Internal employee view vs external business view of a company

Internal employee view vs external business view of a company

Employees’ understanding of what a company is all about, is very different to the market’s understanding of the business. This is because employees have an idealistic view of the company, whereas the financial markets take a commercial view of the company.

An example of the non-idealistic business perspective, is the commonly held view that the only ideal that a business should have is to increase its profits.

There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

https://en.wikipedia.org/wiki/Friedman_doctrine

Although this is a healthy perspective as far as investors are concerned, thinking that the only goal of the company is to increase its profits, would very quickly demoralise the most enthusiastic company woman or man. Employees have the need to believe in a higher purpose in their daily tasks, other than making money for the company’s shareholders.

In response to this need for professional self-respect, companies create an internal world in which there is inherent pride in doing your job. Management organises the company in a way that if everyone does their job well, then the company will be financially successful. Employees do not need to ponder over the financial significance of their work, however.

Let me once again emphasize that instilling feelings of pride in your employees is an essential part of the environment that stimulates them to do their best.

Pride in who I work for, or pride in my company, is the first and most important. It is having the feeling that where you work is a good place, that it makes a product that is good, and that it is one of the best, or the best in their industry. It is feeling good when you tell someone where you work.

Pride in what I do is the feeling that my job, and especially how I do it, makes a difference… It is a feeling that you stand out in your profession. It is knowing that you are doing the best of the best.

The Workplace Family: A Framework for Getting the Best From Your Employees, page 85

https://books.google.com/books?isbn=0557885086

 

Context for accomplishment

To create an internal company world where professional pride is insulated from the financial evaluation of the company’s work force, the following elements must be present:

  • Feeling of goodness: Employees must have a good feeling about the products or services that they produce. In other words, employees must feel that the goods or services that the company produces are inherently good and desirable. If employees feel proud of the goods or services that they produce, then they will feel good about their share in making this result possible, without having to think about the financial evaluation of their productivity.
  • Professional pride: Employees must feel proud that they are doing professional work which requires their unique skills, talent and knowledge. If employees feel pride in their work, then they will gain a sense of professional self-respect, without having to think about the financial value of their skillset.
  • Recognition and respect: If employees feel that their contribution to the company’s success is recognised, this will motivate them to succeed, without having to view themselves as the cause of the company’s profits.

The basic ingredients for developing a healthy internal company work-attitude are respect for the company’s products, respect for the skills needed to turn out the company’s products and recognition of employees’ part in creating the company’s products. Together, these attitudes create a self-contained world of striving and accomplishment, which insulates employees from the commercial evaluation of their activities.

 

Paradigm translation

The market’s perspective of employees’ work is very different to the perspective of the employees who do the work. The market evaluates employees’ work from a commercial perspective, however employees assess the value of their work according to its inherent usefulness and goodness.

To be successful, companies must respond to the market’s commercial expectations, and also foster an internal work-environment of striving and fulfillment in which employees can feel good about themselves because of their accomplishments. For this to happen, the company’s leadership must translate the commercial pressure on the company into internal dynamism, and also align the company’s internal creativity with the commercial expectations placed on the company.

In 2004 Drucker said, “The CEO is the link between the Inside that is ‘the organization,’ and the Outside of society, economy, technology, markets, and customers…”

My experience validates Drucker’s observations, and my actions since those early days and weeks have been consistent with them… Over time I’ve come to see the power in Drucker’s words about linking the outside to the inside…

The CEO is uniquely positioned to ensure that a company’s purpose, values, and standards are relevant for the present and future and for the businesses the company is in. The CEO can and must make the interventions necessary to keep purpose and values focused on the outside. To sustain competitive advantage and growth, he or she must create standards to ensure that the company wins with those who matter most and against its very best competitors.

https://hbr.org/2009/05/what-only-the-ceo-can-do

True leadership requires emotional involvement and inspired guidance within the company’s internal world, combined with forthright and astute business practices when selling the company and its products.

By translating commercial pressure into internal inspiration and internal inspiration into financial results, managers can be popular with both staff and investors.

 

 

 

work-life integrated success

Integrating personal and career success

Integrating personal and career success

Getting a job and earning money do not always guarantee that you will enjoy a life of satisfaction and happiness.

‘The paradox of prosperity’ (1999), a paper prepared for the Salvation Army by the Henley Centre, argues that although material prosperity is increasing in western society, the chances of a fulfilling life are decreasing. By 2010 more people will experience life stress, fewer people will find satisfying relationships, fewer people will feel secure and ‘safe’ and fewer people will be able to meet the conditions for self-actualisation.

