There’s a cottage industry called “coaching” that’s sprung up over the last few decades (it’s quite a large cottage, but still).

On the surface there’s nothing wrong with this.

But I have come to believe that the fact this industry exists at all is an indication of a dirty and not-so-little business secret…

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P.S. We’ve got the beginnings of a great dialogue in the comments section — come and add your thoughts!

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Today, I have one question I’d like to ask you.

It’s just going to take a bit of setup to get there.

Recently I’ve begun doing some research into the works of Max Weber. Though you may not know his name, he is widely considered to be “one of the three principal architects of modern social science” (to quote Wikipedia), along with Karl Marx and Émile Durkheim.

What’s most interesting to me about Weber’s work is his focus on bureaucracy. While this certainly isn’t a sexy topic, it’s pretty safe to say that it’s a subject which affects both me and you on a daily basis. From classic examples like the DMV (*collective sigh of exasperation*), to elected or campaigning politicians (*collective eye roll*), to the TSA line at the airport (*collective groan*) to the dreaded yearly performance review at work (*one more sigh*), we are all regular victims of these systems.

This is where our friend Max comes in. He says there are three ways to organize the power/authority in a society:

1. Charismatic,
2. Traditional , and
3. Legal-Rational.

They’re pretty much exactly what you think. Charismatic leaders get to lead because they are seen as charismatic or gifted. Traditional leaders are put in place because of a cultural tradition — think monarchies. Legal-Rational leaders are seen as authorities because the legal/bureaucratic system in place gives them the power and permission to do so. (For a bit more on these levels go here.) Weber saw these stages as a hierarchy of sorts, a kind of “tribe evolution”– an inevitable social growth pattern. Cultures that evolve will naturally advance from a Charismatic model towards a Legal-Rational one.

He also foresaw the negative effects of this growth: something he called “the shell as hard as steel.” A Legal-Rational model of power naturally creates something called bureaucracy, which in turn delivers an oligarchy where a few rule over the many. As this happens, it systematically generates a confining, dehumanizing society. (Sound like anything else I write about?) Also translated as “the iron cage,” this is the inescapable result of a Legal-Rational system.*

So, at long last, here’s the question:

What if there’s a #4…?

What if there’s something that’s more evolved than Legal-Rational?

I think there is, and I also think it’s on the way.

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*Read more about the “iron cage” here. It’s worth your time.

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There is a natural tension between the proponents of “experience” and those who tout “innovation.”

Experience sees the value in leveraging wisdom gained through years of learning and doesn’t want to repeat past mistakes.

Innovation recognizes the world isn’t the same as it used to be and therefore will require fresh, new solutions.

These things often feel like they are mutually exclusive, particularly in our companies.* Organizations are often good at one at the cost of the other — and generally our businesses tilt hard in favor of experience. Almost everything we measure (and measurement is a big freakin’ deal) slants the scales this direction, from our hiring requirements (“Must have… 9 years!“) to financial reports which compare to years past.

The problem is that experience just doesn’t mean as much as it used to.

In a world that moves as quickly as ours, we shouldn’t be afraid of the “next thing,” the incremental thing. We should be afraid of the other thing — the thing which completely disrupts the market and renders our product or service irrelevant.

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*Of course, the thoughtful leader isn’t sucked into this false dichotomy, but sees value in both of these perspectives. They recognize that it’s not either/or, but both/and. The hard part is in resolving the tension. And that, of course, is a big part of why leaders make more money.

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Awhile back I wrote that in order to foster a work revolution, our organizational “departments” need to die and something new needs to take their place: something I call Value Groups.

The quick version of this idea is that there are five (and only five) categories in which a person can provide value for the organization/company/tribe they are a part of:

1. They can build meaningful relationships. [Community Group]
2. They can build amazing, remarkable stuff. [Creative Group]
3. They can design an engaging place to work. [Culture Group]
4. They can design ways to fund the right projects. [Currency Group]
5. They can coordinate the efforts of the first four groups. [Conductor]

(If you’d want to learn about this in more detail, just mosey on over here.)

There are many interesting things about designing an organization in this way, but one that we haven’t yet talked about is that it leverages the natural passions of people — something that our organizations now are absolutely dreadful at.

We all have certain things that energize us, and what these things are varies from person to person. But what we’ve found through our work at Strengths Doctors is that by using specific assessments, we can get our finger on the pulse of what gives someone energy; i.e., we can easily identify what each person is passionate about.

Now, most organizations have to essentially stop there because their organizational structure is designed around tasks or functions, not passion. They can encourage their people to try to find ways to do activities they enjoy in their current jobs, but as for actually creating spaces to leverage that energy… not so much.

But if we can redesign the structure (at a team or whole-company level), this is exactly the point where it gets really exciting — because we can use that knowledge about passion to plug people into Value Groups.

