the people who constitute them. So if the interests of these people and therefore the network and the firm diverge, this can increase problems rather than opportunities:
“Virtual, online network, power is generally less visible than in the formal organisation – where organograms clearly show who has authority and accountability… In a network, the rivers of power often flow underground… Without enough attention, these challenges jeopardize the very gains we presume networks can deliver.”
So network managers need to ask themselves:
- "Am I excluding some people from my network for no good reason?
- Does the network extend across gender and ethnic boundaries? Should it?
- What are the unwritten rules of network exchange – and are they fair?"
Demos' findings relate very closely to Rob Goffee's and Gareth Jones' research on sociability, that I've been reading after hearing Gareth Jones speak recently, and which I will review in my next post.
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