Guest Articles

The Fifth Foundation Forum of 2013 – Why human organisations are what we need but not what we want

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By Simon Caulkin and The Foundation

The following article is a summary of our fifth and final Forum of 2013. This year our Forums are themed around the challenge of creating growth that is truly sustainable. Held at One Alfred Place on 20 November, the evening’s subject was ‘Why human organisations are what we need but not what we want’. The three speakers were Anthony Painter, a political researcher who wrote an excellent book on the first Obama campaign, Zarine Kharas, the JustGiving CEO who re-shaped the way the nation supports charities, and Ben Pope, a prize-winning conductor whose job is to “let talented people express themselves and shape this into something beautiful”. The discussion has been summarised by Simon Caulkin, former Management Editor at the Observer.

Why human organisations are what we need but not what we want

It’s the nearest thing to a silver bullet that management has. Good people management provides a double benefit – first, companies with an engaged workforce are more productive than other companies whose employees are sulky or mutinous (organisations ranked ‘best to work for’ outperform rivals in terms of share price as well as profits) and, second, it increases the sum of human happiness. Even customers are happier. So while no one would disagree that we badly need more such organisations, why do we apparently lack the desire to make them so? Why is good management so rare? Why, in the words of one writer, are ‘today’s large business organisations – with notable exceptions – miserable places to spend our working lives [where] fear and distrust are endemic; aggressive and unpleasant behaviour is condoned; creativity and passion are suppressed’?

This was the puzzle addressed at the Foundation’s Forum on 20 November, and as often happens it became more acute (and urgent) as the debate developed. The first speaker, political researcher and writer Anthony Painter, noted that if the UK’s workers were as engaged as those of the Netherlands, our GDP would be £26bn larger. Yet we actually value people so little that we pay many of them too little to live on and a few way too much – both of which send signals that are far more powerful than the managerially correct rhetoric of ‘our greatest asset’ and the like. ‘We measure the wrong things instead of the right things’, says Painter. ‘So we under invest in the right things, pursue the wrong strategies, hire the wrong sort of people and manage them the wrong way. These are the choices we’re making – but we do have a choice’.

So why do we so often make the wrong choice? Part of the problem may be the ‘knowing-doing gap’: making a bridge between what we ‘know’ in the abstract and what we do in practice. One of the revelations of the evening, as chair Charlie Dawson pointed out in his summing up, was the power of ‘direct’ management as described (and wittily demonstrated) by conductor and composer Benjamin Pope. Business is often advised to take lessons in cooperation and team management from musical performance, but less often are we advised how to do this. A great musical performance depends on every player in the orchestra performing, not just the soloists and section leaders. ‘It’s immensely important that people are team members but also have individual creativity and that they’re allowed to express themselves,’ says Pope. ‘As CEO, or conductor, you have to make them feel included by addressing your comments to them at the back, not just to the important ones at the front. But not just with your words, with your eyes, with your gestures.’

It’s hard to replicate immediate engagement like that in a large organisation – and even in a small one if, like so many, it has forgotten the purpose for which it was created in the first place, and so the arrogance of power and bureaucracy take over. This was the point made by Zarine Kharas, founder of JustGiving, a website listed among The Times’ 50 websites it would be impossible to do without, and which, in its 14-year life, has raised £1.7bn from 13,000 charities.

As with the orchestra example, JustGiving aims to get everyone to contribute to the developing harmony through a combination of clear purpose, leadership, trust and careful selection – all the attributes emphasized in the engagement literature, in fact; or to put it another way, making Painter’s right choices. None of these is easy. One of the enduring myths is that good people management is about being nice and fluffy: on the contrary, getting the best out of people involves tough choices at every stage. Getting the right person can take a year. Purpose for JustGiving, a for-profit company, is to benefit all its stakeholders, including society as a whole – ‘and it’s a very, very difficult act. We have an enquiry led culture, so it’s tough’, says Kharas. ‘We didn’t try to make things comfortable. Decisions are made on facts not on egos. We argue endlessly, but all these things can only happen when you trust each other’.

Trust is therefore primordial. JustGiving doesn’t do rules in the usual sense: ‘Above everything else we’ve thrown away the rule book – we simply trust everyone to do the right thing. For example, we trust people to record their own holiday and expenses, but it comes out of what the team’s agreed budget is’, Kharas says. The ‘right thing’ consists of everyone acting as co-owner and leader. ‘Every employee assumes responsibility and ownership for what gets done according to one overriding principle: decency. George Orwell said decency is “an intuitive sense of morality that exists amongst the common people”. It’s a very simple and powerful idea, and, believe me, it’s really, really difficult to make decisions about your bottom line whilst putting decency first’.

