There is a firmly held belief amongst managers and H.R. professionals that the way to get people to perform better is to pay them for it. It “stands to reason” that employees are “coin-operated”, and it is a primary tenant of our management practices. If you want people to work harder, you must pay them more.

The best way to motivate your staff is with a carrot and a stick, and the best way to dangle the carrot (and wave the stick) is to rank people based on their performance and then pay (or discipline) them accordingly. The approach is so common it even has its own management jargon — stack ranking.

Flawed Logic

Whilst the logic may be obvious, it is flawed. No, let me be a little stronger; stack ranking is a foolish idea in so many ways:

Systems

• Most of your team’s performance is driven by the system they work within and has little to do with the individual. Think about the time it takes you to drive your children to school in the morning. Sometimes, the traffic is light, and you arrive there in plenty of time, yet at others, it is gridlock. The time it takes you to negotiate the school run has next to nothing to do with how fast you can drive. Would Lewis Hamilton or Michael Schumacher get there any sooner?
• We confuse variation in the system for variation between people. If I asked a team of ten people to flip a coin one hundred times and then rewarded the person who flipped the most heads, would it have been luck or skill that got them their bonus, and how would their coworkers feel?

Teams

• Business is a team sport. Success comes from cooperation. The aim is to get your employees to work together. Yet if you rank your staff and pay them accordingly, you will create competition. Why would anybody share the “best way”, go that bit further for a customer, or help their coworker if it hits them in the wallet?
• Everybody is different. People bring different skills, abilities, insights and perspectives to a job. Those differences spark ideas, solve problems and drive improvement. How can you build a diverse team if you rank everybody using the same criteria?

People

• Extrinsic rewards reduce performance for anything other than piecework. If that sounds counterintuitive, watch Dan Pink’s TED talk to learn why.
• When the stakes are high people cheat. Teachers cheat, doctors cheat, police officers cheat, and salesmen cheat. Admit it, even you have cheated. Stack ranking gives your staff a reason to cheat, and cheating destroys performance.
• Carrots and bonuses are a slippery slope. Once you start paying bonuses, you can’t stop. If you decide to take them away, it will damage your staff’s motivation.
• Rankings become a self-fulfilling prophecy. If you tell somebody they are a poor performer, they will become a poor performer. This is why it is unwise to tell your children they are stupid or ugly. I may not be the world’s best parent, but I am sensible enough not to have a favourite child.

The Acid Test

But let us assume all of the above is wrong. Would performance improve if your organisation doubled, tripled, or quadrupled the bonus it pays? Try it and find out.

A Simple Alternative

What should you do instead? If you have a fantastic employee, promote them, and if you have a waster, sack them. For the rest, pay them fairly and equitably.

Only a fool would think stack ranking is a wise way to manage their people.

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In every business, the work flows around the organisation something like this…

• Marketing specialists have an insight into what the customer wants.
• Research teams take that insight and develop a new product.
• Buyers purchase materials according to the new specifications.
• Logistics ship and store materials.
• Operations teams take the materials and produce products.
• Sales demonstrate the products to customers.
• Customers buy products.

That is a little simplistic, as the work can ebb, flow and go back on itself. It may also be that your organisation employs underwriters, data specialists or doctors, but the principal points are the same. Work flows around the organisation one way whilst information and money flow back the other, helping control the flow. The aim is to put a product into a customer’s hands and if the system works well, customers give you money.

Businesses work via a messy, complex system of activity and information flows.

How Is Your Business Structured?

Few managers structure their organisations to reflect the way the organisation works. Most marketing specialists work for marketing managers, who work for marketing directors. Research technicians work for research managers, who work for research directors. I could go on, but you know what an organisation chart looks like.

Organisational structures are rigid, hierarchical and ordered.

An Obvious Problem

The systems and processes are at odds with the functions and hierarchies. This insight is not new news. It is blindingly obvious, but it results in silo thinking which leads to all sorts of problems.

