~synthesis~

simplicity

Have you noticed that the more America cares about something, the more she screws it up?

From education to healthcare to crime to terrorism to disaster relief to taxation to foreign policy to whatever; anything that the politicians get their paws on is sure to take a turn for the worse. Moreover, the longer they hold on to it, the more harm they do. The media doesn't help with it's hype-obsessed approach, but that's a separate story.

Education has been at the forefront of political debate for as long as I can remember, but this year 7,200 American students will drop out on every school day. Look at America's foreign policy history of "anointing" leaders (just in the Middle East: Saddam Hussein, Hamid Karzai, the Taliban, etc.); or how Hurricane Katrina was handled; or how many people in this country die of preventable diseases; or the "war" on drugs; or crime-prevention efforts that result in more crimes and more criminals in jail year on year.

The list is endless, as is the complexity of each of these programs. It seems that everything this country cares about must be huge, intricate, nuanced, and over-manned. If it isn't we don't care enough. If we don't throw enough money at it, we're not really committed. Therein lies the rub, the fallacy, and our failure.

What can be done to create a more productive system? Whatever it is, it's for sure not as simple as I'm about to make it. Or is it? Is that our problem? We like complexity? It's much easier to hide (or hide things) in a tree/bush/shrub/etc.-ridden forest than in a less-cluttered place like an empty parking lot. Ask people in the government and they will affirm that it's an incredibly complex and nuanced thing - this is why the 2008 Federal Budget numbered 2,200 pages.

Warren Buffet once said that "business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective." Most corporations and governments are rife with business school graduates. Maybe not such a good thing... We should not take this idea that complexity is good, inevitable, and to be cherished as truth or acceptable.

What if three things were to change:

1. Spend well - most budgets are funded based on LOBA (lower of budget or actual), which is fine when you have a ton of money and no accountability. It favors those who spend, not those who do. What if this changed - budgets are now zero-based (start from scratch), and funded based on outcomes. There will be multi-year projects that need to maintain funding, but they should be assessed based on what got done in the current year and whether it's time to increase, reduce, or cut the investment. The goal should be (for the 1st year) a budget that is 10% the size of the current one - 220 pages.
2. Rewarding completion - why don't things stop in government? So many projects (largely due to #1) go on and on and on, just because departments measure success based on funding; and cutting things admits a need for less money. We should reward good completion - it could be as simple as a bonus (to the government employees, not the contractors) for finishing a project on time, on budget, and closing up that shop. Those people should be first in line for the next cool thing to happen, because they got it done the last time. I'm not sure what the real goal should be, but my gut says 80% of programs 20 years or older should be cut, and 20% of programs younger than 20 years should be cut - every year.
3. Being accountable for less - this is big. I've never seen any successful project get done when it had more than three objectives. In fact, the most successful ones have just one. When you try and do everything for everyone, you end up doing nothing for anyone. We must only fund programs that have a clear, singular, time-limited objective. It's true that some things are not time-limited - defense or social security come to mind - and that's fine, they should be the exceptions. The goal should be for every project to have a clear, specific and timely outcome. If it doesn't, it doesn't get funded.

I know I've focused solely on money, but look at how things get done in government, it boils down to he who has the $$ has the power. Let's temper that power a bit...

content, bandwidth and lunch

Marshall McLuhan was right - the medium is the message.

In almost every case, those that thought content was king were proven wrong. From analog modems (remember baud rates?) to DSL to Cable to FIOS, people routinely (and happily) pay a premium for bandwidth,  but they absolutely hate to pay for content.

Think back to the days of the original Napster and Kazaa - if I had been one of those that used either service, my thought process was simple: "I hate paying for content, but I don't mind paying as much or more than $100/month for bandwidth." I may only download 50 songs in a month but I'm still going to be happy with my killer bandwidth vs. having paid $50 for music.

These days people actually pay for multiple sources of bandwidth - I have broadband at home, a data plan for my phone (and a voice plan) and then also pay for hot spots when the need arises. But I still dislike paying for content, I do use Pandora/Hulu, etc. and will buy content, though grudgingly.

