Overall what does the annual performance appraisal do? It certainly doesn’t create and build trust! What it does is enact fear and creates mistrust. How could trust possibly be created through a process wherein people are judged, let alone for outcomes over which they haven’t full control?  How could trust be created by a process where people are given credit or blame for effects over which they know (at some level) they have little influence?

Interactions Not Actions

Organizations are social systems, human activity systems that function through relationships—cooperative and collaborative relationships—among people. As explained in a previous post, performance is an emergent property of a system; it is a function of the interaction of the many constituent components of the system as well as the components themselves.  Thus in an interdependent world the interaction among members either increases or diminishes the performance.

Yet some might argue that if “is a team player” (or something similar) is among the criteria in the appraisal then this would promote cooperation and teamwork.  We mustn’t forget that an individual’s performance can’t be known because it is the result of the interaction of many factors—the system itself, the materials provided, the management provided, the equipment provided etc. Adding a measure such as ‘is a team player’ doesn’t make the unknowable known and it doesn’t enable control of what is desired.  A reasonable person would agree that because organizations are human activity systems that depend on cooperation and collaboration among its members, performance is neither summative nor reductive—it is emergent.  Thus it is not the criteria of appraisal that affords synergy it is the organization’s design and system of management.

An organization’s performance is not the linear sum of each person’s performance. That is to say, performance of the organization emerges from the interaction of many factors—ideally realizing a degree of synergy—among people.  Hence for an organization to function effectively and efficiently trust is essential. In light of this, to advocate for the annual review of employees’ performance that leverages fear and creates mistrust is simply wrongheaded, if not foolish. If organizational performance depends on interactions (i.e. relationships), why then do we put so much attention on measuring individual action?

In far too many organizations people are managed as if independent of each other and everything else.  In far too many organizations control of others is sought through metrics coupled to the assumption that each is seeking to gain as much as he/she can.  In far too many organizations fear is the go-to-lever for management.  Why else would carrot-and-stick methods be so popular?  When one’s ranking in the annual review depends on how one compares to others, then helping others is incompatible with one getting ahead and realizing a higher ranking.

Rather than learning and improvement, what the annual performance appraisal promotes are efforts to do whatever you can to look good. The impact of one’s actions on others is of little concern since ‘me’ looking good is ‘my’ primary concern—that’s what’s measured. Results matter and what I do for ‘me’ to get those results is what matters—in the end it’s about ‘me’ winning.  The effect is the relationships among people are anything but helping and productive. Further what’s beneficial to the wholesomeness of the system is secondary at best. While it may appear those in management are controlling things through metrics, what they are really getting is mistrust dressed up in compliance.  And compliance is not an antecedent of creativity, so why promote it!

Moreover the annual performance appraisal fosters the reinforcing attitude that you are on your own, which is an easy attitude to embrace since the system of economics—the economic context within which we conduct business—advances a self-interest focus as well.

Meaning Not Ends

Furthermore the relationship people have with their work is central to how they perform their work. If the work is seen merely as a means to money then the work one does has no meaning apart from what one materially gains from the activity. Therefore work is stripped of inherent meaning since it is just a means to material gain.  Also when the value of work equates to the amount of material gain it brings or to an abstract measure—when ends supplant means—the quality of people’s work, and that of the organization, diminishes.

To manage an organization as if everything is linear and summative is synonymous to managing to make the organization dysfunctional and its performance suboptimal.  Obviously creating an environment wherein self-interested behavior is encouraged—wherein either/or thinking reigns supreme and both reductionism and individualism are embraced—is antithetical to realizing a quality producing wholesome system.  Managing in a way that turns interaction into transaction reflects a superficial understanding of what it means to lead.

So why is it so widely practiced? Where is it proven that superficiality builds trust, the essential context for productive relationships?  Why does management continue with practices that diminish the likelihood of realizing meaningful work and synergy among people? Why does management continue with a practice that reduces risk taking, limits learning and sub-optimizes organizational performance? Is it possible that those in authority fear that without this force-based tool they would lose (perception of) control and not be able to get anyone to do as they wish?

We are left only to wonder, have those in management the courage for leadership?