• The system has a chain of internal customers making requests, with a paying customer at the end. But in the hierarchy, the customers aren’t present. So, in most organisations, it is only the managers’ demands that matter.
• The managers are measured and rewarded on the performance of their functions. They aren’t paid to care about the system. So, the system’s performance (that the customer sees and feels) is rarely measured and invariably neglected.
• The managers optimise their functions to ensure they look good. They cut costs and allocate resources without regard to the system or customers, as each function looks out for itself.
• It is rare for one function to help another at its own expense. System trade-offs aren’t considered.
• System problems that could (and should) be resolved lower in the organisation are ignored. Information and complaints flow up and down the hierarchy as staff throw their problems “upstairs”.
• Decision-making slows down, and managers spend time reinforcing functional positions instead of improving the system.
• The lack of cooperation between functions creates walls, land grabs, and turf wars.
• Managers saddle the system with costs and delays.

In some organisations, it becomes so bad that it is surprising that the work reaches the customer at all.

The Elephant in the Room

If you optimise the functions, you sub-optimise the system, yet the system determines the revenues you receive, the costs you incur and ultimately, the profits you make. It is hard for anybody to argue about; silo thinking leaves money on the table and customers in the cold. Functionally driven businesses are poorly managed. It is inevitable.

That last statement makes people shudder, so here is a sense check. Is your IT service desk:

1. Staffed by helpful people determined to solve your problems and prevent them from happening again.
2. Outsourced to somewhere where they only care about low wages and getting you off the phone as quickly as possible.

Whilst your IT department may boast a “best-in-class cost base“, it is also responsible for a crowd of expensive employees who can’t get their computers to work. As the wealthiest man I ever met pointed out, “You don’t save yourself rich”.

(If you answered “1.”, please leave your organisation’s name in the comments section; I imagine plenty of people would like to work with you).

Ten Ways to Improve

If your organisation wants to make more money / serve more citizens, the solution is easy: improve the system and stop thinking about the silos.

1. Ask your internal and external customers to measure your service quality.
2. Act on their feedback. Stop the errors and late delivery.
3. Promote cooperation between functions, not competition. If you must have targets and goals, set them against customer feedback.
4. Appoint process owners, system directors, or business group presidents (call them what you want) and make them responsible for the system. But give them teeth. If functional managers can ignore them, then they will.
5. Go and look at the interfaces. Work stalls and costs spiral at the interfaces.
6. Involve your suppliers and distributors. Your customers don’t care where your business stops and your suppliers starts. Treat them as partners. Think win-win, not win-lose.
7. If your business is “business to business”, find out what your customers’ customers want.
8. Create plans and budgets at a system rather than a functional level.
9. Make sure everybody, visits and talks to customers.
10. Take a long-term view of system performance, not a short-term view of functional cost. Any fool can cut costs (and several have).

Scare Away the Elephant

I could go on but you have heard it before. It is easy to point out what to change, but it is hard to do as it challenges everything we have been taught about management. But if you rid yourself of the elephant, you will be amazed at how productive your organisation will become.

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“Your customer doesn’t want a drill. He wants a hole.”

You have no doubt heard that one before. Working through customer requirements is difficult, particularly when customers don’t know what they want.

Do Customers Want Cameras?

I found a story in an old 1990s textbook (The Leader’s Handbook). It goes like this:

Konica Cameras had a problem: they wanted to develop a breakthrough camera that would grab the market, but the feedback they were getting from customers only led to minor improvements. In a product development meeting, the then chairman Takanori Yoneyama made an observation:

“Perhaps we are asking the wrong questions. We ask for feedback on our cameras, but people don’t purchase our cameras to own a camera. They buy our cameras to take pictures. We see ourselves as manufacturing and selling cameras. Customers see us as a source of acquiring the capability to take photographs. Perhaps we should start seeking feedback on the pictures.”

Once Konica started to look at the customer’s photographs, they discovered that they were pretty dreadful, over-exposed, underexposed and worse still, one superimposed upon another. But in each case, the customer blamed themselves. They said, “I have bought a perfect camera; the problem must be that I am just a bad photographer”.

Konica realised that they needed to build an error-proof camera and went on to develop automatic focusing and exposure, film winding and flash. They ensured the customers were buying great photographs, not just great cameras. The new models did wonders for their sales.

Peter Scholtes

Do Customers Want Photographs?

The irony of the story is that those cameras are pretty much a thing of the past. As we all know, customers didn’t want cameras or photographs. They wanted memories. But that reinforces the point beautifully, your customers’ needs change.