Mark Cuban wrote brilliantly about the DVR vs. internet video. In it he talks about how in their typically narrow-minded (the only thing I know is a hammer so everything looks like a nail) mentality, media companies want cable companies to eliminate or cripple DVRs because they allow viewers to avoid commercials. This perspective is shared by most if not all content publishers. They're crazy!

You know others are progressively eating more of your lunch and yet all you want to do is hang on to the meager scraps you have now? Why?

Digitization has altered the equation for publishers - they had the corner on both the medium and the message, but now anyone can distribute content (we haven't even talked about bit torrent) and most people can publish without needing an "official" publisher.

From music to video to books, each publishing machine has attempted to preserve its original business in the hopes of extracting yet one more drop of revenue. But in trying to preserve history, they're losing sight of the future.

People are willing to pay for access, but content ...not so much. Content is less-valued - not just in publishing, but also pharmaceuticals with generics, with clothing and jewelry and knock-offs, etc.

Here's the thing - digitization increases profitability. Manufacturing costs drop dramatically (no physical bits), distribution costs drop dramatically (no bits, no inventory, no returns), cost of sales drops dramatically (eliminate the middle-man), and market size increases dramatically (direct to every customer on the planet, no retail constraints).

If you had all four of these factors beckoning you, why not go that way? Why not actively pursue tomorrow instead of trying to live in yesterday?

Because the greatest predictor of future failure is past success.

RIP guiding light

Nope - this is not about the TV show. Seth Godin wrote a post about making lists in business that prioritizes your goals in order to help you hone in on what's really important.

Building that list is not easy, and prioritizing it is even harder. In sales, if you had XXX additional resources (time, money, people, whatever), do you spend it on improving customer service to create lifelong customers; up-selling existing customers to grow revenue per customer; or as Seth put it, try to win game-changing deals? What's the right choice? This is why leaders get paid the big bucks.

Before Dell entered the computer business, what did the other manufacturers think about and prioritize? In all likelihood, the Compaqs, HPs, and IBMs of the world focused things like Six Sigma for process improvement. I'm willing to bet none said - "our customers deserve to get made-to-order vs. our generic models, let's rethink this." I bet there was even argument about offering a different colors or specs due to their impact on metrics, quality, cycle times, and throughput.

Why does it happen? Size matters - my theory: the farther away you get from the real intention of the organization, the less likely you are to contribute to it. It's true at the top, middle and bottom.

At the bottom, you're too close to the action and have to focus on your context and what you can control. At the top you're too far away; whatever insight you get is colored and filtered by your minions' interpretations; and worse, it's also shaped by your entrenchments - your past successes constrain your future opportunities. I'm convinced the latter is one of the greatest causes of decline in successful corporations. The middle is caught - they're too far away from the trenches to viscerally know what's going on, and too far away from top to really understand where the company's headed.

Let's face it in the business world, you don't succeed by raising your hand and asking the director "what is my motivation in this scene?" So what do you do? You control what you can, in the hopes that executing well in your microcosm will have positive effects on the world outside you. This might work in some instances, but it's not predictable, and you have to overcome the organization's natural (almost entropic) tendency to girth, which requires the ability and willingness to fight human nature.

When your small world becomes the whole world, you don't see context properly - motivation becomes about self-preservation and self-elevation vs. overall organizational success. You can be and feel righteous about your vision in your small world, you don't know if that micro-view really helps. As with the people on the factory floor at Compaq or HP or IBM, until someone (Dell) hits you on the head with it, you're mired.

Many parents in America know that they can't afford to send their children to university. Beth Breselli wrote an article yesterday at Rethinking Higher Education about Financial Aid Reform. In it she questions whether recent legislation aimed at making all student aid public will succeed or not. One of the benefits Beth cites is a simpler application form. But if we were really interested in this problem, why fix the process at all? The only reason to focus on this is because we're mired in the micro at the expense of the macro.