1. Big company bureaucracy—no one likes rules that make no sense
2. Failing to find a project for the ‘talent’ that ignites their passion—top talent isn’t driven by money and power, but by the opportunity to be part of something huge, that will change the world, and for which they are really passionate
3. Poor annual performance reviews—annual performance reviews are not long term focused and thus are not performed effectively
4. No discussion around career development—most bosses never engage with their employees about where they want to go in their careers—even the top talent
5. Shifting whims/strategic priorities—top talent hates to be jerked around
6. Lack of accountability and/or telling them how to do their jobs—top talent demands accountability from others and doesn’t mind being held accountable for their projects
7. Top talent likes other top talent—if you want to keep your best people, make sure they’re surrounded by other great people
8. The missing vision thing—what is the vision you want this talented person to fulfill
9. Lack of open-mindedness—the best people want to share their ideas and have them listened to

10. Who’s the boss—if a few people have recently quit at your company who report to the same boss, it’s likely not a coincidence

Clearly the above are among the many things within organizations that are annoying, frustrating and counterproductive.  But why is it assumed only top talented employees would find these as such?  It is highly likely that these would be just as annoying, frustrating and counterproductive to others in the organization—diminishing the organization’s performance.

Doesn’t it make you wonder, why the concern is only for the best talent? Don’t all employees contribute to the organization’s products/services? Wouldn’t making anyone’s work difficult or senseless cause him/her to checkout—physically or psychologically from his/her work? After all, both Herzberg’s and Maslow’s theories of motivation apply to all people not just those who someone in authority labels as top talent.

I imagine some would counter saying, hey some people are more talented than others and management has to pay attention to the future stars, they are the future of the organization! Does not the performance of the organization emerge from the system!  What is the responsibility of management: to further the careers of those they believe most talented (and ignore that of the others) or to develop and enhance the capability of the organization (i.e. facilitating the retention and improvement of all employees)?  Wouldn’t doing the latter have a greater impact on the organization’s viability than the former? Why hire people who aren’t valuable to the organization? Wouldn’t an organization wherein all employees are supported in meeting their potential outperform another in which only a chosen few are doing so?  What better way to surround the best with the best than by helping everyone realize his/her potential!

Relating to some employees as valuable people and to all others as interchangeable, disposable and replaceable skill sets will not afford the synergy required for the emergence of everyone’s potential, and in turn the organization’s competitive advantage and viability. It is not the way to effectively leading the bottom from the top.  Why?  Because the organization is comprised of relationships and it is the productivity of these relationships that pre-figures the emergence of synergy, capability and thus performance of the organization.

Managers have to stop thinking about the members of the organization in a dualistic way and cease managing in a mechanistic and reductionist way.  If the organization is to maximally perform then those in authority must learn to understand and manage the organization as a living system. Doing otherwise, those in authority do a great disservice not only to the people but also to the viability of the organization. By minimizing synergy—essentially sucking life out of the organization—the potential that lies within will not actualize.

Canalize Don’t Control

The one thing that has the potential to meaningfully touch everyone and that provides guidance for all decisions and actions is vision.  Hence the gravity of vision can’t be overstated.

But contrary to what many believe, vision is not a futuristic statement nor is it an advertising slogan for display in the company’s lobby or the strategic mission of the enterprise.  Vision flows from the system of beliefs and values held in our (collective) mind. Being an attractor, it canalizes human energy in a way that either supports or opposes the emergence of creativity and organizational viability.

That is, vision pre-figures the experiences of those working in and served by the organization.  A vivifying vision can provide guidance for and completeness to the organizing structure, affording a sense of order and meaning to the work of the enterprise.

Why is meaning so critical?  Meaning is the basis of (intrinsic) motivation that in turn leads each employee to maintain commitment to the organization’s work.  Simply, if you want to retain people provide them something meaningful to do!

Thus a vivifying vision awakens and affords the flow of meaning throughout the organization and provides the context for the self-reinforcing interplay and exchanges among people affording joy in work. Most find it a pure joy to do meaningful things—don’t you?  If employees realized joy through the organization’s work, then few would abhor being at work!

