Order

TABLE OF CONTENTS

§ Work and Human Nature: About Happiness
     Work and Happiness: The Crucial Connection
     Human Beings Are Not Machines
     The High Cost of Command-and-Control
§ Values-Centered Governance: A Closer Look
     What Are Values?
     Synchronizing Organizational and Individual Morality
§ A Radical Shift of Mind
     Rethinking Our Mental Models
     Replacing Inferior Values
§ Four Values for Nurturing the Workplace Ecology
     Localness: Decision-Making at "the Scene of the Action"
     Merit: Judging Decisions on Their Own Worth
     Openness: The Free Flow of Information
     Leanness: The Antidote to Excess

ABOUT THE AUTHOR

Bill O'Brien was chief executive officer at Hanover Insurance Company from 1979 to 1991. During his tenure, Hanover moved from the bottom of the insurance industry to the top quartile in terms of profit and growth. Bill earned wide admiration for his groundbreaking efforts in refining corporate vision, values, and purpose. An early adopter of action science tools and systems thinking, he also guided the framing of the company's governing ideas, which included the four central values discussed in this volume.

Since retiring in 1991, Bill has continued to help organizations link individual growth and economic performance. He is a founding member of the board of governors of the MIT Center for Organizational Learning, and a founding partner of the Centre for Generative Leadership.

EXCERPTS

Human Beings Are Not Machines

Many seasoned managers agree that, over time, it is human capital that creates financial capital, not the reverse. Yet corporations rarely devote the same care to understanding the time-tested principles of human development as they do to applying financial and scientific principles to their tangible affairs. In fact, numerous organizations actually depreciate their human capital by unconsciously imposing reductionistic assumptions on their human-relations management.

Human beings are much more than numbers and machines, however, and have far more dimensions to them besides just the rational. Applying scientific attitudes to human behavior can backfire, because these reductionistic perspectives stifle creativity, ingenuity, trust, perseverance, and other gifts of human nature that directly fuel business performance and personal happiness. These essential yet tangible human qualities can flourish only if the organization itself adopts human values and lives up to them as it goes about its day-to-day business.

This notably different and more balanced approach to human relations in organizations was once described by Konosuke Matsushita, the founder of the Japanese company Matsushita Electric. Addressing an English-speaking audience, Matsushita said,

"For you, management is the art of smoothly transferring the executive ideas to the workers' hands. For us, management is the entire workforce's intellectual commitment to the service of the company…without self-imposed functional or class barriers. Only the intellects of all employees can permit a company to live with the ups and downs and the requirements of its own new environment."

What can we learn from this statement? Matsushita's message can be captured in the contrast between these two attitudes: "Tell me what you want, boss, and I'll do it," versus "Point out the direction, boss, and I'll find the best way to get there." The first attitude served corporations well during the Industrial Age, when many management "higher-ups" were thoroughly knowledgeable about the company and dictated procedures in order to disseminate their knowledge and run the place smoothly. Henry Ford perhaps best embodied the idea: He knew everything about cars—from how they ran to how they should be built and maintained—and he determined how things should be done with everyone who worked for him. In those years, when businesses were seen as clocks or machines and when life in general was simpler, this kind of narrow, specific direction of employees served industries well.

As every aspect of life has grown more complex, however, the command-and-control management style has gotten increasingly difficult to maintain. Company leaders no longer know everything about the industry they work in, and the "best" or "right" way of doing things is no longer so clear. In addition, people are expecting more challenge and stimulation from their jobs than ever before. We can understand this development in the context of Maslow's hierarchy of needs: In the Industrial Era, many people worked simply to put food on the table and a roof over their heads. As our society has grown more wealthy overall through industrialization, we've turned our attention from the more basic need to survive to the higher needs for acceptance and self-actualization (see "Maslow's Hierarchy of Needs").

Unfortunately, many senior managers fail to appreciate the impacts that the thinking, attitudes, and actions of employees at every level can have on profits, growth, efficiency, and company relationships. In their totality, these impacts have the power to either add to or detract from overall company performance. For example, a customer who has a notably pleasant or unpleasant experience in purchasing something by telephone from a mail-order company remembers the quality of that experience for a long time. A single interaction can influence whether that customer ever does business again with that company, or whether he or she refers others to the company. Time and attention devoted to conveying respect for all work and all employees, and for enhancing the quality of employees' thinking and the extent of their understanding of the company, can have a major impact on the organization's overall performance.

The High Cost of Command-and-Control

So why haven't more companies caught on to the connection between human fulfillment at work and the financial performance of organizations? To answer this question, let's first take a deeper look at the current intellectual and emotional ecology of most American businesses. Despite the trend toward "flatter" organizations, most large enterprises still in fact support outmoded bureaucracies: top-down structures in which people learn to play it safe. This kind of structure has numerous flaws that hamper the interpretation of information, distort decisions, and, over time, stunt the personality and character of managers and workers alike.

Most American corporations thus are struggling with a personal politics that puts individual interest and power-playing ahead of the enterprise's common good. In this kind of environment, "who" becomes more important than "what." Bureaucracy is used to escape personal responsibility, and complying with rules and procedures is more valued than achieving the company's intended purpose. Individuals hoard power to keep themselves up while holding others down, and aligning yourself with the right person gets more attention than the rightness of a decision. Finally, the pecking order reigns. People manipulate information through selective secrecy and spin control, and the company suffers an enormous waste of human and material assets in the form of "burn-out," inefficiency, and lost profits.

This unhappy scenario is not an indictment of individuals but of a system where "turf wars" and the desire for power, respect, and job security outweigh enlightened ideas about human relations. In this kind of leadership system, conformity is prized over individual commitment and involvement. This system seldom works well, even in organizations that seem to have established a modicum of order. To be sure, command-and-control "gets the trains running on time," but it also takes a huge toll. It creates a climate rife with office politics, kow-towing to "higher-ups," bureaucracy, and verbal gamesmanship, where human contributions such as intuition, the pursuit of truth, and the willingness to help others are devalued.

What prompts these unproductive attitudes and behaviors? The common answer is: fear of job loss. We do whatever it takes to stay on the good side of whoever controls our livelihood. I would argue, though, that there's an even more powerful fear also at work here: fear of embarrassment and of loss of respect and acceptance by one's peers. Going back to the idea of Maslow's hierarchy, nowadays many of us no longer have to worry about our actual physical survival. Instead, we have turned our attention to the higher, less tangible levels of needs—the social levels. Unfortunately, fear of any kind is the most debilitating impediment to both learning and moral development because it blocks creativity, ingenuity, and the ability to take risks, and dampens spirit and commitment—all essential qualities in any healthy, growing organization.

For example, in the 1970s the quality of American cars had reached an all-time low: The cars rusted easily, were unreliable, and required expensive and frequent maintenance. As a result, imports began taking over the U.S. automobile market. But because the people on the front line in the industry felt too afraid to speak up about the problems, even though they knew of them, the American auto industry suffered a staggering blow. If those leaders at the front line had been operating within an open, merit-based corporate culture, they might well have been able to help the industry avert the difficulties that followed. Lean manufacturing combined with Quality could have been invented in America instead of in Japan.