The problem is not who lends, who qualifies, or how the forms get filled out. The goal is to ensure every student who can attend university does so irrespective of financial situation. The easiest way to do this is to make university free (in Finland it is not just free, you actually get a stipend for being there). Assuming that's not possible (or at least the topic of another blog:-)), then start at the beginning of the process. when do parents (and students) eliminate university from consideration due to economics? I have no data to back this up, but I bet they explicitly do this during the freshman year of high school, and tacitly do it long before.

If I ran the government, I'd make it simple - once you declare your child as a dependent on your tax return, the IRS does an evaluation of your financial situation and tells you that your child(ren) are pre-qualified for financial assistance for university. There are no forms to fill out, here are the amounts and limits, don't worry - you're good - once the university accepts your child, we will automatically pay the amount based on their social security number. Every year, they update your status based on your current financial situation, if all other things are equal, you're still good. I bet many more parents would encourage their children, pay more attention to school, etc., and in the end, with minimal effort on either side, we achieve the goal and eliminate complexity, bureaucracy and cost.

Peter Drucker is in my opinion the single definitive voice in modern business thinking. I had a chance many years ago to spend some 1:1 time with him - it was the single greatest moment of my professional life. Our conversation was wonderful, wide-ranging, provocative and inspiring. This quote to the right should be the first and last words read at every meeting, planning session, review, etc. in the business world. We talked about this at length over lunch that day - business leaders need to understand the difference between management and leadership. Leadership is about subverting the natural tendency towards organizational entropy by making sure the list is correct and properly prioritized. Management is implementation.

Our guiding lights are waning. Why are most of our leaders now merely managers?

is free free?

How do you make money and still sell things for free?? Inquiring minds want to know!

I'm fascinated by these business models - one approach is to lower the price and make it up in volume (examples include SouthWest Airlines, Walmart, Costco, etc.). Google zeroed the price altogether by turning the end user into the product and the advertiser into the customer - this was the first real step towards free at scale. Now free is expected, and if you're not ad-funded, it makes it hard to turn a profit... or does it?

Seth Godin wrote about righteous indignation and avalanche opportunities this week, and Krishna asked sure free is for users, but what about publishers? All three blogs apply to business models, how you can optimize your opportunities, create scale (which requires very broad reach), and make money.

While Seth was talking about customer service in the first, I see a different kind of righteousness - "I deserve to get paid, and I'm damned if I let someone take my stuff for free!!" As Krishna argued, it costs money to sell stuff for free; it's easy to understand why people feel indignant about it. Read Seth's second post (avalanche), and you learn that your boss *really* pays attention when you can demonstrate significant reach, outcomes, growth, etc., and you begin to think - the only way for me to break through and get customers to pay attention is to sell it for free.

Do you have to overcome the mentality of expecting to get paid for what you value most? Surely its what the customer values that counts! Not everything has to be for free - people will pay for some things - but what?

If I were an artist you liked and were to offer you my music CD for free, would you begrudge me charging you $4.95 for shipping (even if it only cost $1.25 to ship)??

If I were a chef you liked and offered you appetizers for free provided you bought the main course, would you "buy" (even though you know the main dish prices include the other costs)?

If I were to give you a car for free but charge you $10/gallon for the special fuel it needed, would you "buy" the car (even though you know you'll end up paying for the car in the end)?

Is Free *really* Free?

We all *really* know that deals like this are not truly free, they're just packaging. At the end of the day, any of these organizations needs to earn money in order to pay its employees, cover operating costs, etc. We recognize and respect this because we hopefully do, and want to keep getting paid ourselves.

What about Google? When you happily use their service, you might do so because they're a great company, have a great product and try not to be evil; but have you thought about how economically successful they are? Google employs more than 19,000 employees, earns more than $20 billion/year and achieves more than $4 billion in net profits. These are amazing numbers!

Lots of people had to pay Google cash so that they could be so profitable. These same people had to get paid to be able to afford to pay Google, and you and I (end users) had to have paid them to start this process.

Free isn't free - it's just damned good marketing. Or in Google's case, a brilliant business strategy of turning the customer into the product and selling it to someone else.

Where is the next "avalanche"?? I'm thinking it has something to do with aspects of reCAPTCHA and massively multi-player games. These are both brilliant innovations that are just scratching the surface of new paradigms of commerce.

outcomes!

