Sibling Rivalry

“The biggest problem I have,” Andre complained, “is getting my people to work together. I want them to be like a family. I want them to feel like they belong to a tribe, you know, an extended family.”

“Oh, really,” I looked surprised. “It is a noble feeling to impart to a group of people, to get them to feel like they are part of something bigger than themselves. So, what seems to be the problem in getting them to work together?”

“There always seems to be petty bickering between the personalities. It’s not overt passive-aggressive behavior, but the conversations that end up in my office are petty transgressions. Someone borrowed a stapler and didn’t return it. Someone took a snack out of the company refrigerator. Someone had a bright idea that the group ignored or made fun of. Someone got passed over on a new project. Someone got passed over for a promotion.”

“So, what do you think the problem is?” I asked.

“I think it’s the culture of the group,” Andre nodded.

“And, who sets the culture?” I prompted.

“Ultimately, I set the culture,” he thought out loud. “Funny, I want the group to feel like a family, an extended family, but I end up with sibling rivalry.”

What is Work?

“Max, I know how you feel about your team’s attitude toward work. You believe they only show up for the paycheck. You believe, as a manager, you have to incentivise them above their normal pay, with a bonus or spiff to get them to pay attention, or otherwise engage in discretionary effort. Your belief is in line with many employee studies that say most are NOT engaged with their work. So, let’s not talk about your team. Let’s talk about you.”

“Alright, I’m game. But, understand that I am here for the money, too,” Max clarified.

“Yes, you are right, we do have to pay competitive. More importantly, we have to get money off the table. As long as people focus on money, or, because of their circumstance, have to focus on money, employee engagement will be fleeting, at best.”

“Okay, but understand that I am still here for the money.”

“Are you really? I could show you a number of ways that you could make a great deal more money than you are making right, now,” I teased.

“I am all ears,” Max replied.

“If you were willing to sell marijuana, which is now legal in some states, you would make more money than you are currently making.” I stopped to gauge his reaction to this unusual suggestion.

“Yeah, but.”

“But, what?” I interrupted. “You see, it’s not all about the money. People, even you, want work where you can make a contribution to something larger than you. You want work where you can bring your full capability, spread your wings AND receive fair compensation for that work. You want work where your contribution is recognized as important, work that does NOT need a carrot-or-stick for you to get on with that work.”

Max was quiet. He was thinking.

“Max, you are the manager of your team. You get to design that team, select that team and create the environment that team works in. As the manager, you DECIDE the culture of that team. What will be your foundation? Will it be built around spiffs, or accomplishment? I have never known a person to be more competent in their role because they were paid a bonus.”

Built on a Dollar More?

“Now, you have me confused,” Max protested. “Yes, the bonus becomes an entitlement, so it loses its power to motivate.”

“Is it possible,” I asked, “that the bonus never had the power to motivate in the first place? Let’s talk about you. You said, that sometimes you enjoy work. Why do you work?”

“I told you. I get a sense of accomplishment. Some of the work, I actually enjoy.”

“Like what?”

“Sometimes, I get someone on the crew, it’s their first job. They become part of a team, working together and I can see a sense of pride on their face. As a manager, I enjoy that. I get my own sense of accomplishment.”

“And, their first paycheck?” I prompted.

“Yes, there is a smile on their face.”

“So, compensation is important, but if that is all there is, your team members will jump to another company for an extra dollar an hour. So, how do you build your system? How do you, as a manager, build your culture? Do you build your culture around a bonus, or do you build it around accomplishment? You only get what you focus on.”

What Drives Behavior?

“So, what am I to do?” Max challenged. “I have to give them a bonus. The work is routine, in some cases, monotonous. I mean, I know, at my level, it is easier to get satisfaction from my work, not total satisfaction, but there are times when I actually enjoy work. I get a sense of accomplishment. But, my team? I can only imagine they come to work for the money. If it weren’t for the money, they would find something else to do. The only way I can get their attention is with a results-based financial incentive.”

“Tell me more,” I prompted.

“Well, it is pretty apparent. All you have to do is watch what happens. I give my team a bonus for hitting a certain production number and it is amazing how accurately they hit that number.”

“So, tell me, their base salary? What is that for?” I wanted to know.

“Base salary is just so they will show up. If I want them to hit a goal, I have to sweeten the pot. Give them a little kicker. It is just the way it is,” Max insisted.