Lead by Facilitating

To hire a person is a decision about the future not the past! Leaders don’t hire people for what they’ve done but for what they have the potential to do. Therefore, the way of organizing and managing must enable potential.  Unfortunately, many organizations are limiting and thus limited, not in people’s potential, but in what those in authority cause to be probable. Leading effectively enables, it doesn’t disable, potential. Accordingly, organizing and managing guided by a vivifying vision can provide employees the physical and psychological space to actualize their potential.

Leaders who make potential probable are those who lead from their personhood not their position.  Yet most talk of leadership in the context of position or possession, which is mere euphemism for the boss, the one-in-charge.  Who among us really likes to be bossed around!

As Eric Jackson noted, “people want to share their ideas and have them listened to.”  That is to say people need to be listened to because it communicates that they matter to the one who is listening.  In other words, listening communicates that you care; and caring is necessary for facilitating quality. Caring about (and for) the development of others is the way to sustaining organizational viability.

Commit to Quality

A large part of keeping talented people in the organization rests on keeping people in the organization talented.  You cannot have quality people without caring about the people you have.  Caring precedes quality!

Quality is the expression of the human spirit that lies within each of us; as such it is the manifestation of human potential. Why else is the allure of quality universal! Quality captures our attention because it resonates within everyone; it is the expression of our potential as human beings. Unfortunately, the common and widespread annual performance review is merely a means of exercising control over and objectifying others: It is the antithesis of a process for improvement of (and the experience of) quality.

However it need not be this way!  If the performance review process was at base a process for coaching and learning—and not a process for rating, ranking, exacting accountability and justifying reward/punishment—then it could be a means of guiding the development of people’s potential toward enhancing organizational capability.  So to have talented employees, replace the process of rating, ranking and accountability for results with leadership.

This requires managers who care about the development of those working in the organization. It requires those in authority to add value through their very being—not solely through their position—and who value the potential that lies within everyone. While any one can deliver results by any means, it is only the courageous that will do so with a focus on quality and the betterment of every employee.

In setting the overarching theme of his approach—and in effect his organization—Kenny said, “It’s important to me to be sure that everybody knows what every body else is doing. I want there to be a level of respect between everybody.” It is one thing to wish for this, it is quite another to enact it!  So how is this theme actualized?

Most will respond with, you get it through leadership!  Yes that concept, so universally misunderstood, is usually the answer to most of the challenging aspects of management.

Probably a far more helpful concept is partnership, which implies equal not subservient status.  This is reflected in Kenny’s assertion “there’s this idea that somebody’s job could be more important than somebody else’s, and to me, that’s not true.”  It appears Kenny does not want his employees to relate to each other as leader versus follower or boss versus subordinate or the essential versus the less essential.  As Kenny said, “I want all the people out there who work with me to feel as appreciated as possible….” The operative word in his statement is people who work with me, as opposed to working for me.  Because Kenny is ultimately responsible, and not that he is still the boss, he understands that it is his responsibility to embody (in words and actions) the respect for and value of people.  Every job, every task is essential and thus every person is essential and should be related to as such.

So what has Kenny created?  Apparently he has created an organization (and culture) wherein leadership is experienced through out.  However these experiences are not from Kenny interacting with each of the 150 employees—though this may occur—it is from 150 people respecting and relating to each other as partners.  As illustration Kenny relayed the practice of (what they refer to as) a “merch” lottery for the concert set-up and breakdown crew.  In this practice, Kenny places “everybody’s name in a huge sombrero and whoever’s name I pull out gets all of the money from merchandise sales for that night.”  This could amount to as much as $300,000.  The fact that it is a lottery (that everyone has an equal opportunity) and not given to the one person Kenny (or anyone else) deems most deserving—which would say to all others they are not—communicates to the crew that nobody’s job is more important than everyone else’s job.  Indicative of the partnership culture, what the crew did was wait until the end of the year and evenly divided up all lottery winnings.

Of course Kenny is very involved and does this because as he said, “my name is on everything.” Many might say, yeah and his is a small organization of just 150 people, you can’t run a large organization this way!