Have you noticed that in most big projects you're a part of, success is measured by solving symptoms instead of creating outcomes? Off the top of my head the best example of focusing on outcomes is President Kennedy's proclamation: "I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to Earth."

JFK didn't talk about how it should be done, whether we'd use rockets or levitation, whether we needed bipartisan support, or anything else that reeked of symptoms. The outcome was clear, and while many thought it unattainable in 1961, the nation (and the world) held onto the goal and found a way to make it happen.

Seth Godin's post on positive thinking has a similar feel to it. We all suffer from NIH (Not Invented Here) syndrome, our natural reaction to someone else's ides is "why it won't work" vs. "let's give it a try!" This tendency creates barriers to outcomes that can become insurmountable, because for some reason, it's easier for us to believe in "no" than "yes." It's of course much easier to say why it won't work than participate and help create the outcome. Think of every "official opposition" in politics, and even why more candidates argue against their opponent than for their own ideas.

Health care in America is one example of this. Understandably, there is intense debate on this topic - it's complex, rife with vested interests, political rhetoric, and sadly, outright lies. The difference between health care and putting a man on the moon is that the former has been around for ages, affects everyone, and has a direct effect on each of our wallets. The latter had none of those constraints. These are all of course excuses for why we can't fix it...

What if President Obama's inaugural speech had said: "We will have universal health care in America while reducing overall costs before I complete my second term as President." (Note presumptive close on 2nd term;-))

The mandate does not require that we emulate European or Canadian systems, or that we will have a public option, or that we will cut this or increase that, or anything like that. As with JFK's mandate, the "how" is left up to the experts. The only constraints are what (universal health care), when (in 8 years), and how much (less than today).

Is it possible? I think so. What would this uniquely American health care system look like? I have no idea, Would there have to be compromises? Almost certainly. Does this country have a history of rising to the occasion? Yes.

I'm reminded of the scene from (ironically) Apollo 13 - see video to the right - where the NASA team had a problem to solve. The CO2 scrubbers on the ship were damaged. The team of engineers was essentially locked in a room, given exactly what the astronauts in space had at hand, and a deadline. Guess what as in the movie, they solved it in real life too.

Having no expertise in any aspect of health care (other than being a reluctant customer), I may have some ideas, but don't know enough about medications, insurance, HMO vs. private care, the role of physicians, nurses, etc. to respond intelligently. But I think if you put all these stakeholders in a room, lock the door and give them a deadline, we might get somewhere.

If I were in their shoes, I'd start with this: the system today succeeds when more people are sick than when less people are sick. Rather than figure out how to fix health care, why not look at what it takes to create a substantially healthier America??

the expressional

Have you noticed that when candidates are seeking office they are over-the-top communicative? Driven to capture every foot-candle of the limelight, they expound about everything, including how "expoundive" they'll be when in office. Even veteran candidates (incumbents) promise transparency when elected, realizing that the electorate is dumb enough to ignore their prior acts.

Once elected though, things change. The idea that some things are better left in the hands of a few and not to be entrusted to the general public suddenly resonates. For example, (thanks to Dana) the FAA doesn't trust the public with information about how frequently flocks of birds fly into and damage airplane engines! As someone who does travel by air, I am very interested in understanding all the risks associated with travel, and then want to make my own informed decision.

Even the current Obama administration (thanks to Andrew Rotherham), despite assurances to the contrary is taking to keeping data to themselves when convenient, as in the case of the effect of school vouchers in DC.

In both cases, it was determined for whatever reason that the public did not "need to know" certain findings, results or whatever. I can see that being reasonable in certain national security situations, where the government wishes to protect a source, not publicize the ability to decipher secret conversations, or disseminating critical research. But I don't see why it applies to mainstream, everyday information.

Once in office or a position of leadership, people have a propensity for not trusting the judgment of "the people," believing the issues too complex, the analysis too esoteric, the information too nuanced to be entrusted to "them." We know only too well how often corporate executives "fail" to disclose seemingly important information, to their customers, employees, investors, or all three.