BTEC National Health Studies, page 302

https://books.google.com.au/books?isbn=0435455192

This is odd, as it would seem that if you are financially successful and earning money that you can spend on the things that are important to you, then your earning power will automatically strengthen your personal life. Are career involvement and success in your personal life fundamentally incompatible, or is it just a question of finding the right balance?

High-energy and low-energy states

The way that we feel and think at home is very different to the way that we feel and think at work. At home we are in a relaxed, low energy mode. Our office mindset, on the other hand, is high energy and focussed. Over the course of 24 hours, we oscillate from our serene low-energy home mindset to the high-energy office mentality, and then back to our low-energy state when we go home.

The journey to work is not only a physical transportation, but also a psychological transformation from the home persona to the work persona. In her book Home and Work (1996), Christena Nippert-Eng described how people go through a set of rituals to move from their home mentality to their work mentality. The separation between home and workplace is not just a spatial one; the two environments correspond to two social identities. Nippert-Eng’s respondents had elaborate techniques and habits to shed their home mentality in the work and get into the work mentality, and then leave the professional mode behind them in the evening to resume their private persona at home. These practices could be as simple as putting on specific clothes for each environment, reading the newspaper, drinking coffee or having beer at the end of the day.

Digital Anthropology, edited by Heather A. Horst, Daniel Miller, page 133
https://books.google.com/books?isbn=0857852922

This constant change is healthy and refreshing. On the way to work we psyche ourselves up into the high-energy office mentality. When we get back home, we unwind, tell over amusing anecdotes from the workplace and  laugh at office frustrations. Our down time at home rejuvenates us for another day on the office and our energetic work life provides the impetus for us to progress with our personal lives.

Is there something that can disrupt this healthy cycle; so we become unable to bring our relaxed home mood to the office, or we become unable to bring our work energy back home?

Uneven energy

By nature, we are complex beings and display the different facets of our personalities in different situations. For example, sometimes we enjoy having fun, sometimes we engage in intellectually stimulating activities and sometimes we enjoy providing guidance to others and helping people out.

All the world’s a stage
And all the men and women merely players
They have their exits and their entrances
And one man in his time plays many parts

As You Like It, Act II, Scene VII – William Shakespeare

https://www.poets.org/poetsorg/poem/you-it-act-ii-scene-vii-all-worlds-stage

However, the high energy attitude we assume at work may positively exclude us from involving all aspects of our personalities in our jobs. For example:

  • The manager who is trying to explain his point of view at a board meeting is probably not thinking about finding oneness with nature.

 

  • The share trader who is trying to determine the market direction is probably not thinking about playing with their kids.

 

  • The tour guide who is happily displaying local history is probably not thinking about how they will pay off their mortgage.

Subsequently, in the course of going about our work, we may encounter the following circumstances.

  • Our job only involves specific aspects of our personalities.

and

  • We move into a high-energy frame of mind in order to meet the challenges of doing our jobs.

so that

  • We become unevenly energised; the parts of our personalities that we activate at work, become stronger. But the parts of our personalities that we do not need at work, are forgotten and left behind.

Becoming trapped in your work mindset

The healthy oscillation between your low-energy home mindset and your high-energy frame of mind, depends on your ability to reset back to your old, natural self, when you go back home.

However, if only one aspect of your personality is involved in your work, then work pressures may push you to consistently think and feel in a particular way.

If this happens, then even when you go home to relax, your thoughts and feelings will tend to follow along the same lines that you are used to at work. Subsequently, you will be unable to escape from your work mentality, as your personality will start to become centred around the feelings and thoughts that you experience at work.

Conclusion

Due to the increasing role specialisation of the modern workplace, it is likely that your job will place pressure on you to adopt a particular attitude and act in a particular way at work. However, this does not necessarily mean that you want to become “that type of person”.

If you are objectively aware of the persona that you project at work, you will be able to ensure that when you return home, you can take off the “work clothes” that you wore during the day, and reset to your simple, natural self.

knowledge creation strategy

Knowledge creation strategy – creating an intense learning environment

Knowledge creation strategy

Theory of the Firm and knowledge creation strategy

When devising a strategy for the future growth of a firm, it is initially necessary to decide how to view the current state of the firm. The Theory of the Firm provides various perspectives that firms can be analysed from.
For example, the Product Based View of the Firm states that the products that a company produces are its primary differentiator. In this case, strategy consists of dominating specific product markets.

The strategic objective in the PBV (product based view) is to dominate in a product or service market. Firms are able to dominate when they have the best understanding of the industry, particularly the opportunities and threats that are emerging.
… The PBV (product based view) of strategy asks what it is that the firm must do to dominate in its selected industry. Pursuit of these answers is expected to generate the most desirable internal configuration.
Governing Transformative Technological Innovation: Who’s in Charge?
https://books.google.com/books?isbn=1781951004

On the other hand, the Resource Based View of the Firm states that a firm’s capabilities are its primary differentiator. Therefore strategy consists of applying the firm’s capabilities in the most effective manner possible.