What Do Your Customers Want?

At the risk of teaching you how to suck eggs, there are three main ways to determine what your customer needs. All of these are common sense, but common sense and common practice aren’t necessarily the same thing.

1. Go and see. If you want to know where to look, data is lovely, but there is no substitute for going and seeing for yourself. Some of what you see will be easily identifiable pain points. More challenging to discover are the hidden frustrations.
2. Ask them. A few open questions will tell you more than a plethora of closed ones. Leading questions will only give you the answers you want to hear. At the risk of stating the obvious, there is little point in asking questions if you don’t listen to the answers.
3. Try it out. Walking a mile in your customers’ shoes will tell you more than you’d believe. If you can’t try it (open heart surgery, for example), you can sit in the waiting room or stand in the operating theatre.

There is no guarantee that this will tell you exactly what your customers need or want — they probably haven’t got a clue — but it will take you a whole lot closer to finding out.

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Waldsterben is a nasty word. It is a German noun that means “death of the forest.” Trees have been dying across swathes of Germany and central Europe since the 1970s. Leaves and needles fall, and the bark drops off, leaving great tracts of tall, dead stumps. It is a dismal sight and has been cited as a reason why Germany is one of the most environmentally conscious countries in the world. The devastation is clear for all to see.

Unhappy foresters blame the climate for their troubles. A slew of environmental changes caused the tragedy, be it the pollution and acid rain of the 1980s or, more recently, global warming, drought, and heat waves. Environmental changes weaken the trees, and so they may also fall prey to infestations of parasitic bark beetles and other pathogens.

Focusing on the Trees

While ecologists agree with the primary causes, they also point at the big forestry companies’ actions. German forests are mainly commercial and artificial. After two world wars, the country was reforested with fast-growing Norwegian spruce planted as a crop to be harvested and used by the construction and timber industries. A natural forest is a diverse mix of plants, animals, birds, insects and microorganisms. By contrast, the farmed German forests are regimented lines of a few tree species planted by the thousand.

This conformity has two weaknesses:

• By putting all their eggs in one basket, the foresters have opened themselves to risk. If conditions are poor for one tree, they are poor for them all. One dead tree quickly becomes thousands.
• The monoculture lacks biodiversity. A natural forest has a web of interactions that stabilises it ecologically. Fungus grows on rotting tree stumps, which pass nutrients to grasses eaten by caterpillars and preyed on by birds… The same birds that eat bark beetles if there is an outbreak.

My interconnected web is simplistic, but you get the idea. By contrast, industrial forests are rural wastelands that succumb easily to environmental changes and disease.

There is a considerable debate in Germany about how best to recreate the lost biodiversity. Foresters are looking for the most economical mix of trees to plant, whilst environmentalists say the best thing to do is leave the dead forests alone, let nature work its magic, and it will rebuild a stable ecosystem.

Look at the Forest, Not the Trees

This post isn’t an ecological rant. (Well, maybe the postscript). It is an observation about systems, businesses and organisations.

There is an old Sufi teaching story:

You think that because you understand one, you also understand two because one and one are two. But you forget that you must also understand “and”.

You might not be able to see them, but the interactions are all important.

The tall, fast-growing spruce looks impressive, but the network and connections make a forest strong, not the individual trees. The same is true in your business. You can hire the “best people”, sheep-dip them in the “organisational narrative”, and dress them in your corporate colours, but you won’t thrive.

Focus on the System

Strength in an organisation comes from the interactions, communication, and cooperation between individuals, the feedback loops and information flows. Not by ensuring everybody thinks and acts the same way, chants the corporate mantra and fits the same mould.

If you want your organisation to flourish, create diversity, not conformity, and manage the interactions, not the individuals. Look after the forest, not the trees.

Postscript

To protect the environment, offset greenhouse gasses (and meet their legal obligations), companies are buying up farmland and planting trees to capture carbon. To maximise the return on investment, these organisations are planting vast monocultures of commercial pine, eucalyptus and teak that will grow tall and fast and can be harvested for timber and sold at a profit.

We are hell-bent on learning the hard way.