Why?

I think it's laziness (and maybe faux control). When too much information is available you give up the ability to manage and craft the message, to tell the truth vs. the most convenient story. You may also expose aspects of yourself, your image and your organization that you believe need to be kept well subterranean.

But during the hiding process (and let's face it, we've all done this), we never think about the consequences of being found out. We never realize how much worse it is to keep secrets, but also how much worse things become once you are outed vs. if you had simply come clean in the first place. When you scale this to the level of a large corporation or a powerful politician, the impact of being outed is huge.

The Communications Revolution makes this even more likely - individually people get outed all the time with something as simple as being tagged in a Facebook picture, and then the fit hits the shan doesn't it!

When corporations get outed, the ramifications are much, much greater (more fits and bigger shans), and the process is much more complex. Why? Because large organizations don't have as effective a sense and response machine as an individual. It takes time, process and politics for inputs to bubble up to decision-making layers, and then time, process and politics for them to bubble back down to the actors.

In politics, it's maybe a bit more efficient (their organizations (politics vs. government) tend to be much more horizontal), but all-too-often, the wrong people are driving the decision-making. PR and pollsters tend to have a much stronger voice than they should; they distill information into bite-sized chunks that don't have complexity and nuance (by definition). It's so easy to obfuscate complexity this way, and spin the situation to the point where strategy and integrity are compromised for expediency.

One example of this is President Bush's strident and dire warnings about how close to disaster the economy was so that he could get Congress to urgently vote to approve TARP, but then once they did approve, he realized that his warnings also had the effect of immediately arresting the people's desire to spend, which actually caused a more accelerated slow-down, made TARP less effective, and maybe caused a worse economic decline.

When running for office, you're always out there, and facing the barrage head-on. When you're in power, you're cloistered, and maybe rely more on others for that finger on the pulse. Doing that makes you more likely to agree with spin artists, and make you believe that the public really doesn't need to know everything. Town hall meetings could be a good way to do this, but in then end, they're also about creating spin, and getting a message out. Sharing, listening and responding doesn't really happen. When you're in business, the more senior you get, the more you rely on intermediaries to connect you to reality. But they have a stake in biasing your experience to accommodate their agendas, and that compromises your view of reality. Just like town halls, executive customer or employee visits are crafted - you don't get the real truth.

In the end, the more open and transparent you are, the more likely you are to have a truer grasp of reality, and make a real differences in the most sustainable and efficient way possible.

house rules

You might have noticed that I am a big fan of Aaron Sorkin and in particular the West Wing. There's this other TV show I quite like - House M.D. I was thinking today about organizational theory, how one goes about building an outstanding team, and whether they thought about that at all when they created the premise for this program.

If you're not familiar with the show, House is a brilliant but acerbic diagnostician who can solve cases others can't. He has a team of three very talented doctors who work for him, act as his foil, and create the experience of one doctor for the patient because House doen't like patients. House does have responsibilities outside of pure diagnostics (clinic duty, people-management, etc.), but if he does what he's good at, his performance (or lack thereof) in the other areas is overlooked. This even (shockingly) applies to the fact that he's addicted to Vicodin because of a problem with his leg.

The administrator of the hospital recognizes that House is a phenom, tenacious, and narcissistic problem solver; and that he is abysmal at the other parts of being a doctor, and frankly a jerk. But she also knows that without him, her hospital is less.

So she built an organizational framework (House + 3 doctors, a legal defense fund ('cause let's face it, he needs it:-), etc.), in which he can operate effectively, and where his performance is measured differently vs. the other (typical) doctors in the hospital.

Why? Because in the end, House creates profound value for the hospital, and saves lives no-one else could. The impact and benefits outweigh the "cost" of the special treatment.

Now look at any large corporation. Like most school systems around the world, large companies are infected with HR and MBA "parameters" that herald standardized performance and benchmarking, and reward micro-successes that serve only to further the careers of HR/MBA drones and "typical" performers. Anyone who is atypical is managed out because they don't have the skills to navigate the gauntlet of girth; held back because "they just don't fit our model;" or skate by hardly ever revealing the wonderful potential they have to create profound value.