While everyone doesn’t have a bus and a bass drum with his/her name written clearly across them for all to see, everyone does have his/her name on the very relationships/experiences they develop and provide others.  If you care about your true self, then you will care enough to make sure that those relationships/experiences reflect the respect you have for people, yourself included.   After all, this is the essence of leadership.

The development of inquiring minds throughout the organization is central to this.  If everyone is thinking—really thinking and not merely rearranging their thoughts—the emergence of new ideas is quite probable.  Hence leaders must not communicate that they have the answers, but rather only that they have the questions.  Leading is not about knowing the answers it is about knowing the questions!  As Gregory noted about his former boss, Bill Gates, “he’s in many ways an egoless thinker. Bill never walked into a room saying, in effect: “I’ve got this idea and it’s got to be right…[he] was always great about saying: “What do you think? What do you think?”

Clearly to develop inquiring minds leaders must model the very behavior and attitude they wish to develop in others.  But to do this requires having the courage to publically hold up one’s ideas for examination and challenge.

Critically thinking about something doesn’t mean being a critic or criticizing others.  It means having the ability and willingness to think about what you are thinking. As Gregory Maffei explained the great leaders he knows are “always rethinking and rethinking”, what he called having a “frictionless mind.”   This level of thinking allows for different perspectives to shed light on an issue and with more illumination comes greater understanding.  It is only through understanding that we can improve: as Deming often noted, there is no substitute for knowledge!

To this end this kind of leader engages with others in productive dialogue.  They encourage others to share their thinking and also to explore each other’s perspective, always seeking to integrate and synthesize perspectives.  It is not about who has the winning idea; it is about how can we use everyone’s thinking to move beyond what we individually understand.

Effective leaders know the importance of developing productive relationships—partnerships—and since leadership is relationship dependent truthfulness is essential.

For something that is dead or dying, at least outside of Iron Mountain, it seems to show up quite often.  Even Bob admitted, “a lot of managers haven’t been told this…as they are very much in a command-and-control reflex.” It is unfortunate for the rest of us that Bob is among a very few who see the need for something else.  Bob Brennan is clearly one who sees that management in the future can’t be a replay of the past and he seemingly is doing something about it at Iron Mountain.

In place of command-and-control it seems Bob employs two-way constructive feedback between the manager and the managed. Quoting Bob “we want managers to display confidence and optimism, and to give constructive feedback, never destructive.  And managers need to seek constructive feedback themselves.”  The purpose of which is to improve what one does, manager and non-manager alike.  Because this happens through a constant one-on-one dialogue—happening almost daily—an environment is created wherein people feel that it is not only okay to share ideas for improvement it’s encouraged. As Bob noted “the best way to take care of people is to have a very open environment where they can collaborate.”

Creating an environment conducive to learning is tantamount to creating a culture of trust.  Such an environment can’t emerge if managers are not open to the influence of those they manage.  In short, managers must model what they expect in others—they can’t be defensive they can’t be a negative force.  Hence Bob strives to avoid hiring the kind of people that breed defensiveness and mistrust.  He avoids hiring people who are “most interested in being the boss”—climbers.  These type people—those who are self-centered and concerned about ‘me’—are not trustworthy or collaborative and manage using fear.  Such people tend to be toxic bosses.

What is really going on is the development of mutually helping relationships that serves both the individual and the organization.  Manager and the managed are in partnership.  This distinction is important since partnership implies equal status, not subservient status.  When equal status is felt then constructive feedback is far more likely. To paraphrase Riane Eisler, partnership recognizes the interdependence of all roles and seeks effective and respectful ways to support each other’s role—command-and-control can’t even come close to doing this.  When we approach leadership as a partnership then we approach each other as fellow human beings and increase the likelihood of actualizing potential.

Woven throughout the interview with Bob Brennan is the notion that to be a leader requires one to be a teacher.  A teacher is not one who imparts knowledge or controls information but one who is an unceasing learner and strives to facilitate learning in others.  It is only through learning that we can improve.

While Anne says listening to people helps her to “understand what motivates them” toward getting them “to push themselves beyond their comfort zones”, listening does much more than this.  Listening communicates.  It communicates to others that you actually care about them.  In so doing you also communicate that you have trust in them, which in turn contributes to the development of trust throughout the organization.  Building a culture of trust is not something that can be legislated, it must be demonstrated, and it begins with the trustworthiness of those in authority.