Resource based theory sees the firm as a collection of assets, or capabilities… The success of corporations is based on those of their capabilities that are distinctive…

Business strategy involves identifying a firm’s capabilities: putting together a collection of complementary assets and capabilities, and maximising and defending the economic rents which result…
https://www.createadvantage.com/glossary/resource-based-view

Knowledge Based View of the Firm

The Knowledge Based View of the Firm (KBV) is a specialisation of the Resource Based View, which posits that the primary competitive advantage of a company lies in its knowledge. This perspective is particularly relevant to companies that rely predominantly on human capital and know-how, such as financial services and high-tech companies.
The knowledge-based view of the firm argues that the products and services produced by tangible resources depend on how they are combined and applied, which is a function of the firm’s know-how. This knowledge is embedded in and carried through individual employees as well as entities such as organization culture and identity, routines, policies, systems, and documents.

The knowledge-based view of the firm posits that these knowledge assets may produce long-term sustainable competitive advantage for the organization because knowledge-based resources are socially complex to understand and difficult to imitate by another organization (Alavi & Leidner, 2001).

Strategic Knowledge Management Technology, page 55
https://books.google.com.au/books?isbn=1591403367

However, assuming that knowledge is the primary differentiator of a company can make it difficult to identify a future growth strategy. There does not seem to be any way to guarantee the invention of commercially useful knowledge within a company and there is nothing to prevent the smallest company from making a discovery that is crucial to the entire industry.
In other words, how can a company position itself to be the repository of knowledge that does not yet exist?

Due to this problem, some researchers have come to the conclusion that it is not possible to create a strategic growth plan that is based specifically on the Knowledge Based View of the Firm.

Given the current theoretical perspectives on knowledge, KBV (knowledge based value) is not yet a theory of strategy (i.e., a theory that links independent variables to a specific conception of firm performance) that goes beyond the insights provided by the resource-based view and the related dynamic capabilities approach.
…Similarly, the empirical literature suggests that it is unlikely that we have a new theory of organization, given that internal and external knowledge transfer processes are not appreciably different (i.e. there is no way of localising knowledge creation within the firm).

Knowledge-Based View: A New Theory of Strategy?
www.uhu.es/alfonso_vargas/archivos/Eisenhardt%20y%20Santos-2001.pdf

Hence the question arises, is it possible to determine a company structure that is optimised for the creation and application of new knowledge?
The following are some ideas for encouraging creativity and retaining inventive talent.

Emotional complexity

Due to the need for social crystallisation and operational predictability, corporations often encourage an emotionally simple and homogenous environment.

Corporate homogeneity – All business verticals and functional components can achieve a homogeneous ambition and approach if their aspirations and perceptions are well guided. A vision document provides the required homogeneity. All stakeholders can perform with better zeal if they connect to a common purpose provided by the organization’s vision.
Strategic Planning, Execution, and Measurement (SPEM): A Powerful Tool for CEOs, page 8
https://books.google.com.au/books?isbn=1466567465

However, predictability is the antithesis of innovation. People with a predictable work-habit are likely to think predictably as well. The passion of intellectual accomplishment can only be cultured in an emotionally complex environment that does not scale down diversity, variety and expressiveness.

Creation lies at the edge between order and chaos. Requisite variety helps a knowledge-creating organisation to maintain the balance between order and chaos. An organisation’s internal diversity has to match the variety and complexity of the environment in order to deal with challenges posed by that environment.
SECI, Ba and Leadership: a Unified Model of Dynamic Knowledge Creation, page 28
https://www.ai.wu.ac.at/~kaiser/literatur/nonaka-seci-ba-leadership.pdf

Intellectual excitement

Foment an atmosphere of intellectual excitement that incorporates mind, body and spirit. All of these are required input for new knowledge creation.

Knowledge is created in the spiral that goes through two seemingly antithetical concepts such as order and chaos, micro and macro, part and whole, mind and body, tacit and explicit, self and other, deduction and induction, and creativity and control.

SECI, Ba and Leadership: a Unified Model of Dynamic Knowledge Creation
https://www.ai.wu.ac.at/~kaiser/literatur/nonaka-seci-ba-leadership.pdf

Knowledge-outcome ownership

Encourage people to feel ownership of the outcome of their knowledge.