When a company is small enough, the leader has the strength, confidence, vision to recognize these unique performers, grasp their value to the organization, and construct a workplace that will let them achieve. All because s/he knows where they're going, recognizes that "mundane" is the fate of a business filled with "normal," and has the cojones to flaunt the HR/MBA guidelines because of her/his burning desire to achieve greatness.

Is it any wonder that most large organizations today are devoid of soul, and almost never make a real difference?

prodding the prodders

Education is a seemingly complex beast. Everyone knows it needs to be great, there's little argument on this point. Everyone knows that this is an investment with a sure return, there's also little argument on this point. America spends among the most per student in the world, yet student performance is declining there is no argument on this. Is it really that complex - everyone has these intricate views on how to affect change - are they right? Who (beside politicians and bloggers) complains the most about declining academic performance?

It's exactly the people that have caused this problem - our very own employers, colleges and universities! How? By valuing something that no longer has value.

The original business case for an education was simple - you needed one to earn a living. The nature of your living was largely determined by the person that taught you (the master taught the apprentice who worked beside the master and then eventually took over). As the world evolved, the path to employment shifted from proficiency in a craft to an accreditation of core skills. In America that's called a High School Diploma. It's important to note that the value of this "ticket" is not set by the primary/secondary school system, but rather the gatekeepers that guard a student's next steps - employers and post-secondary schools.

One of the reasons parents send their kids to school (and willingly pay the taxes) is because it is the one step that they believe will help their children create a better life, that education is the path towards prosperity. They believe this because it is how they got to where they are, or how they saw others get to where they wish their children to be. They also want their children to be best-equipped to survive and thrive no matter what life or the world throws at them.

Employers have decided a high school diploma is critical, and will prefer candidates that have one. Colleges and universities have decided to accept students based on their high school (plus related standardized test) performance and will rarely if ever take a candidate who doesn't have one.

But. Colleges and universities complain that they have to spend millions (if not billions) to remediate students because secondary schools are not adequately preparing them for tertiary schools. Employers say the same thing - that a significant percentage of high schools students are poorly prepared to enter the workforce. Together both bemoan that fact that even when students have some basic skills, they aren't able to function well in a team setting, deal with complexity and ambiguity, communicate effectively, etc.

ASIDE:

There are schools that can and do prepare their students for the real world, and their graduates are eagerly sought out.

My two favorites - High Tech High (HTH) and Seattle Girl's School (SGS) are among these. Ask Larry Rosenstock at HTH and he will tell you this - creating a great engineer or scientist absolutely doesn't imply that you must sublimate the arts and humanities. To the contrary - it requires that you treat students like one, let them behave like one, and compel them by how much fun it is to be one. To do that, you must immerse them in the sciences and the arts and the humanities - why - because that's what real people are. You accomplish this with an integrated, project-based approach to teaching, where students are committed, respected, engaged, and critical participants in the process. Ask Marja Brandon at SGS and she'll say the same thing.

Graduates of HTH or SGS are "ideal" for colleges, universities and employers alike - they will and do run after them. Their diplomas are not generic.

The change agent - just say "no":

I've argued in the past that we must federalize education, that students are the customer, that we measure the wrong things. I must amend one of these - students are not the customer - they are the fodder. The real customers are colleges, universities and employers. Sadly they are not using their power wisely or effectively.

What if the Chamber of Commerce and Association of American Colleges and Universities decided not to accept high school diplomas anymore? What if they only employed or accepted students from schools they felt did a great job of educating, and not from all schools? Would parents happily agree to fund schools via taxes knowing that it wasn't buying their children enough?

We could start with America's largest employers - the Federal Government (including Defense), Wal Mart and McDonalds. That's only three CEOs (well, two CEOs & a President) to convince.

What if they issued high schools a once-cyle (4 years - grades 9-12) ultimatum? If the incoming grade 9 class in the high school system was not transformed this year (9-10 in Y2, 9-11 in Y3, and 9-12 in Y4), they would cease to accept a high school diploma'ed candidates. This would create an automatic ripple effect to elementary and middle schools.