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Nick Wallis writes a story that should be a work of science fiction. Like Jurassic Park, he takes a ridiculous premise but then plays the idea through in a totally believable way. Nobody could recreate the dinosaurs, but good fiction takes a bizarre proposition and makes the outcome plausible.

Likewise, no Chief Executive would allow her organisation to wrongfully prosecute and imprison innocent contractors and employees. Yet that is the crux of the Post Office scandal. The rest of the story is only a damning reflection of poor corporate culture and behaviour.

Business Transformation

The Post Office went through a standard business transformation programme. They automated swathes of their paper-based processes by appointing a supplier — Fujitsu — to build a new IT system. In so doing, they created efficiency improvements and process transparency. They also appointed a new Chief Executive to ensure the organisation banked these and other savings, challenging her to make the organisation profitable.

The programme was such a success that the Chief Executive received a CBE in the 2019 New Year Honours List for services to the Post Office and to charity.

Corporate Failure

In his book, Nick Wallis shares a contrasting view of the programme. He explains how the IT system produced balancing errors in the accounts of post office branches.

All new systems have bugs, yet this one created a deluge of personal tragedies. The sub-postmasters on the receiving end of the errors became embroiled in a Kafka-esque nightmare as the dysfunctional culture and bovine managers in the Post Office refused to accept the issues, perpetuating the belief that the problem was with the people, not the technology.

This denial resulted in hundreds of sub-postmasters being wrongly tried and convicted for theft, fraud, and false accounting, creating one of the most widespread miscarriages of justice the UK has ever seen.

Management Failings

Nick Wallis’s tale is understandably light on what was happening within the Post Office (the Chief Executive preferred to hide from him than answer his questions). Still, reading between the lines, it is easy to imagine a web of management weaknesses:

• A focus on profit rather than purpose. The relentless drive by executives to make the Post Office profitable undoubtedly fuelled the organisation’s push to recover “stolen” cash.
• A dogmatic belief in system infallibility. Rather than investigating data issues, staff refused to accept the system could be wrong.
• Wilful blindness. As the evidence mounted that the system was at fault, the Post Office continued to denounce its critics and paid no heed to the problems.
• Use of targets to drive performance. Post Office investigators were targeted with the value of the recoveries they made. Is it surprising they didn’t listen to the sub-postmasters they were pursuing?

The list of management failures continues, including a good news culture, corporate whitewashing, adversarial supplier management, and an RFP process weighted almost entirely toward cost.

Dysfunctional Culture

While the book explores the scandal in all its horrific detail, the part that fascinated me (and had me screaming at the stereo in the car whilst listening to it) was the way it demonstrated how insidious the cultures of large organisations can become. Employees within the Post Office and Fujitsu went about their daily business without batting an eyelid to the fate of the sub-postmasters they were persecuting.

Hundreds of staff must have known (or at least suspected) what was happening in both organisations. Yet only one whistle-blower was prepared to take a stand. That fact is a disturbing indictment of both human nature and corporate culture.

Recommended Reading

It will cost the UK government and the taxpayer over £1 billion to fix the situation. Yet similar management failings are alive and well in many large organisations. The Great Post Office Scandal is a case study of how not to manage a corporation. It should become compulsory reading at every business school. It is far more valuable (and shocking) than the usual tomes on strategic management. Nick Wallis has written a fascinating book.

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I’m in the doghouse. Mrs Lawther asked me to do the washing whilst she was out. As I am a modern man and expect to do my bit, I was happy to comply with the request. Unfortunately, there was a complication. The washing included my wife’s very chic and expensive dress. Ordinarily, this is a hand-wash-only item, but Mrs Lawther assured me that putting it in with everything else in a “30^oC Mixed Load” wash would be fine. It went into the washing machine with underwear, shirts, and my daughter’s school uniform.

Two hours later, whilst I was relaxing and reading a book, my wife emptied the washing machine (I was only asked to switch it on). I received robust and frankly unfair feedback about needing to look at the b####y dial whilst setting the machine. She also asked me — maybe instructed — to buy her a new dress. I had washed everything at 90^oC.

I professed my innocence. Only an idiot would set the machine at 90^oC when instructed to run a cool wash, but when I looked at the dial, it became uncomfortably clear that I had made a mistake. The 90^oC setting was only one notch up from the “30^oC Mixed Load” point.

