Systems Thinking

How to stop leaders from “gaming” your system

For two decades I designed compensation and performance management systems for large and medium companies. I always had this nagging thought that after two or three years the system had run its course. Those who wanted to do so had figured out the game and turned what was intended to be a fair system into their own playground.

Quantitative performance ratings drove me crazy. Leaders would figure out the overall rating they wanted, and then go back and tweak the individual ratings so that they could give the salary increase they wanted to give.

Today, the Wall Street Journal carried an article about how companies are learning to game Glassdoor. Companies like SpaceX, SAP, LinkedIn and Anthem “encouraged” people to leave excellent reviews, causing unusual spikes in their ratings. CEOs questioned about the practice said that the ratings on the site were not representative of their company, so they fixed it.

I see a pattern here – those systems that are intended to provide helpful and unbiased data can be “gamed.”

The other nagging thought I had back when I designed compensation plans was that plan sponsors wanted to substitute a system for daily leadership. How do we make sure the tellers are upselling? Put in an incentive plan. Are tellers balancing? Put it in the incentive plan. Are they being nice…? You’ve got the idea. The plan becomes so complicated that two staff analysts are engaged to “track and manage” it. The branch manager doesn’t understand it and spends more time explaining the plan than correcting behaviors.

I see another pattern here – there seems to be more value placed on systems to manage behavior than on leadership observation, coaching, and feedback.

Systems are critical in an organization. They lay boundaries, communicate values, encourage appropriate behavior while discouraging behavior that is contrary to the mission. They are not, however, a substitute for leadership. The timely and effective use of organizational systems should be a competency for which leaders are held accountable.

How can an organization build accountability into their systems so that the data and results are intentional and not “gamed?” Here are four ways to get started. (more…)

Red Tape Holds Up New Bridges (…or the VA)

redtapeWe have yet another political catastrophe on our hands.  Those veterans who gave us our freedom have been duped by the bureaucracy – red tape – of their own government.

It reminds me of an email I saw once, with pictures of funny headlines that were actually mistakes.  This one was more profound than they probably realized….

Red Tape Holds Up New Bridges 
      (And the tag line was….You mean there’s something stronger than duct tape?)

Bureaucracy – red tape – is created by layers of leaders, mounds of paperwork, and a lack of real dialogue.  When real dialogue is neither encouraged nor rewarded, we end up with a culture of silence.  Those who need to know never hear what they need to hear. And yes, culture and bureaucracy are stronger than duct tape.

We certainly have an abundance of examples of how a culture of silence can damage an organization. (more…)

Don’t Let the System Lead You Astray

“Most people do not listen with the intent to understand; they listen with the intent to reply.” —Stephen R. Coveylisten

INC online has a very cool article – 365 Quotes to Inspire You in 2014, by Dave Kerpen.    I bookmarked it, and hopefully will be able to find it again when I want to add quotes to a presentation or article.  That, of course, will depend upon whether or not my logic of filing today is the same as my logic for searching tomorrow.  That’s not where I’m going with this, though.

As I was perusing the list of 365 very powerful statements that truly do inspire, the question that loomed large was….why, when everyone loves these quotes and is hugely inspired by them do we still have behaviors that are not aligned with those espoused?

I’m not sure when Covey made the statement about people not listening with the intent to understand but the intent to reply, but I suspect it was a few years ago and several hundred thousand of us have read and been inspired to change our behavior.  I will be the first to admit that while my intentions are good, I continue to frame my own response as I listen to others speak.

The topics in Kerpen’s list of 365 inspirational quotes are terrific….authenticity, transparency, teamwork, responsiveness, humility….by such leaders as Jefferson, Churchill, King, Ghandi, Mother Teresa.

My question about all of this is somewhat rhetorical, but one worth pondering.  When we read these inspirational quotes or hear an inspirational speaker share wisdom that we truly believe is important to embrace, why don’t we do it…all the time? (more…)