When we do this, we get a tremendous win-win-win-win (yes, four wins):

1. The company wins because people who are passionate about what they’re doing on the job do MUCH better work.
2. The employees win because they get to do things at work that energize them.
3. The customers and vendors win because they get to interact with people who actually like their jobs.
4. The society at large wins because the organization is more likely to produce something that actually matters.

Interestingly, but not surprisingly, what people are most passionate about lines up exactly with how they can create the most value for the organization. We just need to get them into that place — and now we know how.

So the real question is… what are we waiting for?

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The things we measure are the things that actually matter.

This might seem to go in the “Duh, obvious!” category at first glance. But this phenomenon goes much deeper than we initially think.

Example: In our companies, we want our customer service folks to treat customers like gold, right? That kind of behavior is how we keep customers coming back and how we encourage them to spend more, etc.

However, this desire for excellent service is usually counteracted by the things we actually measure. Most companies don’t have “wowing customers” as a metric. Instead, we measure our customer service representatives on how little time they can spend with customers. When we do this, no amount of “The Customer Comes First” rhetoric will ever overcome that measurement. It can’t – because it’s not what we’re measuring. No matter how much we insist that’s what we want, it can only ever be lip service; our reps are forever confined to work within the limits of their metrics.

This is how it works in every walk of life, by the way.

In sports, players play to the metrics defined for them. (For more on this, read Andy Stefanovich’s fantastic book Look At More.) Companies adhere to environmental regulations set for them by the federal government. Doctors conform to the best practices as defined by the professional organizations in their field.

We are built (or at least heavily conditioned) to color inside the lines.

Now, if we think with a victim mentality, this reality is quite depressing. But if we believe that we create the future, it’s rather exciting.

Why?

As a leader, you’re the one drawing the lines. 

(Lesson: draw your measurements carefully.)

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UPDATE 11/15/11: This phenomenon also affects nations and technology. Kind of makes one wonder what’s more important than determining the things we are going to measure, doesn’t it?

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In my mission to foster a work revolution, I operate on a pretty simple premise:

If humans insist on being part of work tribes (which we always will), we need to make our tribes better.*

Because right now, most of our organizations suck.

I mean this literally — they suck the life out of us and the resources from the planet.

To stop this destructive pattern, we need to understand that there are two sides to a “business tribe:” a me side and a we side. Right now in our companies, we focus almost all of our organizational change efforts on the “me” component. This includes coaching, training, workshops, learning events, etc. These types of programs are all designed to help an individual get better, more enlightened, etc.

I’m a huge fan of personal development (clearly; it’s a big part of what I get paid to do). But it can’t stop there. And right now it does.

Here’s the problem: all the personal development in the world can’t fix a problem that lives in the system. It’s like treating cancer with a band-aid.

We have to get to the “we” side.

This is the “group” component. It’s about company culture and organizational structure. It is the “tribe” side of work. These are the rules that govern how we act when we work together, and each organization is a little different (which is good). Unfortunately, most of our companies have similar bad habits around how we organize (which is bad).

If we insist on working together, how can we organize our groups in ways that work with the new world, instead of against it?

I’ll be making the full case for this idea in my upcoming book, but a huge part of our challenge stems from the fact that most of our org charts are built around people performing a specific function or task. This is a problem, because in reality our work is much more complex and intelligent and nuanced and creative than just performing a list of duties.

Can everything you do for your company be summed up in a “job description?”

If it can be put in list form, do you want it to be!? How boring is that?

(I think you’re better and smarter and more interesting than a robot who performs a list of droning tasks, personally.)

The entire world is being rewired into communities centered around passion, which, not coincidentally, also lines up perfectly with how people create value for their organization. The great opportunity for business lies in learning to leverage the passions of the tribes that surround us.

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*For clarification, when I say “tribe” in this context I mean any kind of organization — for-profit to non-profit, small to large, startup to established, and anywhere in between.

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“Branding” in the 21st Century isn’t about marketing.

It’s about reality.

And it has almost everything to do with people.

It’s about who your people are.
It’s about how they treat each other.
It’s about how they’re treated by the leadership.
It’s about how they treat your customers (every single interaction, all day long.)

We used to be able to “fake it,” right? All we needed was a great publicist and some connections to mass media. But none of that matters anymore, because in the economy of tomorrow news comes from everywhere, all sides, all the time.

If we’ve learned anything from the seemingly endless business scandals of the last decade, it should be this: what’s hidden won’t stay that way.

Because of this, the “new brand” is all about authenticity: truly doing what you say you will. It’s about integrity, honesty, and transparency.

In the new economy, brands must be grounded in reality (what they really are) AND paint a picture that people like (what they could be) in order to succeed.

