Why We Need More Coffee Breaks

A manager in a municipal government was lamenting the policy change that drastically limited the time allowed for coffee breaks. Not because he really loved coffee, or didn't want to get back to his job, but because he noticed that communication within the organization had gotten worse since the change.

In the good old days, people from different departments would get together casually over coffee, in groups, in pairs, and just chat. Inevitable, there would be a lot of talk about the Riders, but there was also be a lot of talk about what's going on in the office. "What's happening with you?" and "How's your project coming along?" were explored in a casual, relaxed setting and a lot of information was exchanged.

Now, that process is outlawed. Instead of a thirty minute coffee break with 15 minutes on football and 15 minutes about what's going on at work, they now have 15 minutes on football, followed by a 90 minute meeting to discuss what's going on at work.

When it was suggested that you could have a meeting and just make sure there was coffee, he wisely pointed out that it's not the same. A meeting with coffee is structured, formal and often unproductive. Coffee with some shop talk is unstructured, relaxed and often very productive.

Could more coffee breaks actually make your people more productive?

Is Avoiding Failure the Same as Success?

Looking through a Request for Proposal for help with a technology implementation, I'm struck by the fact that less than half a page, out of twenty, is dedicated to the scope, to describing what it is they hope to accomplish. That's less than 3% of the document dedicated to defining success, to defining what the desired outcome is for the project.

The other nineteen and a half pages are filled with "Thou shalt do this!" and "Thou shalt not do this!" commandments; the impression I'm left with is that this organization has probably had a lot of problems in the past and they're trying to prevent those same problems from occuring again. Now, that's fair enough; learning from past problems is a key part of improving a process.

The problem is, in the half page that deals with the scope of work, it's not really clear what it is they are trying to achieve. More than 97% of the document is trying to prevent failure, but the document never really manages to define success. Even if none of their anticipated problems happens, the odds are pretty good that the project won't really meet their goals, since little effort has been made to communicate what their goals really are.

When you're trying to get somewhere, sure it's important to avoid accidents and mechanical trouble. But it's even more important to have a clear vision of where you're trying to get. How much of your RFP process should deal with scope, and goals, and vision? I don't know, but probably a lot more than three percent.

Why is the Landlord Business Different?

In response to one Regina apartment owner giving their tenants notice of a 70-100% rent increase, the Saskatchewan government is considering a longer rent notice period, currently set at six months. The intent would be to prevent "unacceptable" rent increases, whatever that means.

It's curious that the business of being a landlord is targeted for such regulation, while other businesses are not.

If you own a restaurant, you can set your prices however you want. If you set them too low, you'll lose money and go broke. If you set them too high, you'll lose customers, and go broke. If the cost of bacon, lettuce and tomatoes goes up, you'd better raise the price of a BLT or you'll go broke. If the price to own a restaurant building doubles, you'd better raise your prices or you'll go broke.

The same is true whether you sell groceries, gas, clothing, cars, or diapers. Charge too much, and people won't buy your product. Charge too little, and you won't make any money.

Why are the owners of residential properties singled out for this kind of regulation? In any other business, even if they deal with the necessities of life, companies are free to increase their prices. If they increase it too high, people will stop buying from them.

If a landlord increases the rent too much, tenants will stop renting from them. Tenants will move out. If the owner of the property is willing to risk losing their tenants, how is that different from any other business that decides to raise its prices? If a landlord can charge more rent, and still keep their building full, doesn't that mean that the price is not too high?

Why is the business of being a landlord so different?

Swimming Upstream

Do you ever despair about the effort it takes to make changes in your organization? To get results? Whether you're an economic development agency trying to attract businesses to your city, or a business owner trying to motivate your staff, do you sometimes get the feeling that there is some greater force that's trying to prevent your success? Are you swimming as hard as you can, but not getting anywhere?

We all work within systems, and our systems are part of larger systems. While our focus is usually on what we ourselves are responsible for on a daily basis, sometimes we need to expand our attention to the larger systems of which we are a part. Two examples...

In Northern Ontario, economic development agencies have struggled to attract and keep major industrial customers that are heavy users of electricity. The energy policy of Ontario sets electricity rates higher than neighbouring Quebec and other jurisdictions, so major industries like Cliffs Natural Resources ferro-chrome refinery are finding it hard to justify locating in Ontario. Even though other technical reasons might make Ontario an ideal location, the larger system of provincial energy policy makes it unattractive because of the electrical costs. So, while particular communities might have excellent economic development initiatives, they're swimming upstream against the province's power rate policies.