Considerations like this begin to explain why the ‘right’ choices aren’t necessarily straightforward. Under probing, other factors emerged. One is the temptation to devolve responsibility for hard choices to rules and regulations. As Kharas noted, the more things go wrong, the greater the inclination to reach for the rule book. But while rules might prevent the last crisis happening again they won’t stop the next one (see Sarbanes-Oxley and the banks); worse, the more emphasis on the rules, the more people come to rely on them and the less they can see right from wrong, as in the parliamentary expenses affair. So having more rules is not a better solution. Dawson muses: ‘The really difficult and brave thing to do would be to say, it can’t never happen again; it might happen again, but the way to minimise the chances are to carry on acting with decency, and to really think about and discuss what this means so it is understood, front of mind and believed.’

A more extreme variant is to remove the troublesome human element altogether, by automating decision-making in computer software. Painter notes that there is a strong argument for ‘putting as much of the mechanistic stuff in machines as possible’, leaving humans to do what they are best at, i.e. empathising, relating and creating. Unfortunately, the tendency is to do the reverse, making humans responsible for routine and putting computers in charge of decision-making. This is dehumanising and perverse, leading at worst to travesties such as the discredited fitness-for-work assessments and, in customer service, to the horrors of ‘synthetic personalisation’ (call centre agents inserting your first name into a scripted exchange, for example), which simply weaken the will to live in both customers and employees. (Pope: ‘Can I just say one sentence about this, which is, “Unexpected item in bagging area”’.)

In his book on employee-centred management, ‘Becoming a Better Boss’, London Business School’s Julian Birkinshaw suggests that good people management is difficult because, at least in large organisations, it is an ‘unnatural act’. The onward march of technology, the relentless drive for corporate efficiency and burgeoning rule books don’t seem to make it easier. You can see what he means. Yet it could also be argued the other way round. As Painter notes, dealing with human nature is what we do every day: ‘If we manage it in our personal lives we can manage it in our working lives as well. If people are behaving in ways which are negative and harmful to the organisation and harmful to us, then we have to find ways of managing that out, helping them to adapt their behaviour or looking for people who are better aligned with the ways in which we expect people to behave.’ In this perspective, asserting the normality of humanity – expecting decency, trust and honesty from ourselves and others, and demonstrating it directly – may be the most important thing we can do. That, and, perhaps, listening to, and watching, more live music. ‘By using your gestures to include people,’ says Pope, ‘actually literally moving towards them, this is how you can bring all these disparate individuals to become one, to become something that can move people to tears, in a good way.’

The Foundation’s view

Three points struck our Partner – Charlie Dawson – about what was covered:

1. I liked the way Ben, as a conductor, described interacting with his entire organisation right in front of him, and how he communicated with every part of it, with everyone involved, without needing to say much either. The view we often have of our organisation is conceptual, with only a few people visible at any one time and they’ve usually got their heads down and are busy. Even if people do get together in large numbers we tend to speak at them, then ask them to feed back in stage managed interactions. Ben’s world is a whole lot more human and a great metaphor to keep in mind.

2. Anthony brought to life the difference between a perfect machine-made coffee and one with some human interaction sprinkled on top. It reminded me of something I learned years ago that helped inspire one of the ways we work with our clients. As humans we’re good at abstraction. For example, in the developed world we share an understanding that a red light means stop, something that people who had never seen cars or roads wouldn’t understand. This tricks us into believing that we understand complicated areas, such as customers’ true motivations for buying things, by looking at PowerPoint charts prepared by someone who went and spoke to them on our behalf. But charts don’t ever really give us a true view of our world, and if we don’t like them we tend to argue or ignore them. We realised we needed to get leaders out of their offices, meeting customers themselves. We did, and suddenly they responded like the human being they were, interpreting the vast flow of rich data about the other person’s feelings, suspicions, hopes and doubts intuitively, accurately and as a result in ways that they ‘got’, believed and acted on.

3. Zarine told us about the world of JustGiving, where one of the central principles guiding everyone is ‘decency’. Such a small and polite sounding word from a distance, but so powerful when you consider the light it shines on what you choose to do, or not do, with it in mind. She described an MP’s expenses defence – ‘I broke no rules’ – judged against a decency yardstick, and it’s obvious what the right thing to do was. At a lunch we held earlier the same week, Chris Patten was asked what it took for a leader to create the conditions for an organisation to succeed in the long term, where doing the right thing was expected by all. He criticised his own answer as obvious and dull, but it came down to belief in who you are and the values you, and by extension the organisation you serve, will live by, unconditionally. It needs courage because you have to be prepared to walk away if the values you believe in are not those you find the people you work with acting by. Being brave is asking a simple question about decency, not creating another rule that gives the illusion of control.

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