Sunday, July 26, 2009

The Paradox of Success

Organizations, like people, sometimes reach a point where the ego, either the collective ego of the organization or the ego of the organization’s key leaders, has swollen to the point where growth is stifled. New learning becomes impossible. Innovation and exploration slow or stop.

“We are the best!” “We are bullet proof!” “We are too big to fail!”

When an organization has become so certain that it is the model for others to follow, that it has the answer to every problem, and/or that it is so competitively superior to others that there is no need to look for improvements in services, products, or delivery systems, the end is near.

The employees of these companies are often the first to detect these signs. The problem is that within organizations where this mindset is held at the highest levels it may be difficult or impossible for lower level staff to get top level managers to see the signs.

In his book The Paradox of Success, John O’Neil gives a few telltale signs that help identify when an organization needs to step back, regroup, and invest in some serious organizational self-renewal. O’Neil suggests that we watch for:

  • Centralization vs. Decentralization of Power – In pyramidal structures the decision-making capacity is located at the top, in the top manager’s office. In self-renewing organizations, knowledge and decision-making power are dispersed where the action takes place.
  • Adaptability of leadership – The old, more typical, organizational structure has the strong leader; single point of control; a lonely, isolated, resourceful, and action oriented leader. A self-renewing organization develops and nurtures large numbers of leaders who know how to work alone and in teams. These leaders swarm around trouble, and know when and how to retreat to think deeply, and plan carefully.
  • Flexible structures and procedures – The typical organization is massive, hardwired with policies and procedures, specialized by department and function, and slow to respond to change or mistakes. The self-renewing organization is light and flexible, situation-responsive, quick to adapt. It thrives on partnerships and strategic alliances, continuous learning, and is aware of its shadows – those places where the taboo topics, and the dark side of both corporate and individual personalities lurk. (The Paradox of Success, John O’Neal, 1994 – P. 254)

Individuals and leaders of organizations need to treasure truth-telling friends and associates. They need to listen whether the news is good or bad. They need to seek out teachers and mentors who will challenge them, and introduce them the undiscovered country where growth and improvement lie. Learning is the fuel that will enable both individuals and organizations to sustain success.

Your role is to be a “truth-telling” friend to the organization and its leaders. Or, if you are the leader, your role is to seek out and listen to those who can see the truth and are willing to say it openly. (This is easier said than done for many leaders.)

Your role is to find a teacher or mentor who can lead you into the wilderness where self discovery and learning can take place. Or, it might be that your role is to become a teacher or mentor who can help others on their journey of growth and discovery.

Either way, you have a role. If you choose to play it, both you and your organization have a chance at success.

What is the truth about you? What is the truth about your organization? Who should you tell? Who should you seek out? Who are your teachers or mentors? When does your journey of renewal begin?


Saturday, July 11, 2009

10,000 Hours

A few weeks ago, my friend Tim Scudder (CEO at Personal Strengths USA) posted the following on one of the networking sites we both frequent: "Just read Outliers by Gladwell. 10,000 hours to achieve mastery!? Speaks volumes to the value of retaining and developing people."

I have often thought about the importance of developing and retaining good people. Clearly investing in the growth of our employees is essential to the success of the organization.

But,Tim's comment caused me to stop and reconsider my thinking about the organizational costs of loosing an employee who has reached a significant level of mastery. His comment made me think about the true value of the individual, and the importance of retaining and continuing to develop these exceptional people.

From a leadership perspective, the knowledge, skills and abilities of the people within the organization contribute to the success of the entire system. (See the blog post on Knowledge, Skill and Talent) The stronger your team, the more likely it is that you can achieve your goals.

In Outliers, Gladwell states “…[T]en thousand hours of practice is required to achieve the level of mastery associated with being a world-class expert – in anything...” (P. 49)

At first blush it seems that this in not that hard to achieve. Any employee who had worked for five years has invested 10,000 hours in a job. So why is it that finding people who have achieved mastery is so rare?

When you examine what mastery requires, it is more than time-in-grade. Mastery requires study and focused effort. For example, an employee may come into the organization having an idea of what leadership requires, but they may spend only a few hours each week developing their leadership skills; only a few hours in practicing the craft. It may take many years, even decades, to achieve the 10,000 hours necessary to develop a great leader.

If you do the math (and this is admittedly very rudimentary math based on some very gross assumptions), at a total cost of $100 per hour (including all overhead related to employing a person), and assuming that a person spends maybe ¼ of his or her time actually working on developing mastery of a chosen field, it will take 40,000 hours for a person to achieve the 10,000 hours of investment in a chosen field. This is equal to about 20 years of work. During those 20 years, the organization will have invested over $4 million in that employee’s development. If the person spends significantly less than ¼ of their time each week invested in developing their craft, mastery may never be achieved.

What is lost when that 20 year veteran, that person who has achieved mastery, walks out the door?

At a minimum, you will be trying to attract another highly experienced person from a competitor or related business. According to Human Resources experts like Hewitt Associates and Bliss & Associates, the best case cost for lost productivity, recruitment, and training will be 150% of the person's salary. (Julie Clark, City of Carlsbad HR Director) In the worst case, you will invest years bringing the new person up to a level of mastery that was lost.

A leader (and the organization as a whole) must consider not only the monetary costs of loosing an employee who has achieved mastery, he or she must also consider the systemic costs.

What were the costs to the classical music world for the loss of Mozart? What would be the cost to Apple for the loss of Steve Jobs? How would the world be different today if we had lost the other masters of their craft before their contribution was made?

What would be the cost to your organization of the loss of key leaders or "masters"?

Tim said that the concept that it takes 10,000 hours to achieve mastery speaks volumes about value of retaining and developing people.

I believe that it not only speaks, it shouts.