The Accident That Was Bound to Happen

Sooner or later, some fool would make the mistake. Unfortunately, I was the fool. Some other fool with the same washing machine will undoubtedly repeat the error.

But here is the question:

Who is the bigger idiot? The husband or the designer? If the selector moved progressively from cold to hot, instead of making 60^oC leaps, I’d have only washed the scarf at 40^oC, and nobody would have been the wiser.

Design errors are lurking accidents. Some call them latent human errors. They are mistakes waiting to happen.

Design Error is Rife

Have you ever:

• Pulled on a door handle, only to find it was a push door?
• Sworn at an overly complicated phone app that will not do what you want?
• Ignored a PowerPoint Slide because it contained too much information?

It is easy to blame humans for errors, but if you want them to stop, a fresh human isn’t the solution, though better-designed products, software, and processes might be.

Design Out the Errors

In his book, The Design of Everyday Things, Don Norman (director of The Design Lab at the University of California) explains the principles of good design. They are as relevant to business processes and systems as to consumer goods. Some of my favourites include:

Be Clear and Simple

Less is more, as it removes the number of ways things can go wrong or be misinterpreted. Take away the knobs and dials and adjusters (or data and reports), so only the information and actions that are necessary remain. Apple, Google and Amazon are masters of simplicity.

Provide Visual Cues

If your business process design must be complicated, add visual cues that make it obvious to customers and staff what they need to do next. The Schiphol Fly is an excellent example of a visual cue.

Error Proof the Design

If people can’t do the wrong thing, performance can only improve. There are plenty of ways to make it easy for people to do the right thing instead.

Give Real-Time Feedback and Validation

Provide feedback so that people know if what they are doing is working or not. Rumble strips on the side of a road are great for warning a driver of impending doom. The feedback is instant. However, the delay between adjusting a thermostat and the temperature changing in a room can lead to wild fluctuations.

The faster you can provide feedback, the less likely people will over-adjust.

Think About Context and Mental Models

Our experiences have conditioned us to look at the world a certain way. Red is bad, green is good. Clockwise tightens, anticlockwise loosens. ABC, accelerator break and clutch. Building on existing conventions makes it easier for people to understand how things work.

If your design is novel or counterintuitive, don’t be surprised when people do what they think is right instead of what you want.

Create a Clear Hierarchy

If you provide information for people, make sure the important things are clear and bold, and the supporting information is smaller and less likely to attract the wrong sort of attention.

The Three Mile Island nuclear incident could have been prevented by moving the dials on the control panel, and the Oscar debacle wouldn’t have happened if somebody had changed the font sizes on the award cards.

Reduce Cognitive Load

Error messages are great, but what should you fix first if you are presented with hundreds of them? Boeing redesigned the feedback given to pilots of their planes so that only the most pressing issues are presented rather than overwhelming them with information.

Incorporate Safety Measures

Error proofing stops things from going wrong, but nobody gets hurt if a design is fail-safe and things go awry.

• A three-pin plug error-proofs the electricity supply.
• A fuse board ensures it fails safely.

Test Your Design

Once you have created the “perfect design”, test it with real-life employees and customers. What may be blindingly obvious to you won’t be as clear to them.

If You Only Do One Thing

You can’t eliminate design errors but can minimise them by creating a culture where people highlight and fix problems. Encourage your staff to be open about problems and issues rather than sweeping them under the carpet for fear of the consequences. Nothing will ever improve if everybody is busy jumping up and down, pointing the finger at human error.

Unfortunately, this is easier said than done. In a fit of generosity, I offered to buy a new washing machine instead of a new dress. My wife suggested an alternative course of action.

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I went on holiday last month. No sun-soaked Caribbean beach for me. Instead, it was the joys of Northern Europe. It rained every single day and then the rain became stormy (you should experience the Rotterdam to Hull ferry in a force eight gale, it is a big boat but it does rock). 

It wasn’t a dead loss though. I tried the gastronomic delights of the Netherlands (stroopwafels), Germany (currywurst) and Belgium (beer, plenty of it). Plus, can you imagine my juvenile glee when I ordered a cup of coffee in Maastricht and was asked if I wanted it with “slagroom”?

