JD Martin

Frightening Realities That May Be Blocking Your Organization’s Success

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Sobering trends indicate that up to 50% of employees in the US feel that their organizations treat them like prisoners. Showing up to work in fear diminishes team productivity and the health of your organizational culture. Fear of loss of status, power, money or influence causes even worse business problems every day. The Gallup Inc. research consultancy investigated about a dozen organizations that reported serious problems, including increased turnover, falling employee morale and unhappy customers. These disparate operations included a bank, a manufacturer, a hospital and a retail store. Their particular problems varied, but common threads emerged.

“You can’t win in the marketplace unless you first win in the workplace.”

Each one of these firms operated strategically, executed well and tried to meet its employees’ needs. Yet limiting factors – or “barriers” – within each structure interfered with progress, efficiency, and profitability. No matter how individual organizations defined their blockades, the problem always boiled down to fear. In whatever way fear manifests, it makes its environment more bureaucratic and less efficient, robs employees of energy, and erects walls that separate people. Walls may serve the limited interests of certain internal groups, but they undermine a firm’s overall mission and focus.

“A company’s worst enemy is not always the competition. Sometimes it’s the fear that lives within its walls.”

Organizational Fear

Organizational fear is a socially-constructed phenomenon. But, since people create it, they can get rid of it. When they do, operations and profits improve, along with sales, morale, employee energy, turnover and customer satisfaction. Internal barriers that transform firms into destructive bureaucracies arise mostly because people working in organizational structures let fear rule their actions. The presence of fear indicates various problems, including “red tape, interdepartmental conflict, inefficient processes, restrictive policies, or too much or too little information.”

“Expectation is powerful. It doesn’t take long for people to feel entitled to what they have and become worried about losing it.”

When hired to solve such problems, Gallup Inc. carefully reviews all of the client organization’s “policies, practices, and procedures.” Consultants then conduct extensive companywide interviews, discussing the firm’s working with everyone from the CEO to frontline workers. Gallup often finds that the most harmful fear is the “fear of loss,” stemming from workers’ “endemic sense of entitlement.” Team members who feel they deserve certain advantages – “pay, a bonus, a promotion, decision rights, a big office, headcount or a budget” – will do almost anything to protect their edge, even if their actions cripple their organizations.

“When managers make every decision, they essentially perpetuate a parent-toddler dynamic.”

Expectations and Entitlement

Psychologists and organizational behavior researchers Daniel Kahneman and Amos Tversky developed the “prospect theory,” which holds that feelings of entitlement are so strong that being forced to give up a particular benefit is far more painful than the joy of first receiving it.

“Low empowerment, despite high levels of accountability, is a serious barrier that exists to some degree in virtually all organizations.”

Kahneman and Tversky found that the exact nature of the entitlement doesn’t matter. The significant factor is the individual’s expectation of having it. If people anticipate a benefit, they will – impelled by fear of loss – go to great lengths to ensure that they get what they expect. This includes erecting barriers within their organizations, even when it is evident that such obstacles hamper everyone’s work. When it comes to choosing what is right for themselves and what is right for their organizations, most employees prefer self-interest – to protect themselves. As a result, fear barriers arise quickly within organizations, which then “become stuck” in various ways and suffer accordingly.

“When threatened, people’s natural inclination is to fight or grab what they can and run – fight or flight.”

Empowerment and Accountability

Fear limits empowerment and accountability. In 2007, Gallup researched these two aspects of life in the workforce by studying 2,634 working adults in the US. The survey found that workers fall into four categories when it comes to empowerment and accountability:

“Ultimately, parochialism, territorialism and empire building make a company less successful, less able to innovate and more prone to high levels of internal distrust.”

1,   “Top performers” – These workers feel fully empowered in their jobs. They work according to stated goals and metrics. Their organizations hold them responsible for their actions. About one out of four US workers fall into this category.

2.   “Loose cannons” – These workers have great authority, but almost no responsibility. They can do whatever they want at work. They make up 21% of US workers.

3.   “Broken spirits” – These employees are accountable for what takes place in their areas of responsibility but have no or little authority; 5% of US workers fit this group.

4.  “Prisoners” – These workers have zero authority. They must obey continually shifting rules and operate under subjective accountability standards. A shocking 50% of US workers fall into this category, many of them ruled by fear.

Organizations with fully empowered, engaged employees who adhere to clear accountability standards are far more productive and profitable than those firms which treat employees like prisoners. Organizations with committed staff members are safer, more enjoyable places to work; innovate more profitably; and enjoy excellent employee retention rates. They also experience better earnings per share.

