Developing a good business culture is like making fine wine

I recently read a fantastic interview with Management consultant, Ralph Sink. He has been a lifelong believer in high-performance systems, also known as self-organizing teams and participative management. These require employees to take ownership of their jobs, to collaborate with one another to establish control over their work, to be innovative, and to deliver results — to maintain accountability for the business and be treated with corresponding respect, regardless of their level within the organizational hierarchy.

You can read the full interview here at Strategy+Business.

Here are some of the gems from the interview:

• On attempts to create attractive corporate cultures without all the hard work: It’s like making wine. Managers who operate by metrics, paperwork, and numbers say, “OK, we’ve analyzed wine. It has sugar in it. It has pulp. It has yeast. It has grapes.” So, they dump those ingredients in a pot, stir it, drink it, and say, “but this doesn’t taste like wine,” and wonder why. It’s because the wine had to go through a process. They may have had the components right, but they overlooked the principles for transforming grapes and water into wine. These managers will look at our approach and say, “Oh, I see what this is. You operate with 20 percent fewer people. You eliminate the supervisors, and everybody is self-managed.” So without any development process, principles, or leadership, they go in and cut head counts. And when they end up with a catastrophe, they say, “This approach didn’t work.” From their perspective, they analyzed the pot and put the elements in and stirred it up, so when it failed, they weren’t to blame.

• Many of the young people I’ve spoken to who are being hired straight out of school actually come into corporations expecting participative management. The innate desire is there. Yet we’ve programmed managers to say, “Implement these rules. Follow these procedures.” People in organizations no longer think freely for themselves. They’re in survival mode, and some of them are doing pretty well that way; they are earning big bonuses. Everybody is pushing to get short-term financial results.
• On developing the right ype of leaders: Schools focus on developing functional capability. They don’t develop character and state of being, and they don’t develop the creativity of individuals. Organizational effectiveness and development should be a discipline, but instead we’ve made it a gimmick. I think we should teach people to be systemic, holistic thinkers, and to manage people’s energy.
• Everybody thinks that they’re a visionary, but few are. We’ve educated and programmed people to analyze things, to break them down into their parts, and so forth, but what about the ability to see the big picture? Successful leaders, like Apple’s Steve Jobs and Starbucks’s Howard Schultz, have a vision. To create one, management has to ask itself, Do we have vitality in the organization? Do we have spirit? What’s missing? What do we want to be as an organization, and who do we want to be as a group of people?
• When the CEO of Merrill Lynch loses billions of dollars and then leaves the company with a $161 million severance payout, it’s fairly sad. He should have been fired for his incompetence and not given a dime. People at all levels, including those at the very top, should be paid based on performance and held accountable, and they should be fired for underperformance.
• I would tell employees at orientation: “We’ve got a strange company here. You have to progress, or you’re out. You will be held accountable. You’ll have ownership. You’ll become a businessperson and grow. If you don’t take care of the business, the people around you, and your safety, you’ll be fired.” We fired more people for not progressing than for almost any other reason…. In a high-performance system, as a manager, you have to see your employees as professionals and demand that they perform accordingly.

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