Why is trust so essential?  Because without out it you won’t have a workplace wherein people feel safe and secure enough to fully exercise their capabilities; to step out of their comfort zone in order to realize their potential.  If, as the leader, you want your organization to remain viable, then it has to be a place where people’s ideas continue to emerge.  People are less likely to engage in the work of the organization if you don’t engage with them.

Anne’s approach to her leader-follower relationships is one of partnership. When speaking of how she recruits and hires people Anne said “I need partners in this business.”  Listening to your partners, engaging with partners leads to a productive relationship.

Engaging with them doesn’t mean getting out in front of them—showing you are the one in-charge—but rather getting behind them. Anne explains, “if you think about how you steer a boat, it’s always from the back, and I’ve moved toward the back of the boat.”  While Anne remains the one in-charge, she uses her positional authority to support the efforts of those in the organization.  Anne enables people to paddle their own boat—providing them the opportunity to have a sense of ownership—explaining, “I wanted people to be mini-C.E.O.’s of their area.”  This sense of ownership is the engagement that we often call motivation.

Though Anne seeks people who are smart, honest with him/her self, curious, and who want to be a part of a group to build something.  What Anne does watch out for and avoids are people “looking for a title”, those who are climbers.

So many feel that they have to continue to establish their position as the one in-charge—leading by fear—and in so doing they actually lose their ability to be a positive and productive influence.  Anne tells of her experience of trying to lead by imposing herself on others, “it just took a lot of false starts to learn that being smart isn’t the same thing as being a leader. We were going down the runway but the plane wasn’t taking off.”  There is a huge difference between people being moved and people being motivated; fear moves people but it doesn’t motivate greatness, it actually inhibits it.

Anne’s approach to leadership reminds me of an orchestra conductor.  Enabling those with talent and potential to make music, the kind of music they could never make alone.

Being trustworthy implies others can (and will) trust you—you are person who can be trusted.  It means you have demonstrated that you are not duplicitous; that you are not a divided person, but one with integrity.  “People have to believe in you.  And when they stop believing in you, you can say all that things in the world but it’s very hard to mobilize an organization when they’ve lost that belief”, says George Barrett.

Though trust is most often developed through experience—what you’ve done and how you have related to and treated others—it speaks to the confidence others have in what you will do.  As George explained, people “ have to trust that you understand them…that you have their interests at heart.”  If people are confident that you will act competently with their best interest at heart then they will see you as trustworthy.

To do so means that you actually care, which takes courage: Courage to give of oneself to others—to be vulnerable to another.  It takes courage to acknowledge your limitations—being honest about your strengths and weaknesses—affording you the ability to act consistent with your capabilities—making promises you can fulfill.  As George noted, “people really have to believe that you know what you are doing.”

In the end leadership requires developing productive partnerships with those you lead.  As Barrett asserts, “leadership is a two way street.  I tell my team I expect to learn from you as well as you’ll learn from me.”  Leadership and followership are inseparable, not in the sense that it takes followers to be a leader but in the sense that to lead you must also be willing to follow—showing that you truly trust those you lead.  Foundationally there must be trust—an essential human need—for  leadership.

In speaking to what she learned about self-leadership Sheila said, “its about how you talk to yourself. And it’s getting to know yourself.”  What Sheila learned to do—with the guidance of a coach—was to be reflective and to critically think about what she was doing so that she could improve the leadership experience she provides by increasing her self-awareness around her management style.

Thinking critically isn’t about self-criticism, rather it is about challenging your thoughts and assumptions; it’s about going up stream to the thinking that underlies your thoughts and actions.  And this requires courage.  Only then can you begin to improve your leadership; only then can you develop and improve your ability to influence through your personhood.

Authentic leadership does not first rely on what one has—position, authority or even subject-matter expertise—but on ones’ very being.  The way you choose to-be-in-the-world speaks volumes about you to others.  Your worthiness to potential followers is communicated by your way-of-being.