The Mac team had a complicated set of motivations, but the most unique ingredient was a strong dose of artistic values. First and foremost, Steve Jobs thought of himself as an artist, and he encouraged the design team to think of ourselves that way, too. The goal was never to beat the competition, or to make a lot of money; it was to do the greatest thing possible, or even a little greater…
Since the Macintosh team were artists, it was only appropriate that we sign our work. Steve came up with the awesome idea of having each team member’s signature engraved on the hard tool that molded the plastic case, so our signatures would appear inside the case of every Mac that rolled off the production line…
We held a special signing party after one of our weekly meetings on February 10, 1982. Jerry Mannock, the manager of the industrial design team, spread out a large piece of drafting paper on the table to capture our signatures. Steve gave a little speech about artists signing their work, and then cake and champagne were served as he called each team member to step forward and sign their name for posterity… Steve waited until last, when he picked a spot near the upper center and signed his name with a flourish.
http://www.folklore.org/StoryView.py?project=Macintosh&story=Signing_Party.txt

Societal improvement

The “I did something really great” feeling, can only be experienced if people realise that they are doing something which is genuinely useful for society.

It was no use appealing to the ‘organization’ to produce new products in a miracle time. Everything had to be done on a person-to-person basis and cutting across all the lines of red-tape…

I summarize the qualifications for this sort of operation:

1. Money capitalism has to give way to motives of human capitalism both as to public sentiment (‘fighting for our lives’) or the breaking of red tape (‘You can do the paper work later’). It is a sense of vital urgency.

2. One has to work with back-room boys who are both self-starters and ingenious and who enjoy the sense of vital urgency. For once, the back-room boys feel they are doing something useful.

Innovation and Employment, page 143
https://books.google.com/books?isbn=1483165485

In summary

Creative minds are attracted to interesting environments. Compulsory homogeneity is the first warning sign that ingenuity and originality are on their way out. A true learning environment can only be led by someone who relishes the personal growth of constant learning themselves.

The Black Board drawings of Rudolf Steiner

Interdisciplinarity, risk and opportunity

 

The development of new products and services to bring to the marketplace can be driven by scientific advances such as the development of antibiotics, plastics and microchips. However sometimes new and exciting market offerings can be created by bringing together existing technologies and skills sets.

The ability to successfully combine existing knowledge and skills in different areas is referred to as interdisciplinarity.

Interdisciplinarity involves the combining of two or more academic disciplines into one activity (e.g., a research project). It is about creating something new by crossing boundaries, and thinking across them.

https://en.wikipedia.org/wiki/Interdisciplinarity

For example, a company may already possess the component parts of the knowledge required to make a quantum leap forward, however these bits of knowledge are held in siloed areas. To find new opportunities, the specialised knowledge in different departments must be combined and made to work together.

A major route left for economies to stay innovative is better coordination among knowledge communities aimed at sparking synergy creation… For individual firms, this means management’s ability to combine knowledge of individual technologies and consolidate corporate-wide technologies and skills within their organisations.

Competing for Knowledge: Creating, Connecting, and Growing. Page 27

Personal interdisciplinarity

Personal success may also rely on the individual’s ability to combine knowledge and skills in different areas. For example, Leonardo Da Vinci combined scientific knowledge in different areas to advance mankind’s understanding of the body.

Leonardo’s notebooks clearly reveal his fascination with human development… He studied the anatomical composition of muscles and bones… To complete his work in this area, he described human movement as a mechanical system of interlocking parts, claiming his place as one of the first to conceptualize this idea. His notes in this field demonstrate the amazing combination of engineering and medical knowledge Leonardo possessed.

Amazing & Extraordinary Facts – Da Vinci, Notable Notebooks

Steve Jobs combined his deep understanding of humanities and the sciences to produce technically brilliant and attractive consumer electronics.

“I always thought of myself as a humanities person as a kid, but I liked electronics,” Jobs told me on the day he decided to cooperate on a biography. “Then I read something that one of my heroes, Edwin Land of Polaroid, said about the importance of people who could stand at the intersection of humanities and sciences, and I decided that’s what I wanted to do.” It was as if he was describing the theme of his life, and the more I studied him, the more I realized that this was, indeed, the essence of his tale.

https://hbr.org/2012/04/the-real-leadership-lessons-of-steve-jobs

Both at the corporate and at the individual level, opportunity is created when different disciplines are combined to create a multi-faceted result that satisfies difficult-to-reconcile requirements.

Risk and reward

Since opportunity presents itself at the intersection of discipline specific knowledge areas, it would appear that the more disparate the knowledge areas are, the more likely it is that their successful combination will result in a breakthrough.

On the other hand, the more disparate the disciplines are that must be combined to solve a problem, the harder it will be to develop the knowledge in each discipline to a level that will enable convergence of these knowledge areas, therefore the less likely the chances are of success.