Faced with dramatic cuts in funding, would schools feel the impetus to change and follow a better path? Money is a powerful catalyst. Just look at how "open" to compromise and negotiations management, partners, dealers and unions alike were when faced with the reality of GM/Chrysler bankruptcy?

The education system is not feeling similar pressure right now. We need it to. Let's all rally the biggest employers in our countries, states and towns and have the leaders of those three or four organizations help us create the change we need.

performance anxiety

How will it go? Will all my hard work be appreciated? Was all that extra stuff I did noticed and appreciated? Was I better than the rest? How often might you ask yourself these questions in life ;-) ? How often might you ask yourself these questions at work? Many of us face these questions at least once a year, during our annual reviews.

There's a fantastic conversation between Gillian (an HR professional) and J.R. about employee performance management, what works, what doesn't and whether it makes a genuine difference to both the employee and the organization. It began with an assertion on my part that when organizations grow, they begin to hire people whose abilities and intent only create micro-outcomes. In and of themselves, these micro efforts might achieve (or indeed exceed) their individual objectives, but there's no assurance that they aggregate up to something meaningful for the business as a whole. Sometimes (perhaps too often) they can even detract from the mission. The micro-performers exist because there is supposedly a role for them to play in a big company. Convention dictates that one must have a lot of microbes (sorry) buzzing around doing all sorts of micro-work; it emerges when an organization gets to a certain size and starts believing that it needs microbes because it is now "big" and must have girth (only they call it "gravitas").

About four months ago, I suggested that there was a way for an organization to avoid girth/gravitas and reduce its microbe quotient by focusing on being great vs. growing bigger. But I conveniently ignored performance and compensation. This is of course the subject of many organizational behavior PhDs and I don't presume to know anything, so here goes :-).

Harvard Business Review recently talked about The 10 Most Common Failures of Bad Leaders - see adjacent table. First, wow! Who hired these rubes? Second, not sure about you, but it looks pretty consistent with the failings of non-leaders doesn't it? But since these are "leaders" the failings are even more severe, and in need of more urgent remediation (vs. the peons). So my first take is that this is a really big and hairy problem - it's not simple, it's not clear what the answers are, and it's also more likely that your management is fumbling and bumbling with this. First implication - scary!!  Second and more critical implication: it sucks to be you...

Performance management in smaller companies is simpler - "if the company does well, we all do well (and vice-versa)." It can also be easier to identify the strongest (and weakest) performers and do the right thing.

Some argue that compensating sales people must be done on a short-term revenue basis. I suppose that's true, but it really depends on the business. If there is value to be had from maintaining a customer relationship over time (not always the case) and creating a long term revenue stream for your company, then here's a way to reward those that do best by you and your customers over the long term. But what about the rest of the organization? How do we reconcile team output with individual recognition? Herein lies the apparent rub...

Some of the challenges include employee morale and output; recruiting ability; rewarding your best people and remediating (or culling) your worst; and recognizing that you need both leaders and workers and that both are critical to success.

Scary as this is for me, what about the model the US Armed Forces use? Their total compensation plan is completely laid out, transparent, and visible to everyone. You know exactly where you stand and what you can hope to accomplish either by level growth or tenure. There is also clarity about what you need to do to move from level to level, and the decision to stay at a given level because you happen to like what you do doesn't seem to have as big a stigma as it does in the private sector.

Now what if you combined this clarity with a bonus matrix based on percentage of salary by level (but not by tenure) that is tied to a published company-wide goal of performance. (Example - 20% of our year-over-year revenue growth will be allocated to bonuses" - we will all benefit from our mutual success - we're a team.) And what if there was no individual recognition model (other than promotion) whatsoever? The implication - those people that need individual recognition, and must be anointed with "superstar" status will leave because "they've outgrown you." Hmmm... is that so bad? How often is true and lasting value created by these people? How often do they end up compromising team chemistry?

Would you want to work for a company that was only measured on how the team did? It works for smaller organizations (which common wisdom says are the most efficient and effective and resilient part of our economy) - doesn't it?

I would.