27 November 2015

Why Should Anyone Work Here?


Why Should Anyone Work Here? Rob Goffee and Gareth Jones, Harvard Business Review Press, RRP £20

One of the most influential business books of the 20th century was William Whyte’s The Organisation Man. A sociologist, Whyte would go into the vast sprawling megacorps that characterised post-war American capitalism and peer into the souls of its foot soldiers. What he saw was not edifying but would go on to inspire a number of books, movies and TV shows that portrayed corporate life, such as Mad Men, American Psycho, David Foster Wallace’s The Pale King and BBC sitcom The Office.

The bastardised child of Robert Sutcliffe’s conveyor belt and Henry Ford’s interchangable part was, for a large part of the postwar era, a form of conformism that was hitherto alien to the individualist spirit of America, and this led to some bizarre consequences. Mass production led to mass consumption. Mass consumption became the dominant metric of success in an ideologically meritocratic society that had no history of feudalism, as Alexis de Tocqueville had warned.

The tyranny of the majority exercised its power not through the ballot box but through the cultural mind. To paraphrase George Orwell, banks were the arbiters of society, holding in one hand the keys to the workhouse and in the other a cornucopia, “out of which would pour portable radios, life insurance policies, false teeth, aspirins, French letters and concrete garden rollers”. It’s not so much that consumerism is a bad thing – it isn’t – but that consumerism filled a vacuum created by societies that consisted of boring Kafkaesque corporations and families of downbeat housewives and children largely condemned to the same fate.

Things are changing. Banks are still very important and good material conditions are too. Corporations, though, are not quite the man-made iron cages that Max Weber portrayed, because employees today are starting to demand entirely different working arrangements. By 2020, 50% of the workforce will be those who belong to Generation Y, born between the 1980s and early 2000s, and these people have developed radically different attitudes to what work should look like. Their economy is increasingly based on innovation, knowledge and soft interpersonal skills requiring emotional intelligence. Many will never work in an organisation with more than 50 staff.

In Why Should Anyone Work Here?, Rob Goffee and Gareth Jones have set out to define the values that make for great organisations, and they may surprise executives who have earned their stripes in a previous age. To Goffee and Jones, the ideal formula consists of five key features that spell the acronym DREAMS: Difference, Radical honesty, Extra value, Authenticity, Meaning and Simple rules. There are questionnaires for each segment that help you score your organisation.

Promoting difference, say the authors, is more than diversity based on socioeconomic factors; it’s all about the encouraging a clash of ideas, and that involves bringing together people who have different ways of thinking about the world and letting them be themselves. It is the very opposite of groupthink, a term coined by William Whyte in the 1950s. Passion, conflict and heated exchange were how Island Records, which now has a history of successfully cross-fertilising genres, managed to sign Bob Marley, U2 and PJ Harvey.

Radical honesty is about clear communication internally and externally, about including staff and being accountable to stakeholders. Knowledge intensive organisations need flatter structures to boost efficiency. Information is power, and by distributing more broadly across firms, employees win both greater influence and responsibility over their work.  Greater transparency fuelled by social media means the age of spin is over.

The authors make a compelling case for honesty when something goes wrong, comparing the proactive way Heineken handled a dog-fighting scandal in Mongolia in 2012 for which it was wrongly implicated as sponsor, with how BP’s Tony Hayward tried to tone down and brush off the 2010 oil spill in the Gulf of Mexico, which lasted over two months.

Adding extra value means eschewing Taylorist and Marxist views of capitalism to see that investing in employees benefits everyone if it is done properly. Many doubted whether McDonalds or Starbucks could or even should be educating their staff in management courses, but they are paying dividends by boosting productivity and loyalty.

Authenticity is about having a clear sense of identity, like insurance company New York Life, which withstood the temptations that produced the 2007 financial crisis by sticking to its values. The leadership was strong enough in purpose not to go into the subprime market despite considerable pressure from some brokers. The company was there to support the recent widow.

Meaning is having and rallying around a cause that fulfills some kind of human need. Young graduates, particularly in a buoyant jobs market, are increasingly looking beyond economic security when working want to work for companies they want to work for. Companies that see past their bottom line and deliver value to wider society through pro-bono schemes are gaining competitive advantage over those that don’t.

Creating simple rules is the hardest and most important ingredient. Balzac described bureaucracies as “giant power wielded by pygmies,” which dehumanise, stifle creativity under the weight of red tape and lead to inertia. We learn of how it took HP seven months and 100 people in nine committees to come up with just a name for a new piece of software. Compare that to Netflix which has a system of open trust with employees. Workers are expected to “do the right thing” and “Act in Netflix’s best interests”, which is why no one records how many days in holiday they take or how much they charge on expenses.

Goffee and Jones admit there are conflicts between these objectives and the authors do not claim to offer an exact recipe for transforming your organisation, and they admit that achieving the full DREAM may not be possible in some cases. Having an organisational structure that is too flat and where there is too much autonomy can slowdown the process of decision making, undermine the sense of shared purpose, weaken company cohesion and make it harder to impose even simple rules. There are trade-offs that have to be negotiated, and it seems that the goal is about achieving a better balance among the six key factors that Goffee and Jones suggest are the foundations of great organisations. New organisations that have yet to develop a dominant culture have an advantage here.

So why should anyone work in your organisation? Should you even be working where you are? Buy the book, take the tests and find out.

Zac Tate is Deputy Editor of CapX