Photo by Cristian Escobar

Why we treat employees like adults

and the trade-offs this entails

🌍 Context

In a world that is increasingly volatile, uncertain, complex, and ambiguous (VUCA), different organizational structures and processes are proving to be helpful than they have been in the past. In the comparatively stable mass markets of the industrialization era, optimizing for efficiency was the name of the game. Division of thinking and doing in static power hierarchies — aka scientific management or Taylorism — was the predominant org structure and has remained so to this date.

This structure and its accompanying processes are, however, no longer the best fit in VUCA markets. These markets are non-linear. There are no root causes. Cause and effect can be understood in retrospect but not predicted in advance. Consequently, VUCA rewards organizations that optimize for adaptability instead of efficiency, favoring those that react quickly to changes in the market and individual preferences of its customers.

🎯 Why it ‘makes sense’

In choosing how to operate as a company, we aim to maximize worker fulfillment, as well as impact with a profit. We want to create a company that is both more humane and more productive.

• Worker fulfillment: People have moved up on Maslow’s hierarchy of needs. It’s no longer enough for employers to provide a stable income in exchange for people’s time. They want more. They look for meaning, community, and self-actualization in their work. Religion used to fulfill these needs but continues to become less relevant as society progresses.
• Impact with a profit: We see business as a way to have an impact in the world — to affect a change that we would like to see become true. By providing value, we can make a profit that allows us to have even more impact. Profit doesn’t have to be malicious and filthy — it can be part of a virtuous cycle.

🧑 What we mean by ‘treat like adults’

• Self-organization instead of command & control: Decentralize decision-making and push it close to the market. Involve everyone in the process. Involve the market in the steering. Get rid of sign-offs that lead to cover-your-arse behavior.
• Transparency instead of information as power: Make all information available to everyone at the same time. Get rid of selective information sharing that can be used as a tool of power by an elite few.
• Leadership by communicating intent instead of tactics: Communicate intent and let people figure out themselves how to achieve it. Understanding the ‘Why’ enables people to react autonomously when things turn out differently than anticipated. No more passing information up-the-ladder only to receive untimely and unfit solutions from detached leaders.

🏆 Benefits

• Intrinsic motivation & fulfillment: Based on the findings by McGregor (Theory Y, 📖 The Human Side of Enterprise), we assume that people are intrinsically motivated to do great work. Not because we bribe them to do it, but because work is rewarding in and of itself. By treating people like adults as described above, we give them autonomy, which according to Daniel Pink (📖 Drive, 🎤 Ted talk) is one of the main factors that motivate people. By doing so, we enable people to find fulfillment through their work.
• Entrepreneurial thinking: By giving people all information and shared accountability paired with a purpose, they actually care about, we foster entrepreneurial thinking. Not everyone has the mindset of a founder, but when put in the right environment people show much more business-minded thinking than they are enabled to in most companies.
• Responsible behavior: By enabling people to influence any decision within the company, we remove the victim role, where people blame others for their current circumstances. This requires assuming ownership of one’s life and dealing with uncomfortable emotions which threaten one’s self-esteem.
• Innovation: According to this Harvard study (and made popular by Google’s project Aristotle), the most significant factor in team performance is psychological safety. When paired with cognitive diversity, teams become faster in problem-solving resulting in more innovative solutions.

🏅 The other side of the coin

To reap the benefits described above when treating people like adults, organizations need to figure out mechanisms for self-organization. This includes

1. Shared leadership where people take responsibility for the achievement of a goal and attracting others to volunteer their efforts. We aim for a fluid, multi-dimensional power hierarchy optimizing for collaboration that is based on consent and benefits all.
2. Decentralized decision-making that moves decision-making authority to the information and enables those that feel a sense of urgency to take initiative. This avoids decision bottlenecks and allows for decisions being made quickly where they are needed.
3. Shared accountability: As described in Beta Codex (📖 Organize for Complexity), this can be reached without central control mechanisms by social pressure through (1) small groups with (2) shared goals and (3) access to all information that (4) are comparable.
4. Advanced communication skills like

• Active listening: Listen with the intent to understand instead of waiting for the moment to respond. A 2-step-process for how to listen: (1) Don’t talk. (2) Don’t think about talking.
• Empathy: Empathy is a skill that can be developed and it is immensely helpful in understanding oneself and effectively communicating with others.
• Nonviolent communication: Focussing on observations (without judgment, evaluation, or blame), feelings (and owning them), needs (instead of interests) and requests (instead of demands) when talking to each other is helpful to communicate compassionately.
• Direct conflict resolution: Conflicts are resolved by the involved parties, not outsiders (with the help of a mediator if necessary).
• Peer feedback: Feedback is an essential ingredient for improvement and growth. The most impactful feedback comes from close collaborators and people I look up to in my area of expertise.
• Stewarding: A steward supports individuals through guidance on how to use the organization as a platform for their personal and professional growth that results in win-win situations.

⚖️ Trade-offs

The benefits described above come with some trade-offs to consider.

• The tragedy of the commons: This systemic behavior describes a situation when people’s short-term selfish interests are at odds with long-term group interests. This results in overuse of common resources, e.g. company funds. Possible solutions include regulation, e.g. through the company acting as investors for the teams within it, or internalizing externalities, e.g. through teams funding shared resources like office space. Groups that avoid the tragedy of commons and thrive implement Ostrom’s core principles (📖 Governing the Commons)
• Interaction fatigue: Communication structures in a network (net) are more complex than in a hierarchy (tree). The higher involvement in decision-making for each person comes at the cost of higher communication efforts. This results in less focus on one’s key area of expertise. Avoiding interaction fatigue while leaving the option to influence everything requires individuals to prioritize their own work. Not overloading oneself with side-topics requires letting go of topics that are not essential as well as trust in others to take care of issues they are better equipped to solve. Keeping groups small and autonomous supports this behavior.

This — simplified — together with all other concepts on this blog is nicely bundled up with 88 visualizations, 37 videos, and 11 templates in my New Work by Design Transformation course. Helping you put New Work into practice for less than the price of a consulting day.