Bureaucracy’s Building Blocks

Engagement is a primary factor that differentiates successful, profitable organizations. It precipitously declines in firms ruled by fear. Bureaucracy is a by-product of such fear. Gallup determined that the typical engagement factor for top performers is in the 87th percentile, while prisoners at the other end of the scale operate in the 8th percentile. To understand bureaucracy’s fearful qualities, visualize a pyramid:

  • “Parochialism” – This is the base of the pyramid. Many managers develop policies and rules that further narrow their departmental concerns. These rules often are at odds with the firm’s interests; they function as walls that separate departmental employees from others in the organization. Department managers and their staffers often pay more attention to their parochial interests than to the organization’s primary goals.
  • “Territorialism” – This is the center of the pyramid. Individual departments vie for “resources, budget, IT initiatives and headcount.” To deal with this competitive stress, some managers exert control over every aspect of their departments’ operations and erect walls to protect their interests.
  • “Empire building” – This is the apex of the pyramid. Managers control what takes place in their departments. Any need to deal with other departments – which also operate as separate fiefdoms with their power bases – can unnerve managers. Driven by fear, they strive to extend their influence throughout the organization by building empires.

“A company can have as many cultures as it has workgroups.”

To eliminate parochialism, get rid of shortsighted rules that make life easier for only a small segment of your organization. For instance, one firm refused to reimburse rental car expenses unless the employee needed to drive the car at least 50 miles. To get around this, employees circled their drop-off airports until their odometers passed the 50-mile mark. Audit and adjust pointless rules that interfere with efficiency. Communicate every change companywide. Every rule should further the attainment of organizational goals and outcomes.

“When no one owns a rule, no one is accountable for deciding whether it’s good or bad.”

To eliminate territorialism, increase empowerment. Use surveys to learn what elements restrict empowerment. Under the reign of territorialism, administrative tasks steal valuable time and make it hard for people to complete high priority tasks. Having too little time limits empowerment. Reduce administrative tasks whenever possible. Ask employees how much time they need to achieve necessary work and give them the support. Create more open channels of authority to share power. Communicate a shared mission so employees feel comfortable making decisions based on fulfilling a stated purpose.

To eliminate empire building, consider four areas where empire-building executives usually encroach:

  1. “Information” – Leaders think they can ensure self-sufficiency for their departments by “seizing control of information sources.”
  2. “Budget and resources” – Funds and resources always are limited. Empire-building executives try to confiscate money and resources generally allocated to other groups.
  3. “Decision rights” – Decision makers have the most power within organizations. Empire builders play politics to become the decision makers in areas that other executives and managers formerly controlled.
  4. “Supervisory rights” – The more people someone supervises, the bigger the empire.

Deciding who controls what is not easy; figuring it out requires the right decision calculus. Perhaps your organization can centralize information, resources, and decision and supervisory rights. If that’s not feasible, keep politics out of managerial choices about areas of authority. Assign control to managers based on defined criteria, including enhancing financial performance, making the workplace better, improving customer relationships, reducing liability and steering clear of risk. Instead of short-term tactical thinking, make overall, long-term strategizing your primary planning style, and base assignments on your organization’s mission and values.

Two Types of Courage

Researchers Shane Lopez and C.R. Snyder developed the organizational concepts of “vital courage” – the steps people take to defend their survival – and “moral courage” – what employees do on behalf of their organizations rather than themselves. In companies stymied by fear barriers, leaders often expect staffers to demonstrate “moral courage at the expense of vital courage.” That is, they expect employees to sacrifice for the company, and to put it above their well-being with no commensurate reward. Instead, leaders should establish conditions under which employees feel motivated to be morally courageous. Do this by providing incentives for both self-interest (vital courage) and self-sacrifice (moral courage).

Insecure leaders undermine courage in others by attempting to maintain control and by intimidating their staffers. Such executives are inconsistent, blame others and play favorites, often rewarding subservience. 

To encourage enhanced influence, focus decision making in your firm on achieving the organization’s overall purpose. Keeping the mission and values foremost establishes proper priorities and promotes courageous thinking. Backing decisions with “objective, timely and accurate metrics” helps determine the best steps for moving forward productively.

Once in place, parochialism, territorialism and empire building may appear invincible and indestructible. Note: these barriers are socially constructed. They went up brick-by-brick and can come down the same way. Insightful leaders must see beyond fear to identify the discrete steps that built barriers and then take them down. Once organizational leaders recognize causes, they can eliminate the obstacles. This will make some people uncomfortable; some barrier builders may feel thwarted and leave the organization.

Leaders should manage when they must and extend empowerment and opportunity to employees in all other engagements. Organizations that free themselves from fear can be wonderful places to work: free of turf battles and governed by policies, procedures and practices make sense and culminate in achieving significant, profitable goals.

Interested in assessing your team’s culture and strengthening communication across your organization? Contact me to set up a free consultation. 

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