How to Make Sure Your Organization is Constantly Getting Better: Part 2

In Part 1 of this series I shared a couple ideas people within organizations need to have to make ongoing transformation a reality: “knowing the difference between working in and working on your organization” and an “appreciation for complexity.”

The more everybody in an organization understands those two concepts, the easier it becomes to experience the type of growth that’s required for orgs to survive and thrive in the world today.

To expand on this, I’m going to share two more concepts that are central to the overarching goal of creating an adaptive and constantly improving organization: Growth Mindset and Being a Theory Y Person.

Growth Mindset

Growth mindset has risen in popularity over the past few years as the research of Carol Dweck and her associates has become more widely read and applied.

Dweck argues there are two overarching ways of thinking about cognitive and intellectual abilities.

  • Some folks think they were born with a certain amount of intelligence, and no matter what, there’s not much they can do to expand that initial stock. As such, they tend to become very concerned about situations or environments that might demand more from them intellectually than they think they can handle. These situations are scary because failure means showing the world they are incapable, and will always be incapable. Therefore, they become very risk averse and vigilant about how they are perceived by others. Dweck calls this a “fixed mindset”.
  • Conversely, other folks think about their intellectual abilities similarly to how most people think about physical abilities. These people believe that with deliberate training and experiences outside their comfort zone, they will grow and expand their capacity for intellectual work (the same way muscles get stronger when they are worked out). With this belief serving as their foundation, they actively seek out risky (in the sense of potentially not being able to meet expectations) situations because they know it’s the only way to grow their capacity. Setbacks are not seen as threats to their identity so they are more likely to bounce back. Dweck calls this a “growth mindset”.

In an organizational setting, the more people who have growth mindsets, the better.

Organizational change and transformation is a process that requires failure. It is impossible to improve your organization without also experiencing copious (and, fingers crossed, relatively minor) failure. The best organizations are the ones that are constantly learning from their environment — changing shape, structure, and process to better take advantage of the opportunities, or mitigate the risk they are facing.

The idea of failure is inherent to learning.

Very few people are able to ride a bike flawlessly the first time they try. Likewise, organizations cannot operate flawlessly 100 percent of the time; if they are, that means they aren’t testing the edges of what’s possible — in other words, they are staying completely static.

Given this reality of omnipresent failure, it helps to have a bunch of people who are able to harvest lessons from failure in your organization: people with growth mindset.

Theory X & Theory Y

In the 1960s, a management professor named Douglas McGregor put forth a theory of human behavior and motivation he described as “Theory X and Theory Y.”

  • If you hold a Theory X belief about people, then you believe a couple of things: People are inherently lazy and will only work under threat of punishment or promise of reward, people will avoid work if left unsupervised, people have no ambition, and people are fundamentally individual-goal oriented.
  • If you hold Theory Y belief about people, then you have different ideas: People are intrinsically motivated, people enjoy working, and people strive to better themselves without direct reward or punishment.

It’s not hard to see how management styles would differ based on what managers believe about their employees.

Managers who believe their people are Theory X tend to micromanage, install many rules and processes, and generally not trust people to use their knowledge or experience to make decisions. Managers who believe their people are more Theory Y are more likely to trust their employees to figure things out on their own, give them autonomy to make real decisions, and allow them to take meaningful action.

Organizationally, Theory X workplaces consume a lot of energy that could be better spent elsewhere. Overseeing and babysitting employees who won’t work unless they are being poked or prodded consumes a lot of energy. Managers are constantly creating policies that restrict autonomy and looking for ways to extrinsically motivate people to do the right thing. Additionally, the latent energy that exists for teams and individuals who want to do meaningful work is squandered and reduced. A Theory X organization simultaneously expends a ton of energy trying to keep people in line and squashing any possibility of productive energy being applied toward something useful.

Theory Y organizations, however, free up energy that would otherwise be dedicated to micromanaging employees. When managers and leaders in an organization don’t have to spend their time and attention manipulating people into doing work, they suddenly have more time and attention (or organizational energy) to do more useful things. Similarly, employees in a Theory Y environment can spend less time butting against the confines of oppressive management behavior and instead have the autonomy to actually bring more of themselves to work. In a world where prediction and control are becoming more difficult, the only way an organization can stay nimble enough to react and grow is if it’s filled with Theory Y people; who actually believe that everyone else is Theory Y, too.

If you’re reading this and thinking to yourself, “It must be nice to have Theory Y employees — I know for a fact mine are Theory X,” then I’m sure everything I’ve written to this point seems like pie-in-the-sky fantasy land.

However, research has shown that people are incredibly adept at sensing the beliefs of their managers and adapting their behavior to match those expectations. If you are holding to Theory X beliefs, your people are likely to sense that and will act accordingly. This, of course, strengthens your beliefs and perpetuates an extremely depressing negative feedback loop.

Being the first leader in a Theory X environment to decide to do something differently, to change your belief about your employees to Theory Y, is a monumental and courageous step. There is always a lag between that decision and the change in behavior that you’re hoping to see. It’s uncomfortable. But it’s also the only way to begin shifting the larger culture away from one where people are treated like inmates to one where people are treated like inherently valuable, trustworthy, and autonomous people.

Putting It Together

The future I postulated in Part 1 of this series, where organizational design consultants are suddenly made redundant and I spend my early retirement managing a llama farm, isn’t born out of my love for llamas.

Instead, I firmly believe that the reality I described in these two articles is what’s going to separate the organizations who thrive in a world full of complexity and uncertainty (which our world currently is, and is becoming more so every day) from the organizations who struggle and ultimately fail to adapt.

Right now the organizations who truly “get it” already have these capabilities (a willingness to work on as opposed to in the organization, an appreciation for complexity, primarily people with growth mindsets, and a pervasive Theory Y belief about people). The ones who are trying to “get it” hire us. And the ones who don’t get it at all, are struggling and disappearing.

Which organization are you?


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