The delivery of fusion electricity is not just about understanding plasma. You also have to know the materials you’re going to build the reactor out of. You then need to know how to build the reactor and put all the pieces together. You have to be able to maintain it and it’s really important that you factor this in right at the start. It is absolutely vital that you do all this in an integrated way. You can’t just say that we’re going to make something 10 times hotter than the Sun and it will work. You have to think about the integrated solution.

Professor Ian Chapman, chief executive, UK Atomic Energy Authority

We can therefore identify a correlation between risk and opportunity in interdisciplinary ventures

  • If the disparity between the required knowledge areas is great, then the venture may have great potential but will also have a high risk of failure due to the difficulty involved in overcoming the incompatibilities between the knowledge domains.
  • On the other hand, if the disparate knowledge areas easily exhibit homogeneousness, then the risk of not being able to get to the required result is small, but the outcome of combining the knowledge domains will be less significant and will have a lower return.

In conclusion

People and companies often look outwards for new opportunities, however their true path to success may lie in bridging the gap between their existing disparate skills and knowledge areas.

It may be necessary to look outwards for the catalyst that will enable existing skills and knowledge areas to combine, but real growth is almost always the result of grassroots inspiration.

Going to work

Once upon a time, people used to go to work in the morning and come back home from work in the evening. They would bring a pay-cheque that enabled them to provide their families with shelter, food, clothing and some luxuries now and again. Work was not much fun but people put up with that because

  • Life was tough
  • People were used to doing what they were told
  • And it was understood that the payoff for putting up with going to work, being the ability to be a provide for your family, was more than ample compensation for the vicissitudes of working life.

Quality of living, meaningfulness and leadership were provided by family life, the village social scene, religious institutions and patriotism. People did not “live for work”, but rather “going to work” was a necessity that had to be endured in order to provide for “the important things in life”.

box-factory.gif

Post-modern utopia

The post-modern era has challenged this idea of “what life is all about” and is of the opinion that “work” should be at least as much fun, if not more fun, than anything else you do.

happy_hands_large.jpg

In order to accomplish this new state of affairs, corporations spend much time and effort in creating a submersive organisational culture which gives employees a sense of belonging. The company work scene becomes the place where employees feel at home and where they can be part of the societal fabric.

Consider yourself at home.
Consider yourself one of the family.
We’ve taken to you so strong.
It’s clear we’re going to get along.

https://en.wikipedia.org/wiki/Consider_Yourself

A bizarre side-effect of this new way of living is that carried to an extreme of reductio ad absurdum, the ultimate effect of the submersive corporate culture is that employees see their careers as the focal point of their lives, so that anything that they do or experience outside of working hours becomes subsidiary to their life at work. Life events such as marriage, child-bearing and buying a house become “something to talk about at work” or something employees feel they were only able to accomplish due to the kindness afforded to them by the company.

New recruits were socialized into believing that Arthur Andersen was a special and exclusive organization. Arthur Andersen offered something special: a way of life… getting a job there meant making it.

Corporate Governance, Ethics and CSR, pg. 79

 Commercial reality

In reality, however, the reason corporations invest precious resources in order to create an internal self-contained society is purely and only for the financial welfare of the corporation (see a previous post on this here). Therefore the utopia of being emotionally molly-coddled at work may seem to be a normal state of affairs, but it is only the ongoing financial imperative of the corporation’s balance sheet that feeds the efforts invested to create a semblance of a warm and loving society.

Subsequently if a change in market conditions, or the financial imperative to “grow the company” call for a readjustment of the internal social order, then the structure of the corporate society must change in order to be in equilibrium with its financial accommodation.

The lack of this realisation is possibly the reason why many people search the Internet for the explanation of behaviour that their manager has displayed towards them which they feel is unwarranted, whereas it is possible that their questions do not necessarily have an answer.

why.png

All of these questions assume that the employee will be “emotionally provided for” at work. Within this context, if an employee experiences managerial behaviour which they find upsetting, the employee will deduce that that there must be a reason for their manager’s behaviour which makes sense within the context of the company social scene.

However since the illusion of a “self-contained society at work” is exactly that (an illusion), and since the driving force behind the maintenance of this society can only ever be financial, employees will invariably encounter shards of managerial behaviour that have little to do with the rosy prospect of utopia at work but have more to do with the raging financial pressures that typify the modern volatile and demand-driven marketplace.

Possibly the only viable personal response to situations that offer questions like these is a re-evaluation of the meaningfulness of individual life as it used to be, prior to the enticements offered by modern corporate culture.

Perfecting informal organisations

From a purely financial perspective, the relationship between management and employees is the purchase by management of goods and services (that have been requested by customers) from the employees.

interaction

In traditional manufacturing companies very little veneer covers  the commerciality of this arrangement. The financial interests of the employees may be represented by trade unions who negotiate on their behalf with management, sometimes with equanimity and sometimes forcibly.