Similarly, the owners of an otherwise vibrant 25-person Saskatchewan company have been continually frustrated by employees who won't give that little bit extra to get jobs out on time. Their company, their payroll policies and their management approach operate within the larger system of Saskatchewan's labour standards where any work beyond eight hours per day is overtime, to be paid at time-and-a-half.

Applying this diligently, the company has required all overtime, no matter how small, to be approved in advance. The hassles of getting management micro-approvals for every little extra effort has evolved into a culture of clock watching, with everyone leaving when the official day is done. The managers are trying to foster teamwork and cooperation, but their staff have been swimming upstream against this inflexible administration of overtime, agains inflexible administration of Saskatchewan's labour standards.

When local economic development agencies identify provincial policies that affect their ability to attract companies, they need to work with that larger system to address those issues - in Ontario, the hydro energy policies. In the Saskatchewan example, when the small company's strict application of the eight-hour work day damages their entrepreneurial culture, they need to give some attention to the larger system of Sasktchewan's labour standards. They need to identify alternatives, either informally adding flexibility to the work day, or formally applying for a permit to average hours. They need to work on the larger system that's making it all but impossible for employees to willingly give that little bit extra.

In any case, recognize that all of your work takes place within some larger systems, and those systems can have large effects on your results. If you find yourself swimming as hard as you can and not getting anywhere, look outside your day-to-day operations to the larger system that you're working within. It's easier to make progress if you're not trying to swim against  a strong current.

Leadership Not Loudership

A military commander with thirty years under his belt described the huge changes in how the Canadian military manages its people.

"When I joined up in the 1980's, it was all about Loudership, with officers yelling at you, spit flying, veins popping. Terrifying really. And that's how I learned to manage, that's how they taught us to lead."

"That's not OK anymore. Now, it's all about leadership, about talking, and listening. There was NO listening before - it was hard to listen when you were screaming at someone. It's way better now, but it was a hard change."

"Discipline is different, it's less now, and that's a little harder, but performance is way up, retention is way up. It's better."

Misleading Metrics

At SREDA's Fall 2010 Economic Forum, Mario LeFebvre of the Conference Board of Canada gave a useful caution for anyone using metrics to try to understand a system. Saskatchewan's unemployment rate has remeained remarkably stable, between 4% and 6% for the last ten years. (Visit Human Resources and Skills Development Canada for detailed stats.). These days, Saskatchewan is a booming have province and, looking this measurement, you might think that that must always have been the case.

But, knowledge about the system is more valuable than measurements of the system. In Mario's words, "The 5% unemployment rate is about the same in 2000 and 2010, but the underlying reasons are very different. In 2000, [Saskatchewan] had low unemployment because all the unemployed were leaving the province. Today, you have low unemployment because you're creating a lot of jobs."

Same measurement; very different meaning. Strive to look beyond the metrics and understand what in the system contributes to those metrics.

It's The Nature of the Beast

For some reason, there's a belief that our governing bodies are best served by having one group "in power", and another group "in opposition". We've got this nastily competitive structure, with competing political parties that battle each other to get elected, fight each other for media attention, attack each other on the floor of the legislature, and systematically "oppose" everything the other side suggests.

Then, in the news, we have articles like "Bad blood poisoning politics" about anger and conflict in the Saskatchewan legislature, and we're surprised by and indignant about the hostility. Yet why should we be surprised? The whole structure is about winning, about beating the other party at every step, about out-manoeuvring, out-thinking, and out-shouting them at every opportunity. In a win-at-all-costs competitive environment like this, such tactics naturally emerge.

This seems about as far as you can get from an effective, collaborative governing body. It's about as far as you can get from serving the needs of the province and it's people. It's about as far as you can get from efficient leadership and it would be unacceptable in any other organization.

Yet, it's not really surprising that this hostility and conflict exists. When you create an inherently competitive structure, you will create hostility and conflict. It truly is the nature of the beast.

Disconnecting Pay from Performance - Are You Crazy?!

As parents of young kids, we whip them into a frenzy about Christmas by talking about toys, candy, Santa, presents, cake, Santa, toys, and more toys. Then, when our kids get rabidly excited about "toys, toys, toys!" we're shocked and appalled. We self-righteously blame the media for making Christmas so commercial without recognizing our role in creating these little monster-consumers. We also unknowingly do exactly the same thing in business management.