We had a good time. The only stressful thing (apart from the hunt for sick bags for my wife on P&O ferries) was driving. It wasn’t so much driving on the right, you pick that up by necessity very quickly; it was the road signs, constant fear that I was going to turn onto one of Holland’s myriad of bicycle paths, and worst of all the give way to traffic emerging from the right rule. It had me grinding to a halt at the most inappropriate times, I still haven’t worked out what I am supposed to do at a roundabout.

It isn’t that any of these signs or rules are inherently stupid. The issue is that they are different, which makes them hard.

I don’t have this problem driving in Wales or Scotland. The road signs might be in Welsh or Gaelic (my Dutch is better), but they use the same standard UK layouts and designs.

The Power of Standards

Standards are all important. They make things easy. It doesn’t matter whether they are road signs, USB ports, food safety rules or weights and measures. Standards prevent confusion, they grease the wheels and remove the grit. The fact that there is a standard is often more important than the standard itself. Think about the pedals in your car. There is no need for the accelerator pedal to be on the right and the break to its left (they could just as easily be reversed), but imagine if it wasn’t consistant.

There is More to it Than That

But this post isn’t about standards; a broader issue is at play. Standards only happen when there is cooperation between different teams, departments, organisations and countries. Standards are one of the many benefits of cooperation. Think win-win rather than win-lose.

Yet, if cooperation is so powerful, why is it that many, if not most, organisations manage their people by creating competition with individual targets, goals and incentive schemes? What would happen if your teams cooperated and (heaven forbid) you collaborated with your suppliers, customers and maybe even the competition?

Perhaps we could even cooperate internationally. My visits to the supermarket would be much more enjoyable if they stocked a s facing or two of slagroom.

Though my wife is not so sure.

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At the Portuguese Grand Prix in 1991, Formula One racing provided a textbook example of why organisations should avoid a blame culture.

Nigel Mansell, driving for the Williams-Renault team, was in first place as he pulled in for a pit stop. What should have been a slick sub-eight-second refuel and tyre change became a farce. As Mansell sped away from the pits, the wheel fell off, literally. People scurried out of the way to avoid being flattened by the tyre as it bounced along the pit lane into neighbouring crews.

By the time the Williams team had rectified the situation, replacing the wheel outside the pit box (violating all the rules), Mansell had fallen to 17th place and was ultimately disqualified for safety breaches. Williams-Renault’s chance of winning the championship that year died as the car sat stranded on three wheels. It was a very public screw-up.

What Happened?

The rules in a pit stop were simple. A team of mechanics would descend on the car. After finishing their task, they stuck their hands in the air to signal the all-clear. When all the hands were up, the team leader (also known as the lollipop man because of the sign he holds) signalled the driver that he could leave.

On this occasion, the mechanic who had just replaced the right rear wheel raised his hand into the air, but his teammate hadn’t finished tightening the bolt. According to Mark Jenkins (in his book Performance at the Limit), the mechanic wasn’t signalling completion but trying to get help for his colleague who had cross-threaded a bolt and needed a new one.

You can see the action in this video.

What Would Happen in Your Business?

The mechanic shouldn’t have raised his hand, nor should the lollipop man have signalled the all-clear until everybody’s hands were up. It cost Williams-Renault dearly.

In most businesses, the blame culture would have kicked in. Those responsible would (at the very least) have been put on “personal development plans.” In many organisations, it would have been curtains on their careers. The purchasing team who bought the bolts would also have received a good kicking. Clearly, the bolts were no good, and here was an opportunity to distribute some blame. They, in turn, would have scalded the supplier and demanded a penalty payment for the failure.

What Would You Have Done?

Imagine you were the mechanic with a couple of seconds to tighten a wheel with a cross-threaded bolt. How would you have behaved in the heat of the moment? I’d like to think I’d have had the sense to stick my hand up for help and try to get another one. What about you?

What Did Williams-Renault Do?

After reviewing the event, they decided their procedures had several holes. (If you watch the video in slow motion, as I was sad enough to do, it is all a bit unclear).

