Summary: Under New Management By David Burkus
Summary: Under New Management By David Burkus

Summary: Under New Management By David Burkus

Outlaw Email

Corporate leaders across the globe are discovering that banning or limiting their employees’ access to email is making them more, not less, productive. Their experiences are matched by recent research findings that email hurts more than it helps.

after-hours email can interfere not only with nonwork relationships but also with work relationships, specifically by increasing any preexisting tension between employees and their bosses. The researchers suggest that managers take these findings seriously and compose after-hours emails with caution, and also that employees who are angered by after-hours emails consider leaving and moving to a company with an email limitation policy (like Atos, el Mejor Trato, Learning as Leadership, or Daimler).

Whether or not company leadership decides to restrict email, limit how often employees check it, or ban it entirely, both the research and the recent experiences of these companies make a strong case that email is not the most effective tool for communication. Beyond interfering with your work-life balance, it can also have a detrimental impact on your productivity. Clearing out your email inbox can make you feel really good—like you’re ultra-productive. But unless your job is to delete emails, time spent in your inbox may not be time spent wisely.


Put Customers Second

To better serve their customers, some corporate leaders have found that they must put their customers’ needs second and their employees’ needs first. They have basically inverted the hierarchy and aligned their companies with a well-researched model of customer satisfaction that comes through employee happiness.

As the leader of Starbucks, Schultz believed that the best way to scale was to improve customer experience—and that the best way to do that was to engage the frontline employees. “We believed the best way to meet and exceed the expectations of our customers was to hire and train great people,” Schultz said. “We invested in employees who were zealous about good coffee.”

Schultz created extensive training programs designed to invest in and develop partners who would thrive working behind a counter and interacting with customers.

Partly influenced by his childhood and partly to underscore the importance of the frontline partners, Schultz began offering comprehensive health care coverage for all partners, even part-time workers who logged more than twenty hours per week. Under Schultz’s leadership and with the company’s investment in its partners, Starbucks bloomed. In 2000, Schultz stepped down as CEO (but remained chairman of the board). The company had grown dramatically, opening over 1,000 stores in his last year alone.

Without Schultz’s emphasis on the partners, however, that growth rate would end up becoming a problem.


Lose the Standard Vacation Policy

Many leaders are beginning to question why, in offices that do not track hours worked, they need to track days not worked. Companies that have switched to unlimited vacation have found that their old policies often limited employees’ engagement and performance

Netflix, Virgin Group, ConsumerAffairs, and Windsor Regional are all very different organizations, but their differences actually disarm the most common objection to an unlimited vacation policy: “It won’t work here.” Their experiences suggest that such nonpolicies can work anywhere—anywhere employees are burned out or burdened by red tape. Anywhere high performers are desperate for simplicity and freedom and willing to be responsible in return is a candidate for nonpolicies.


Pay People to Quit

Helping employees quit, and literally paying them a quitting bonus, may seem insane, but many leaders are finding it worthwhile. Research suggests that such incentives might have a positive effect on company performance—and even on the employees who stay.

At some point during their first weeks working at Zappos, everyone gets “the offer.”

It’s an offer that has become legendary around the online retailer, and it’s not what you’re thinking. It’s the inverse of the offer most of us get from an employer—the offer of a job. Instead, during their primary training at Zappos, new employees are offered $4,000 to leave the company right then. They are paid to quit.

Four thousand dollars. No questions asked. No counteroffer. “It’s really putting the employee in the position of ‘Do you care more about money or do you care more about this culture and the company?’” said Zappos CEO Tony Hsieh about the goal of the offer. “And if they care more about the easy money then we probably aren’t the right fit for them.”


Make Salaries Transparent

While sharing salaries might raise privacy concerns, some leaders have found that keeping them secret might be hurting employees even more. Research suggests that pay secrecy actually lowers overall employee performance and produces more strife and distress in the workplace.

Many companies don’t share information about how they determine individual salaries, yet sharing that information alone can help restore a sense of fairness and equity to the minds of employees. Making the pay formula public was enough to eliminate some of the damaging effects of pay secrecy found in studies.

Although total transparency may not be feasible for your company’s culture, the evidence suggests that any steps taken toward transparency will improve perceptions of fairness and feelings of engagement—and ultimately boost performance in dramatic ways.


Ban Noncompetes

Putting noncompete clauses in employment contracts is a long-held practice. Evidence suggests, however, that noncompete clauses hurt not only departing employees but also those who stay with the company as well as the company itself. That’s why more and more leaders are creating non-noncompete environments in which information is shared freely, even with outsiders.

The past few years have been pretty good for noncompete clauses and the lawyers who write them and enforce them. Noncompete agreements, or noncompete clauses, are the agreements typically entered into when employees first join a new organization. The employees consent, if they leave the company, to not going to work for a rival or establishing a competing business for a fixed period of time

Despite the apparent ubiquity of noncompete clauses everywhere from churches to sandwich shops, evidence from economics and psychology suggests that the benefits of noncompetes usually fail to outweigh the costs on the people who sign them and on the companies that promote them. Greater benefits, in fact, come from giving talent and information real freedom and building non-noncompete environments.


Ditch Performance Appraisals

Performance appraisals have long been assumed to be vitally important to a manager’s job. But many companies have found that rigid performance management structures actually prevent people from improving their performance, so smart leaders have begun eliminating these structures in favor of newer measures that actually enhance performance.