We want our employees to be engaged in the work, to contribute their energy and ideas, and to be internally motivated to provide excellent service and get satisfaction from a job well done. Then, we constantly distract them by making their pay conditional, by holding up bonus plans and trying to get them excited about incentive pay, about perks, about contests, about quotas, about bonuses! And, for some reason, we're then surprised and annoyed when our employees constantly think about whether they're getting paid enough for the work they do.

Disconnecting pay from performance IS a controversial topic, and I'm sure I won't do it justice, but let's take a look at it all the same.

"Every board in corporate America is an advocate of pay for performance," says Hewitt Associates.
"Pay-for-performance needs to be embedded in your culture," says Workscape Institute.

Pay-for-performance is almost universally assumed to be a good thing, especially among HR professionals and HR consultants. It's touted as an effective motivator, a solution for reducing costs, and a way to entice workers to greater achievements. You probably have, or have considered implementing, a pay-for-performance system in your organization. You probably believe that people will work harder, faster, and smarter when their rewards are based on their results.

Yet research on human motivation clearly shows that intrinsic motivation, the personal, internal drive to do a good job, is the best and only true motivator. Unlike mice and chickens and dogs, research with humans shows that extrinsic motivators (like cookies, gold stars, prizes, bonuses, perks, praise) actually damage our intrinsic motivation AND (here's the surprise...) produce inferior results. In the short term, we'll work for a perk, but in the medium and long term, we'll end up only working for perks, destroying our innate desire to do good work and master new skills.

Throughout the corporate world, and more commonly in government, health care and education, managers and HR departments rely extensively on extrinsic motivation systems like pay-for-performance in attempts to get people working. Yet the research actually points us in a different direction, towards disconnecting pay from performance. Scary stuff kids!

If you think about it, there are basically three ways to reward people for doing a task. (I'm talking here about conditional rewards, rewards that are only distributed if certain conditions are met. Of course, we still pay people for their work. What we're looking at is how and whether we should dangle additional carrots in front of them.)

The first approach is Winner Take All, common in business, where one or a few top performers get a reward, and the others get nothing. This is the Employee of the Month mentality, the inspiration for the vacation trips for Top Performers, the Bonus Programs for those at the top of the heap. Competition and desire for reward will supposedly motivate everyone to work harder and strive for the top spot.

The second method, even more common in business, is Proportional Distribution, where each person gets rewarded in proportion to their ranking, so the higher performers get more than the lower performers. This is the familiar Pay-for-Performance mentality, the Commission Sales approach, the Ranking of people, the Piece Work approach, the Performance Appraisal approach. The theory is that people will work harder and strive to do more and better quality work under these systems in order to earn more.

Third, is the Equal Distribution approach, rare in business, where groups are rewarded equally, or not at all. Elements of this are sometimes seen in Profit Sharing plans, or Team Reward, but this approach is most often dismissed without consideration. Ideas like this are labelled pie-in-the-sky, impractical, or as leftist / communist / socialist mumbo jumbo.

So, most managers are surprised to discover what research shows to be more effective. And I mean "more effective" from a hard-nosed, results-based, profit-oriented point of view. It turns out that Equal Distribution (all the same conditional rewards or no conditional rewards) outperforms both Pay-for-Performance AND Winner Take All systems, for most human activities. Pay is why people take jobs, but Pay is NOT an effective motivator when it comes to the details of the daily work. It turns out that if you want to get exceptional performance from people in their daily work, you are better served by disconnecting their pay from their actual performance, by decoupling the tasks from the rewards.

Alfie Kohn, author of Punished by Rewards, suggests a revised basic principle for compensation: "Pay people generously and equitably. Do your best to make sure they don't feel exploited. Then do everything in your power to help them put money out of their minds. The problem with financial incentives is not that people are offered too much money; earning a hefty salary is not incompatible with doing good work. Rather, the problem is that money is made too [prominent]. It is pushed into people's faces."

So, instead of contiually whipping our employees into a frenzy about pay issues, about rewards and bonuses and incentives, let's establish a fair pay structure and then set it aside. Let's allow our people to focus on their work, on their customers, on mastering tasks and processes, on pride of workmanship, on nurturing teamwork and relationships, on job satisfaction. Let's support them in improving the work, and stop with the dangling carrots.

It may seem crazy, but consider disconnecting pay from performance. It's a relatively simple systemic shift that can produce deep and far-reaching improvements in your organization.