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Edwin Catmull is a thin man in his mid-sixties, with a Ph.D., wire-rim glasses, and graying beard. In interviews he comes across as soft-spoken, almost pensive, although one can read years of wisdom behind a kind expression. He is earnest and straightforward, talks patiently, and, in most every way, resembles your favorite college professor.

But Dr. Catmull is not a professor.

He is the President of two of the most powerful and well-respected companies in the world: Disney Animation Studios and Pixar, the company who literally created computer-generated animation.

On September 1, 2008, the Harvard Business Review published an article written by Dr. Catmull entitled How Pixar Fosters Collective Creativity. In this article, Catmull states some seemingly backward approaches to bringing in new talent to an organization:

“Successful organizations face two challenges when bringing in new people with fresh perspectives. One is well-known—the not-invented-here syndrome. The other—the awe-of-the-institution syndrome (an issue with young new hires)—is often overlooked. 

The bigger issue for us has been getting young new hires to have the confidence to speak up. To try to remedy this, I make it a practice to speak at the orientation sessions for new hires, where I talk about the mistakes we’ve made and the lessons we’ve learned. My intent is to persuade them that we haven’t gotten it all figured out and that we want everyone to question why we’re doing something that doesn’t seem to make sense to them. We do not want people to assume that because we are successful, everything we do is right.”

How many companies do you know who practice this philosophy? Where the President of the company, first of all, shows up at new employee orientations? And then he doesn’t just make an appearance or sit in the back, but stands up and tells stories about company screw-ups, to help reinforce a culture that respects ALL ideas, even if they come from a first-day-on-the-job newbie?

The list of organizations coming to my mind isn’t very long.

I watched the documentary film The Pixar Story this weekend (and highly recommend it). As you’re surely aware, there’s a certain magic about Pixar. What you may not know is that most of the fairy dust resides within their unique culture—and this is something they’ve fought very hard to protect.

There are so many things we can learn from an organization like Pixar, but for today that’s all I want to say: great company culture may emerge through serendipity, but it doesn’t stay great by accident. People—real people who care enough to put some skin in the game—have to get involved, stand up, get a little dirty. People like Ed need to do some “crazy” things.

Don’t kid yourself that a great workplace “just happens.” Like growing a garden, it requires a lot of work and a bit of mess. It takes time and effort—and this means having people who have enough time built in to their jobs to actually focus on it. There’s simply no other way to build an amazing work environment.

How many Dr. Catmull’s does your company have?

Are you one?

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I’ve been pretty clear that I think performance reviews — as we have them built now — are a terrible idea. Everyone hates them with the passion of a thousand suns, and they add almost zero value to the organization, particularly from a proactive standpoint. (I understand they are sometimes used as a defense / covering one’s ass / paper trail. While this does add value in a twisted kind of way, it’s just not very noble.)

The goal here isn’t to destroy a touchpoint, however. We don’t want to leave a performance review shaped-hole.

That time can be made very useful… if we reclaim that space.

First, we must get rid of the weakness-focused mentality that drives reviews now. Then, we can repurpose that conversation time and expand it into something that is proactive, adds real value, and — gasp! — can be an enjoyable experience for both sides.

To that end, here are two suggestions to start making your review process better:

First, switch the direction.

Instead of being the one evaluating, let your organization evaluate you.

This is called measuring engagement, and it’s one of the most important things an organization can do. (By the way, my partners and I have a great way to measure this; please get in touch if we can help you.)

Most of the way we work isn’t taught, it’s caught. Model the behavior that’s desired, and it will trickle down. (For more on this point and why it’s so essential, please check out a great post from Bruce Johnson.)

Second, pretend you’re a coach.

Imagine you are coaching a basketball team. On the first day, you come in to welcome the players. You then let them go about their business (practicing, or whatever it is teams do) and check back in a year later to give them their performance review — being sure to inform them of all the things they’ve been doing wrong the whole time.

Terrible idea, right?

Do I really need to explain the analogy here?

It would be ludicrous to coach this way. Why do we think this method would create great performance in our organizations?

Engagement is about creating space for regular conversations — they don’t necessarily need to be long, drawn-out, epic talks. Just ways to check in. After a play, during a play, tips, tricks, constant feedback, continual improvement.

If you are a coach, not a “manager,” it’s the most natural behavior in the world.

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Over a decade ago, two authors by the names of Marcus Buckingham and Don Clifton wrote an amazing book called Now, Discover Your Strengths.

At the very end of this book, hidden behind the database of strengths themes, there is a small section devoted to providing structural ideas for how to design a better organization. In this chapter, the authors mention something I’ve never forgotten—the idea of “building more ladders.”

Right now in our companies, we have essentially one ladder. One path up.

While we inherently understand that this doesn’t make any sense—not everyone wants to be a CEO—we persist in structuring our companies like everyone does.

Much better, I think, to design an organizational structure that provides many ladders.

In fact, what’s stopping us from having as many ladders as we need?

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