Sheila acknowledges that leadership is about developing productive relationships.  In her words, “it’s how you help others grow as leaders so that they don’t need you. “ An effective leader collaborates with others to: a) help them develop; and b) help them help the organization develop. These are not mutually exclusive objectives and are quite interdependent.  As more people develop their potential the organization correspondingly enhances its capabilities.  Moreover, as the number of productive relationships in the organization increases then the emergence of synergies and creative ideas becomes more likely.  As Sheila asserts, “the important thing is inspiring people to do it their way, and with their own creativity, and for them to pursue that.”

In regard to the first point Aaron said, “everyone has a start-up mentality…so everyone feels really a part of what we’re doing…everyone is encouraged to be entrepreneurial and people tend to be extremely passionate.” An excerpt from It’s the EconoME, Stupid: Cause and solution to many of our difficulties speaks to what Aaron seems to have realized:

S:            Of course I understand if other organizations enter the market offering competitive products or services, and/or if customers’ needs or expectations change, then the market for the idea may no longer be what it was and so the original thinking around the idea may have to change.

Q:            What I think you are saying is, those with authority over the business need to be flexible and adaptive for the business to establish and maintain a share of market to keep the (business) cycle turning.

The approach to leading Aaron seems to follow requires recognizing that the energy in one’s idea can ignite the energy of others if the story the one tells allows others to see themselves in the story—the meaningful part they have.  As Aaron says, “it’s all about capturing people’s imaginations and getting them excited about what’s possible.”   As expressed in It’s the EconoME, Stupid, “capital is critical to a business, but we mustn’t forget the idea is the essence of a business…But capital alone is not enough! Developing a business is difficult; it takes tremendous commitment to create a viable business and this commitment comes from believing in—having faith in and commitment to—the idea.

In regard to leadership as partnership Aaron explained, “I’ve made some mistakes in terms of getting involved at the wrong level of the problem or the wrong time.”   We do this more often than not when we don’t have trust in the other, so we try to control.  But when leadership is partnership we recognize the interdependence of our roles and seek effective and respectful ways to support each other.

Thus, what Aaron seems to have learned is that an effective leader can’t and shouldn’t “be involved in every single decision that gets made in the organization.”  If you truly trust those you employ, then you will allow them the space to fully express their talent and capability while at the same time supporting them in their efforts.  Doing otherwise is counterproductive; you would be interfering with what Aaron referred to as a “healthy system that’s emerging.”

To facilitate this emergence and the springing forth of ideas is the practice of critical thinking.  There is no substitute for critically thinking about what you are doing or propose to do.  In describing the practice at Box.net Aaron said, “we often go through a process of thinking about the best way to execute on something…then come back again after a day or two and figure out how can we do this even bigger or better.”

Learning is central to Linda’s approach as well.  Linda’s practice rests on having a healthy view of the role that mistakes can play.  Accordingly, Linda promotes the communication of bad news by acting on the “promise of no recriminations.” Linda challenges everyone to gain understanding of the cause and preventive steps “so it doesn’t happen again.”

I offer a cautionary note regarding the error of chasing down every mistake as if each is an unrelated single event.   Most often, mistakes and errors are faults of the system and not of an individuals’ or team’s action.  Systems thinking and statistical thinking are essential for discerning the difference and for maintaining trusting relationships—both essential to learning and effective leadership.

In light of Linda valuing learning, her process of hiring is quite consistent as well. If learning is essential then it is important to bring into the organization those most likely to be learners. Accordingly, Linda seeks people who exhibit curiosity, passion, the will to take a risk and a sense of humor.  With these qualities in all employees—managers and non-managers alike—the organization has the ‘raw material’ from which creative solutions can emerge.

Linda places great importance in selecting the right people for her organization and just as importantly she works at retaining them.  To this Linda says, “my job is to re-recruit them every day and give them a reason to choose to work for us and for me as opposed to anybody else.”  What underlies this approach to leading people is an employment relationship not framed as an economic exchange but rather on mutually beneficial relationship beyond material gain—we help each other develop.   Essentially Linda’s leadership is about developing productive partnerships with those who work in the organization.

In short leadership is about developing relationships and developing people.  It seems so simple and yet it is so rare.