“I want to understand. As the manager, you create the system, the environment in which people work. The culture you have created is that, for their base salary, your team just has to show up, they don’t really have to do anything special. They can survive on your team by doing less than their best. And that if you, as the manager, truly need anything specific done, a target, a goal, the only way you can motivate them is with a spiff?”

Max nodded. “That’s pretty much it.”

“So, you hold back a little money, and if, and only if, they meet the goal, they get a bonus?”

“Well, yes, that’s the way it’s supposed to work. But, of course, now everyone expects the bonus, kind of like they are entitled to it. So, sometimes, I have to strongly remind them that the bonus is at risk. That’s what we talk about at the team meeting. If we don’t hit the goal, the team doesn’t get its bonus.”

“So, the bonus doesn’t truly drive behavior. You have to remind them that the bonus drives behavior?”

Why Would They Skip a Step?

“What do you mean, I see things that my team cannot see? If they would just look, they would see it, too,” Max pushed back.

“Max, you are a manager. You are responsible for creating all the systems that people follow. You know more about how things work and how things go wrong. Give me a short list of things you see, that your team doesn’t see,” I asked.

“Short list?

  • Sometimes, we get parts in from our vendor that have a slight defect. If we use that part in our assembly, when we get to the end, the unit will fail a pressure test.
  • If we skip the pressure test, the units get boxed and sent to customers, who install defective units. Their first call is to the salesperson, who gets an earful from the customer.
  • If the salesperson gets three customer phone calls complaining about defective units, the salesperson loses confidence in our ability to make a quality product. He stops selling.

Should I go on?” Max quizzed.

“Why can’t your production people see that?” I prompted.

“I guess they can’t put the dots together. From the time we get that first defective part, to the time the customer complains could be three months time. And when the customer complains, we still have to track down the problem, then reference our production codes to find out when the units were actually produced. It might take another week just to track down the problem. There is too much disconnection for my production team to follow. They just know they get yelled at for skipping a parts-inspection and a pressure test.”

“And, why would they skip a parts-inspection?” I wanted to know.

“Funny, the team was actually proud of their assembled output that week. We were in a bind for a large order. It meant overtime and a team bonus for 50 extra production units that week,” Max lamented.

“So, let me understand. You design all the systems out here, including the bonus system for exceeding production quotas in a shorter period of time? And you wonder why the team skips steps, to get their bonus?”

If I Only Had People Who Were Smarter

“We have plenty of people to do the work,” Max explained. “I have written all the steps for them to follow, a nice flow chart as a visual on the cover of the binder. As the projects move through, I have Gant charts to help me understand the status, so I can explain to the customer.”

“It all sounds very organized. So what’s the problem?” I asked.

“The problem is, the production team doesn’t follow the work instructions. I walked by a work cell yesterday and the work was clearly being done out of sequence. I suddenly knew why we were having QC problems on some of the output.”

“And?” I pressed.

“I asked them why they were doing it that way, when we had just completed a training program on the correct sequence. Do you believe this? They told me the training program was wrong, that they had been doing it their way for a long time and they didn’t see the need to change. Besides, it was easier to do it their way.”

“And they had just been through training?” I wanted to know.

“Well, yes, it wasn’t like a class. I spent ten minutes with the four of them. It was really common sense. I don’t see why they didn’t get it. If I had smarter production people, they would have figured it out on their own,” Max was clearly frustrated.

“You see something they don’t see?”

“Yes. And how.”

“Did you ever think, you see something they cannot see?”

Is Your Infrastructure Ready to Grow?

“You want to grow bigger? What do you need to focus on? Because I don’t think you are ready.” I asked.

The group looked at each other, not sure, maybe some ideas rattling around in their heads, but no one wanted to speak first.

“Before you think about getting bigger,” I continued, “what is your biggest challenge, right now? Look, you called me in here. You all look tired, worn out. You have been working way past 5p every day. And now, you have an opportunity to take a risk, which will grow your company 30 percent over the next 12 months. What is your biggest challenge, right now? What has to get fixed before you even think about taking this next risk?”

“We feel like we are fighting too many fires, right now,” Marcus explained. “And this new project will fail, if we don’t get some of these fires under control.”

“Why are these fires happening?”

“Our team members run into problems they are not capable of solving. We tried to empower them, but that still doesn’t mean they have the capability to make the right decisions. So we are down in the trenches with them, helping to put out the fire.”

“Is it possible, that you don’t have a clear understanding of the level of work in those roles? And that you have placed people in those roles who do NOT have the capability to solve the problems and make the decisions that go with the role?”