Britain-miners-strike

However, since modern corporations seek to create their own internal society in which money is not seen to be the driving factor, the relationship between management and employees cannot be allowed to remain soul-less and impersonal.

Instead, a more nuanced understanding is fostered in which it is understood that management are “the people who have to get things done” and employees are “the people who need to feel at home while doing their tasks”. The needs of management are functionally driven yet management remain “human”, and the needs of the employees are socially driven yet “they have to get the job done”.

Subsequently, management demand that employees “get the job done” but in return accommodate the employees personal and social needs. Employees, on the other hand, demand that management accommodate their personal and social needs but in return they “will get the job done”.

Interactions - complex

The greater the mutual understanding that develops between management and employees, the more they will work in harmony. How can companies strive to achieve this happy state of affairs?

Enthusiasm

From the perspective of the management – employee relationship, both management and employees are inherently in a state of conflict.

  • Management wish to be as personable as possible to the employees, however they are constrained from indulging the employees due to the need to demand the output of goods and services from them.
  • Employees wish to provide management with the greatest output of goods and services possible, but they are constrained from indulging management due to the need to enjoy their work-life balance.

The more employees enjoy their jobs, the smaller management’s quandary of how to maximise employee output while simultaneously providing for their personal and social needs will be. In other words, when employees perceive that their personal success and enjoyment lies in their work, they will not need management to goad them on to excel in their tasks.

Andy Capp

Quid pro quo

If the staff of an Internet Service Provider are wildly interested in networking connectivity and the Internet, it is likely that the ISP will be more successful than if staff feel that they have to put up with the drudgery of yet another day of enabling customers to surf the web.

In the first scenario (ISP staff are wildly enthusiastic about networking), there is very little “distance” between the functional exterior and the personal core of the ISP’s employees.

employee (1)

Because of this, there will be commensurately very little requirement for management to make purely functional demands on the self-motivated ISP staff. Instead, they will enjoy a “warm” relationship with their employees, who will nevertheless”get the job done”.

ISP 2

However, in the second scenario, there is a large gap between the disinterested employees’ personal involvement in their work and the results they have to accomplish.

employee (2)

In this case, management will have to adopt a functional communication style when interacting with employees. The relationship will be “cold” and factual.

ISP 4.png

Therefore it seems that the success of the informal company is directly proportional to the degree of personal interest that employees have in their own work.

The reason Google used to allow employees 20% of their time to develop their own projects, is not necessarily because this was the most efficient way to invent new products, but because Google knew this was the best way to enthuse employees generally about their work.

 

Every company in every industry, probably has to seek a different path to allowing employees to personally identify with their work and be excited about the difference they can make every day, however.

Knowledge momentum

There is a fundamental difference between the knowledge that a car is about to run you over and the knowledge that a triangle contains 180 degrees.

The knowledge that a car is about to run you over is not verbally expressed in your thoughts. That is, if you look up while crossing the road and you see a car in a collision course with you, it is highly improbable that the following thoughts will go through your mind: “It would appear to me that given my direction of travel and that car’s direction of travel, and considering our respective velocities, it is probable that the car and myself will collide in 3.2 seconds which would result in severe injury.” Instead, it is more likely that you will jump out of the way without thinking about your high-school applied maths.

This type of knowledge is often referred to as Knowledge by Acquaintance

We shall say that we have acquaintance with anything of which we are directly aware, without the intermediary of any process of inference or any knowledge of truths.

On the other hand, if you are performing an experiment to see if triangles really do contain 180 degrees, it is likely that you will verbally think through your conclusions, “It would appear that this triangle contains less than 180 degrees,” before transcribing the results.

This type of knowledge is referred to as Knowledge by Description

To know some thing or object by a definite description is to know that it is the so-and-so or that the so-and-so exists.

The reason for this difference is that being run over by a car is a natural (if unwanted) part of your everyday life, but the different flavours of geometry predicted by the Big Bang theory are not. Because the desire not to be run over is something that you experience personally, there is no need for you to mentally verbalise aspects of the situation that presents this danger in order for you to determine the actions you need to take to avert an undesirable outcome.

On the other hand, the predictions of the Big Bang theory on whether the universe will expand indefinitely or will ultimately collapse and the ways that we can determine the type of universe that we live in are not part of your natural everyday life. Therefore in order to process the facts and figures that relate to this aspect of reality you have to mentally ascribe words to the elements of this sphere of thought and to the interactions between these elements, in order to cogitate about the subject matter.

Different approaches to the same body of knowledge

It is not always obvious what knowledge you have assimilated as Knowledge by Acquaintance so that the knowledge becomes a natural part of your life and is integrated into your natural perception of the world, and what knowledge you have kept at an arm’s length internally, so that the knowledge is merely appended to your internal Knowledge by Description information-store.