Williams revised their entire pitstop process. Up to that point, every team member should have raised a hand to show that their task was complete. Over 20 people work on a pit stop. Each wheel has a man to release and tighten the bolt, a man to remove the old tyre and another to put the new one in place. That is twelve people for a start. Then there are people refuelling the car, jacking it up, stabilising it, and letting it down. Some people clean visors and clear air ducts and others stand by with fire extinguishers. That is a lot of hands for the lollipop man to count and make a split-second decision.

Williams realised that within each sub-team, they only needed the man who was doing the last job to put his hand up to signal the all-clear. That made things a lot more obvious. Then, in an extra dose of sophistication, they gave these “last men” yellow gloves to wear, helping avoid confusion.

Perhaps most significant is the point about blame culture that Mark Williams draws out in his book.

We don’t hang anyone out to dry. You don’t just point a finger at someone and say they are to blame. That doesn’t help because all you do is create bad feeling. You try to isolate the problem and not the person.

Dickie Stanford, Williams-Renault Team Manager

Progress comes from understanding and resolving the problem, not “fixing” the person.

The following year, the Williams car, driven by Nigel Mansell, won the World Championship. Would your business have done the same?

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Fashions change, over the past twenty years we have stopped valuing management and started to value leadership. In an effort to promote leadership, businesses around the country have rechristend their “senior management teams” as “senior leadership teams”. I even worked for an organisation that insisted that all managers were called leaders, presumably in the vain hope that it would improve business results. It wasn’t the most successful change initiative I have ever seen.

Claiming to be a manager is passé, being a leader is much more 21st century. Would you rather your boss sent you to a “leadership course” or a “management course”? Leadership is where it is at, at least as far as your C.V. is concerned.

Is There a Difference?

I read a quote today whilst working through the definitions. It is profound but not very helpful.

Good leaders manage and good managers lead.

Henry Mintzberg

A more useful statement (which I wish I could claim as my own, but I’m not that clever) is, “Management is about process — leadership is about purpose”.

Leadership is defining the what and why, and management is working through the how, where and when.

Leadership without management is an exercise in wheel spinning, as nothing gets done. Management without good leadership can take you into all sorts of ill-thought-through, unpleasant directions, as history will attest. Neither is much use without the other.

Henry Mintzberg’s comment was more helpful than I thought.

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Road safety is an excellent example of a system where many have tried to change the public’s behaviour and stop things from going wrong.

Error proofing is a common approach, making things easy to get right and difficult to get wrong, but it isn’t without its problems.

Anti-Lock Braking

During the 1980s, two German scientists studied the effectiveness of antilock-braking systems by following a fleet of taxicabs in Munich (Aschenbrenner, 1994). As this was the 1980s, ABS wasn’t widespread; some of the taxis were fitted with the innovation, and others had conventional braking systems.

The researchers discovered that the crash rates for the cars with ABS were marginally worse (though not statistically so) than those without. The error-proofed vehicles were no safer to ride in.

Cycling Helmets

In 1998 another research team studied cycling accidents, working their way through the accident statistics among U.S. cyclists (Rodgers, 1988). They found that bicycle-related fatalities are positively and significantly associated with increased helmet use. If Americans wore helmets, they were more likely to die on their bicycle than if they didn’t.

 In this case, not only did error-proofing not work, but it also made things far worse.

Risk Compensation

The scientists devised a theory with the tantalising name of “risk compensation” to explain what was happening. It suggests that people adjust their behaviour depending on the amount of risk they perceive. The riskier a situation appears, the more carefully they behave.

The opposite, however, is also true. The German taxi drivers felt safer, so they took more risks whilst driving. The same increase in risky behaviour was true of drivers in the U.S. who thought that cyclists who wore helmets were less vulnerable. (They were proven to be wrong).

Preventing Mistakes

The theory isn’t without its sceptics but highlights a valid point. There are two options if you want to implement systems that stop your staff from making mistakes.

• The first is to build safer systems – make it easy for your staff to get it right.
• The second is to increase the perceived risk – make your staff more cautious.

In Holland, using “shared space” — where pedestrians and drivers use the same paths — has made drivers more cautious (the risks are more apparent) and reduced accidents.

Do your employees understand what could go wrong? If not, how could you show them?

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Image by Fietsberaad

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