“Isn’t that what I just said?” Marcus replied.

“You described the people you placed in the role, but the root cause of the underperformance is that you, as the manager, don’t clearly understand the level of work in those roles. The biggest mistake most organizations make is underestimating the level of work in the role. Without identifying the level of work in the role, most organizations hire someone without the necessary capability. And then wonder why the fires begin to flare.”

Why We Have Supervisors

“Yes,” Samuel appeared a bit agitated. “But, you are dealing with the rank and file. You are sitting in a pretty nice boardroom, Catherine. You have a nice salary. I know you and I may have bouts of frustration with our work, but at the end of the day, we have it pretty good. But, the rank and file, that is another question. In their jobs, they must all be frustrated. I mean, it is pretty lackluster work. That’s why we have to have supervisors, to keep them in line, to make sure they don’t sit around and play on their smartphones all day.”

Catherine’s blood pressure began to rise. Her face flushed. “Mr. Pierce, it is coming clear to me why Outbound Air, as a small upstart airline, got into so much trouble after your company bought it. It appears, I have as much work to do with the board of directors as I do with the team.”

“Catherine, I am all ears,” Samuel responded. “But I must tell you, we have a large investment in this airline, we have poured in a lot of capital to introduce jet service to the fleet. Your intentions with the company must be grounded in a solid return on that investment.”

“I appreciate your reminder of the value of the shareholders who bear the risk. And that risk is shared by our workforce. Each team member comes to work every day with the full intention of doing their best. They want work that gives them the opportunity to use their full potential. They want to spread their wings and receive fair compensation for that work. They want to use their brain, to exercise judgement in making decisions to reach a goal. They have goals, just like you have goals. They have a need, not only to bring value to their own lives, but to bring value to the lives of the people who work around them. As the chairman of the board, if you do not recognize that, my work as CEO is already doomed. All crumbs lead to the top.”

This is the beginning of the sequel to Outbound Air. Find out how Catherine got here.

Parlor Games at Best

Samuel Pierce felt it was his duty, as Chairman of the Board, to make sure the new CEO was grounded in reality. “Catherine, I just want to make sure that you are up to the challenges you face as the new CEO, and that you are not being too idealistic.”

Catherine Nibali was chosen as the successor CEO to a company in trouble.

“You will have the union to deal with,” Samuel warned. “I know it was here when you arrived, but it is here nonetheless.”

“That’s true,” Catherine agreed. “The existence of a union is only one indicator of the deeply ingrained misconceptions this company drifted into. The people systems were based on false assumptions of managerial leadership. It’s no wonder the union was able to take hold. But, Samuel, there is more. The union is only the tip of the iceberg.”

“With all due respect,” Samuel interrupted. “Your predecessor, Al Ripley, tried a number of things. He re-engineered many of the work processes, he allowed group dynamic exercises, ropes courses, results based incentives, group bonuses.”

It was Catherine’s turn to interrupt. “Exactly,” she stared directly at Samuel. “Parlor games. Parlor games that, at best, might create a small burst of productivity, but in the long run, laid the ground for the union and shaped a culture that provokes disruptive behavior. We stand for what we tolerate.”

This is the beginning of the next book, sequel to Outbound Air. Find out how Catherine got here.

But, We Have a Company to Run

“But, we have an airline to run,” Samuel continued to object. “As chairman of the board, it is my primary responsibility to make sure we have the right person at the helm. It is not my responsibility to micro-manage you, meddle in the way you run things. But, the way you run things makes me wonder if we have the right person at the helm.”

“Look, Sam,” Catherine replied, “we can squeeze the legroom, rearrange the seating on the planes. We can start charging for checked baggage. We can add a service fee if someone wants a soda. But that is not our problem.”

Catherine looked intently at Sam, sitting at the head of the boardroom. In the periphery, she could see the logos of the other companies in the portfolio. Outbound Air was the company in trouble and she had been selected to turn it profitable. She continued.

“Sam, we have close to a thousand employees now. They work 40 hours per week. Economically, they depend on us. Our compensation system and job opportunities directly impact how they live, now, next week and next year. Their self-esteem, what they achieve in life, in large part, depends on the role they play for us. How we set expectations, how we define their working relationships, how we evaluate their effectiveness, all, have direct impact on their contribution. They come home at night, frustrated or satisfied based on how things went that day. The way we design the environment of their work has way more impact on our bottom line than any fees we may charge for luggage.”

The saga of Outbound Air continues. Find out how Catherine got here.