For example, a watchmaker who has spent their entire life perfecting their knowledge of watches is likely to have absorbed the knowledge of watch mechanics into their personal Knowledge by Acquaintance perception. The watchmaker will not have to mentally verbalise which cog should mesh with another and will be able to intuitively diagnose why a watch is not working.

watchmaker

On the other hand, an accountant analysing their client’s balance sheet for anomalies is likely perceive the numbers before them as Knowledge by Description in order to verbally cogitate on the problem.

Accountant

Furthermore, it is possible that two people could perform exactly the same job after acquiring exactly the same body of knowledge, but one will allocate the requisite body of knowledge to their personal Knowledge by Acquaintance perceptions and the other will allocate the same knowledge to their “impersonal facts-and-figures” Knowledge by Description information store.

A microprocessor architect who is in love with the x86 microprocessor architecture will ascribe the same quality of feeling to their knowledge that the 8086 architecture is beautiful and their knowledge that a vivid sunset is beautiful. Subsequently, just as watching a nice sunset is a natural part of their everyday life, so too developing x86 microprocessors will be a natural part of their everyday life.

This may contrast starkly with another microprocessor engineer who may have very firm opinions about not letting their professional work become intertwined with their personal life and makes sure that their professional knowledge remains exactly that.

Self-promises

Another personal aspect of knowledge acquisition in which people differ is the degree to which they make promises to themselves that their acquisition of a certain body of knowledge will further their progress in life.

This means that because the effort required to acquire knowledge or skills may not be intrinsically enjoyable, you may promise yourself during the course of the acquisition of this knowledge that in the future, through application of your newfound knowledge, you will more than compensate yourself for the self-sacrifice involved in study through the gains that you will make by application of your knowledge and skill set.

For example, a doctor who studies for 10 years to qualify will promise themselves, during the course of their studies, that the career opportunities and lifestyle afforded by their professional qualifications will be just recompense for the hard slog of qualification.

Because of the need to fulfill this self-promise after they qualify, the doctor will be driven to apply their knowledge in a profitable manner so that their societal status and remuneration will compensate them for the hardship endured while studying and training.

Life trajectory

We can therefore identify at least two factors which will influence the degree to which acquisition of knowledge will later cause your life to proceed inexorably in a particular direction.

  • Knowledge by Acquaintance: If you have acquired professional knowledge in a way that it becomes part of your natural understanding of life, then you will see this area of knowledge as a permanent and ongoing part of your everyday life.
  • Self promise: If during the course of knowledge acquisition you promised yourself that your later gains through application of this knowledge would compensate you for the duress endured studying, then after qualifying you will feel internally compelled to “get your money’s worth” from the body of knowledge through professionally leveraging this knowledge to your advantage and progressing your career.

These two factors can combine to determine the degree to which your future life will be molded by your acquisition of a body of knowledge.

knowledge - life influence 2

Knowledge momentum

The operational momentum of a company is only equivalent to the sum of the personal momentum of its employees.

In times of stability it is healthy for a company’s employees to be as committed as possible to their current job knowledge. If staff identify personally with their job-related knowledge and are motivated to further their careers through the application of and the development of their hard-won knowledge, this will make for highly motivated staff who will bring the company success and advancement in its current line of business.

However, when external circumstances change and corresponding company change is required, it is beneficial to have staff who can change job-direction easily. That is, it will be beneficial to have staff who have not made their current job knowledge into a natural part of their lives and who have also not promised themselves that this same body of knowledge will take care of them forever.

Is there any way to bridge the gap between high knowledge momentum, which is beneficial in stable market conditions, and low knowledge momentum, which is beneficial in times of change?

 

 

 

Corporate mind-space

According to a popularly quoted article printed in the The New York Times Magazine

The Social Responsibility of Business is to Increase its Profits

This may seem like a sensible statement from the vantage of the company’s investors, however thinking this all day long would probably be a depressing proposition for the company’s employees. In fact it is likely that internalising this corporate raison d’être would very quickly lead to the motivational collapse of even the most hardened company woman or man.

Subsequently people have the need to believe in a higher purpose in their daily tasks other than financially rewarding the company’s shareholders.

In response to this existential need, companies deliberately or unwittingly create an internal mind-space which incorporates all of the abilities and the motivational drives that its staff must possess and feel in order to progress the company’s success.

Within this corporate mind-space

  • The staff must believe that what they are doing is fundamentally “good”. That is, they must believe that they are involved in something of intrinsic worth and of fundamental value.

And

  • The staff must believe that what they are doing is “important”. That is, they must believe that they are involved in doing something which if not done will have a deleterious effect.

