Yet, this is exactly what teams in modern organizations lack. Imagine trying to build a great theater ensemble or a great symphony orchestra without rehearsal. Imagine a championship sports team without practice. In fact, the process whereby such teams learn is through continual movement between practice and performance, practice, performance, practice again, performance again. — Peter Senge, The Fifth Discipline
A key enabler of greater organizational impact is the ability to discern between learning and performing. That distinction helps organizations evaluate their existing systems and programs and identify places where this distinction is not respected. As is often the case in their performance management system (reviews, compensation changes, etc.).
The first step that organizations that recognize this tension tend to take, is to decouple their “performance management” and “professional development” systems, both procedurally and temporally, so conversations about “how am I doing?” are separated from conversations around “how can I get (even) better?”.
While it is a step in the right direction, allowing them to at least capture the upside of “professional development”, the downside of “performance management” remains. Finding an alternative, or dare I say, completely letting go of the latter, requires revisiting the core employer/employee agreement: “you are getting paid to deliver outcomes”, and its underlying assumptions since it is the core tenet on which the notion that performance can be measured and managed is based.
Collaborate for social change has done some incredible work on this front, and summarized it in two reports:
As you may have gathered from the titles, the context is a little bit different: Their work aims to re-envision the relationship between funders/donors and non-profit organizations. But if we zoom out and abstract a bit, the core funder/non-profit agreement is identical to the core employer/employee agreement: you are getting paid to deliver outcomes. Therefore, many of their insights are transferable to our own context. The content below is a synthesis and organizing of content that I’m using almost verbatim from the two reports, with a few narrative sentences of my own where I will try to do my best connecting the dots.
The status quo paradigm in the non-profit space is called “New Public Management (NPM)” and is characterized by the ‘three Ms’: Markets, Managers and Measurement:
- Markets — the creation of markets for social interventions helps to drive innovation and efficiency
- Managers — social interventions must be overseen by people with training in professional management practice. Managers’ role is to identify what success looks like (strategic management) and to hold subordinates accountable, through performance management, for delivering it.
- Measurement — Metrics must be created which identify what success and failure look like, and performance must be measured against these metrics
Nothing about this is non-profit specific. It describes the prevailing paradigm in the for-profit space as well. If you’re not convinced just replace “social interventions” with “corporations” in the bullets above.
However, this paradigm fails to factor in the fact that the world we live in is complex, across three key dimensions:
- People are complex: everyone’s life is different, everyone’s strengths and needs are different.
- The issues we care about are complex: issues — like homelessness — are tangled and interdependent.
- The systems (organization) that respond to these issues are complex: the range of people and organizations involved in creating ‘outcomes’ in the world are beyond the management control of any person or organization.
The alternative, complexity-friendly paradigm requires working in a way that is human, prioritizes learning and takes a systems approach (HLS for short). See the full comparison table at the end of this post, but the key differences are the following assumptions:
- Motivation — Those doing the work are intrinsically motivated to do a good job. They do not require ‘incentivizing’ to do the right thing. Instead, they need help and support to continuously improve their judgment and practice.
- Learning and adaptation — Learning is the mechanism to achieve excellent performance and continuous improvement. Learning comes from many sources — from measurement and analysis, and also from reflection on the sensemaking and judgments we make every day in situations of uncertainty. This new paradigm views learning as a feedback loop which drives adaptation and improvement in a system.
- System health: quality of relationships — outcomes are created by people’s interaction with whole systems, not by particular interventions or organizations. Funders and commissioners working in this way take some responsibility for the health of the system as a whole, because healthy systems produce better outcomes. They take a system coordination role. They invest in network infrastructure which enables actors in the system to communicate effectively; they invest in building positive, trusting relationships and developing the skills of people who work in the system.
People who work in a way that is informed by complexity use the language of ‘being human’ to describe what they do. This means:
- Recognizing the variety of human strengths, needs, and experiences.
- Building empathy between people — so that they recognize, and seek to act on, the emotional and physical needs of others.
- Using strengths-based approaches — recognizing and building on the assets (rather than deficits) of people and places
- Trusting employees to act on their intrinsic motivation to help others and get better at what they do.
Managers talk about ‘liberating’ workers from attempts to proceduralize what happens in good human relationships, and instead focus on the capabilities and contexts which help enable these relationships. They talk about providing support that is bespoke. For leaders and managers, being human means creating trust with and between the individuals, teams, and departments. Trust is what enables leaders to let go of the idea that they must be in control of the support that is provided using their resource.
People working in this way also speak about learning and adaptation. They describe how their work is not about delivering a standardized service, but rather that it is a continuous process of learning which allows them to adapt to the changing strengths and needs of each person with whom they work. Budgets and salaries and thought of as resources to enable organizations to learn and improve. They are not purchasing services with particular specifications, they are funding the capacity to learn and adapt to continuously improve outcomes in different contexts. This challenges traditional, narrow forms of accountability based on targets and tick boxes. To meet this challenge, organizations are recognizing the multiple dimensions of accountability, and exploring who needs to provide what kind of account to whom. This process involves dialogue, not just data.
Finally, people working in this way recognize that the outcomes they care about are produced by whole systems rather than individuals, organizations or programs. Consequently, to improve outcomes, they work to create ‘healthy’ systems in which people are able to coordinate and collaborate more effectively. From these organizations, we have learnt some of the characteristics of the ‘healthy’ systems that produce good outcomes, and the System Behaviours that actors exhibit:
- People view themselves as part of an interconnected whole
- People are viewed as resourceful and bringing strengths
- People share a vision
- Power is shared, and equality of voice actively promoted
- Decision–making is devolved
- Accountability is mutual
- Open, trusting relationships enable effective dialogue
- Leadership is collaborative and promoted at every level
- Feedback and collective learning drive adaptation
To sum up what I view as the fundamental paradigm shift here:
Thinking about salaries as “funding to do work in support of our shared purpose” rather than “pre-payment for a set of outcomes”.
I intend to keep noodling on this content over the new few weeks and try to poke holes in it. So far, it deeply resonates.