Adobe had totally redesigned its performance management system to eliminate the yearly performance review session and replace it with a more frequent and less formal “check-in” process. The check-in approach was the real-time solution that Adobe employees were looking for. Managers and employees meet for check-in discussions at least once a quarter (although many schedule check-ins every month or after a project is completed). The discussion isn’t scripted, and no paperwork is filled out. However, every check-in discussion centers around three topics: expectations, feedback, and growth and development.

Changing from the old system to a more frequent, less formal process was a big transition, and so Adobe hosted sessions to help make employees and managers aware of the change. They also created training sessions for managers to learn how best to structure their check-in sessions. Amazingly, 90 percent of Adobe’s managers participated in the training. The company also created an employee resource center to answer frequently asked questions about performance management, career coaching, and making the most of check-ins.


Hire as a Team

Most managers hire by screening résumés and conducting a few interviews with individual candidates. Later, many of those managers find that a significant percentage of the new hires don’t perform as well as they interviewed. To help them make smarter hiring decisions, the best leaders now bring their whole team into the interview process.

While the hiring processes at Whole Foods, Automattic, Google, and Steelscape all look fairly different, the core philosophy is the same: the people who work with new hires should be the ones deciding whether or not they’re hired. Behind this simple philosophy is hard evidence that individual performance isn’t entirely individual. Gauging a new employee’s potential for performance is difficult, and knowing if that person will work up to that potential is even harder—especially when the job falls to a lone manager.

The most accurate way to judge performance potential is to have the judging done by the colleagues who will affect much of that performance.


Write the Org Chart in Pencil

Constructing rigid hierarchies and enforcing them through a fixed structure may have worked in older industries like the railroad industry, but the nature of work today demands an organizational chart that can handle change. The best leaders write their organizational chart in pencil, allowing the best teams to form around problems and products, instead of drawing lines and boxes in ink.

IDEO’s organizational chart isn’t as malleable as the ones at Eden McCallum, SumAll, and W. L. Gore. Even in its early years, however, the company has reinforced the notion that the organizational chart isn’t hard doctrine. It encourages employees to branch out beyond their formal teams to produce better collaborations and keep the network humming (though probably unintentionally)

In doing so, IDEO is an example of a company benefiting from the power of network culture even if it isn’t free to rewrite its organizational chart around projects.


Close Open Offices

While the recent trend toward open offices is often explained as necessary to inspire collaboration, research and experience have shown that the benefits of open office design for collaboration are typically offset by myriad distractions. The best leaders have a different answer for the open- versus closed-office debate.

The decades of research into office layouts do provide one glimmer of hope for open office employees, or at least a way to counter some of the negative effects. Employees who felt that they had personal control over their physical work environment (being able to change the arrangement of their desk or move to a different space to work when they wanted to) reported that they were more satisfied with their office environment, more cohesive with their team, and more satisfied with their jobs. Those who were more satisfied with their jobs also performed better.

In sum, open offices need to be closed and closed offices need to be opened, and employees need to be given choices that enable them to find what works best for them, for the team, and for the company.


Take Sabbaticals

Despite the temptation to be “always on,” the best leaders give themselves and their employees a good long break once in a while—a sabbatical. These leaders have found that the best way to stay productive all of the time is to spend a good portion of the time being deliberately unproductive.

Sabbatical, mini-sabbatical, pre-cation, mandatory vacation—all of these programs have one thing in common: they represent small investments that yield big returns. By giving employees structured time to rest and rejuvenate, new potential for creativity and high performance is unlocked. Where they all differ—in duration and structure—is a benefit for leaders looking to gain from giving leave. Each company experimented with a way to get the benefits of rest in a way that didn’t disrupt its business model. For many companies, it was a formal sabbatical program, while for others it was smaller but more frequent leaves. Regardless, the positive returns experienced by all of these companies far outweigh the costs, and the empirical research backs up their experiences. Time away from work makes work better.


Fire the Managers

Some of the most successful companies have opted to fire all their managers. Others have found ways to push some of the management function down to the level of those who are being managed. Research suggests that employees are most productive and engaged when they, and not their manager, control their destiny.

Employees at valve software don’t have to take orders from “the boss. In effect, Valve is a company with no managers. They don’t believe in managers, and they don’t believe in job descriptions. When new people join the company, they rotate around on various projects, talk to lots of people, and then decide which project (or projects, if they decide to contribute to multiple areas) to jump into full-time.

The leaders of companies like Valve, Morning Star, and New Belgium experimented with different ways of providing autonomy to their employees, but all found the same power in giving up control. When individuals feel that they’re free to determine what they’re working on or how they work, they are more motivated, more loyal, and more productive. Decades of research support the individual anecdotes of these founders. To benefit from the motivating power of autonomy, leaders don’t need to give up total control and fire all the managers, but every leader does need to consider how their current structure might be limiting the perception of freedom and blocking the organization from its peak potential.


Celebrate Departures

As individual job tenure in companies becomes shorter, leaders say good-bye to even their best people more frequently. How they do this—whether they celebrate or shun the departed—affects not just those leaving but those who stay, as well as the performance of both the old and new firms.

Companies that engage or build alumni networks are still in the minority, but their numbers are on the rise. As the nature of work and the nature of management change, the way even former workers are managed is changing along with it. The benefits that companies have reaped from networks, as well as the research on the importance of a proper blend of network connections, definitely support the concept of keeping in touch with former employees. Whether a company’s efforts are as robust as the alumni networks of McKinsey & Company or Microsoft, any attempts to keep old employees connected and a part of the organizational network are likely to pay big dividends. There is real value in celebrating departures and making sure that a farewell simply becomes a “see you later.”