Once company staff believe that what they are doing is both “good” and also “important” they can become passionate about their work. If a “good” result is achieved this may bring them happiness so that they will strive towards this outcome. If a negative event transpires they may take this to heart and anxiously work to prevent such an occurrence.

Activity Value Importance
Mining coal Power factories and trains If not done, factories will lose power and trains will be unable to run
Providing drinking water The townspeople will have drinking water If not done, the townspeople will go thirsty
Securing a website against cyber-attacks Customers will have an enjoyable online shopping experience If not done, customers will not be able to shop online

 

Dichotomy and leadership

We are therefore confronted with a dichotomy between the purpose of the company as viewed by its shareholders (which is to increase profits), and the purpose of the company as it professes to its employees (which is to improve society).

In other words, we encounter a contradiction between the external face of the corporation, whose purpose is to offer goods and / or services in the most lucrative manner possible, and the internal “let’s pretend we don’t get paid for working here and are here for the universal good” feeling that must pervade the office space in order to motivate the company’s staff and coalesce them into a working unit.

Furthermore, because every company exists in the external commercial world and also contains its own internal world of personal endeavour, there must be at least one person or possibly a group of people within the company who are able to view everything within the company from both perspectives. Without this ability it would be impossible to translate external commercial pressures into direction within the company’s internal life. Conversely, it would be impossible to align the internal staff motive with the external commercial reality.

Formally the CEO is tasked with the ability to simultaneously maintain this dual paradigm and juggle both viewpoints in their mind, whereby to find the sweet-spot that maximises  the interaction between external commercial pressure and personal striving within the company. In reality however, the CEO may be part of a group of people who jointly translate the different functional areas of the business between the external and the internal paradigms. The CEO will have the “speaking part” within this group, however.

(The further staff are from the upper echelons of management the less they need be aware of the external commercial reality that the company faces. Successive layers of management may be tasked with the gradual transformation of external pressures into internal emotional drivers.)

Hence it would seem that

  • The fate of the entire corporate balance-sheet is in the hands of the individual or group that translates the real-world “commercial speak” into the internal company motivational parlance.
  •  Any misalignment of these contradictory but interdependent viewpoints will spell disaster for the company’s investors or for the morale of the company staff.

Is it reasonable to expect that senior management can maintain this razor-edge balance indefinitely, especially when the technological, socio-demographic and market environment in which companies operate today can change so rapidly?

The world within

Traditionally, corporations, even very powerful ones, do not last longer than one or two hundred years. For example, the Dutch East India Company which for a while was more powerful than some European governments, was founded in 1602 and became bankrupt in the late 1700’s.

As the BBC pointed out in 2012

The past few years have seen previously unthinkable corporate behemoths – from financial firms such as Lehman Brothers to iconic car manufacturers such as Saab – felled by economic turmoil or by unforgiving customers and tough rivals.

Is there a fundamental reason that corporations cannot last forever, or will we see a future that contains 1000 year old “Microsoft”s and “Oracle”s that will become indelibly entrenched in the world’s economy and work-style, like the God Emperor of Dune?

The Smartest Guys in the Room is a book (and later a movie) which describes the factors that led to the collapse of Enron. The title of the book hints at a syndrome in which people demur to the opinion of the person who is perceived to be “the smartest guy in the room”, regardless of whether the advice being advocated would stand up to objective scrutiny by a company outsider.

This type of introverted thinking is the classical reason why corporations fail, an extreme example of this mindset is the “I think film’s coming back” comment attributed to a Kodak executive during the death throes of the industry icon.

The question seems to be, is it possible to identify structural organisational flaws that lead to this type of myopia or is every large corporation ultimately doomed to become a runaway behemoth hurtling towards the edge of a Dilbert’esque reality cliff?

Laws such as the Sarbanes–Oxley Act ensure there is a realistic feed-back loop between the real financial performance of a company and the stock exchange’s evaluation of the company by providing meaningful data that is available for external appraisal and evaluation. However no law can control the development of an internal attitude that is at odds with realities that do not immediately affect the company’s share price.

Paradoxically it would seem that the more successful a company is, the more it is in danger of having the luxury of defining its own internal reality, which may later prove its undoing in true Decline and Fall of the Roman Empire style.

“This is the way we do it” and “She / he thinks the way we do” may seem like happy sounds as long as external factors align with the internally ripened mindset, but may more begin to resemble the sound of a runaway train when the world changes and leaves the “happy” paradigm behind.

Is it healthy for a company to promulgate its own way of thinking to employees, and is the alternative internal dissonance which would make the running of a large corporation unmanageable?

(This blog is Part 1 in a series on People and Corporate knowledge, TBC…)