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Posts tagged ‘Motivation’

The myths of self-organized teams

Image by Lauren_MillerMany Agile practitioners will push forward the concept of self-organized teams as a first step towards an Agile transition. Unfortunately, self-organization is often mis-understood and many become frustrated with the concept. Below are myths taken from real life situations – including the inner workings of our organization.

  • Self-organized teams can only work with experienced people. Although more experienced individuals may make it easier to self-organize, they can also make it much more difficult due to their old work habits. Overall, the age of the team members or their actual experience doesn’t impact their ability to self-organize. Self-organization has more to do with the people’s willingness to self-organize and the support they get from their manager than it has with age or experience.
  • Self-organized teams don’t need a leader. Wrong, self-organized teams still need a leader to move them through the various stages and toward their end goal. This being said, it doesn’t mean that the leader has to be a manager or a person in authority. Quite the contrary. Emerging leadership is a much better way to achieve self-organization but management needs to be patient because self-organization takes time.
  • Self-organized teams don’t need managers. Why not? Managers are a key success factor to support self-organization. Once again, this doesn’t mean that the manager is included in the self-organized team or that the manager will be leading the team. As Jurgen puts it – “Agile managers work the system around the team, not the people in the team”.
  • Self-organized teams are for everyone. Not necessarily, some people may not be ready for self organization or they may not be willing. Everybody has the capacity to be part of a self-organized team, it is simply a matter of wanting to be part of such a team because it is demanding and requires people to become responsible and accountable.
  • Self-organized teams are easy to implement. Really? If it was easy, why wouldn’t everyone adopt self-organization? The fact is that starting at a young age, we keep being told what to do (brush your teeth, go to bed, pick up your clothes, do your homework, show up at the office at 9am, finish the report for your boss, go on vacation in July, retire at 65, etc.) Wanting to be self-organized and taking control of your life is counter-intuitive and difficult. People in self-organized teams often act as victims of circumstances during the early stages (I can’t do this because the system won’t allow me) and then start to notice the opportunity the freedom of choice brings.
  • Self-organized teams quickly increase the team’s performance. No, it won’t. The team’s performance will indeed increase and for the long run but self-organization requires time, energy and much efforts to deliver results. If you are interested in quick-wins with minimal investments (time and/or money), I would suggest the Agile magic pill.

Autonomy or self-organization is a strong contributing factor for motivation and motivated individuals lead to improved performance and better results. Attempting to implement self-organized teams without understanding the risks and the energy required isn’t a good idea.

Transforming employees into shareholders may not be a good idea

image by risayv

Logic would tell us that offering shares of your company to your employees (assuming they are offered at a good price) should clearly boost performance and allow the organization to achieve exceptional results. After all, wouldn’t most people work harder, reduce inefficiencies, increase their performance and chase sale leads once they become shareholders?

Turns out logic does not necessarily prevail in this situation and results may not be extra-ordinary.

Let me share with you our not-so-successful experience.

Our experience

I’ve already stated that Pyxis is an experimental laboratory and like many people, we understand that money by itself is not a good motivator. We also believe that sharing the wealth with the people who contribute toward achieving the business results is not only a good idea, but it is for us a morale obligation.

So at the end of 2007, the founder and then CEO agreed to sell 25% of his shares to the employees with the intend to increase performance and share the resulting wealth – in addition to using it as an employee retention strategy. At the time, almost 100% of the employees created a cooperative to own shares of their company. It is important to specify that our province offers important tax credits to employee-owned cooperative – which was an important driver in creating a cooperative.

The conclusion after more than 3 years of having employee-shareholders is that the intend and the objectives were right but the way to achieve them weren’t done right. Why is that? I asked myself.

Below are my conclusions but before we get into those, I believe it is important to understand the distinction between being an employee and being a shareholder.

What is an Employee?

An employee contributes labor and expertise to an endeavour. Employees perform the discrete activity of economic production. Of the three factors of production, employees usually provide the labor.

Specifically, an employee is any person hired by an employer to do a specific “job”. In most modern economies, the term employee refers to a specific defined relationship between an individual and a corporation, which differs from those of customer, or client. Wikipedia

What is a Shareholder?

A shareholder or stockholder is an individual or institution (including a corporation) that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself. Wikipedia

Clearly, there is a distinction between the role and contribution of an employee versus that of a shareholder. For one thing, transforming employees (with their behaviors and attitudes) into full-fledged active shareholders doesn’t happen over-night. To be honest, it still didn’t happen after over 3 years for almost 1/3 of the employees. Did we hire people who were not driven by results? Well, maybe for a couple of people but certainly not over 30% of the people. So why is it that results didn’t go through the roof?

After much analysis of the situation and heated debates, I believe there are a few reasons why transforming employees into shareholders didn’t give outstanding results:

  • Creating a cooperative has a non-capitalistic connotation: People who initiated the process of selling shares to the employees also wanted to implement a coop as a way to distribute wealth. Unless our implementation of a coop is very different than elsewhere in the world, many people understood a coop to be a non-profit driven initiative and as such, acted accordingly. Having a coop own 25% of the shares led to non-capitalistic behaviors and consequently slowed down growth and profitability.
  • Becoming an active shareholder isn’t the norm: Unless you have owned and operated a business in the past, the notion of becoming an active shareholder isn’t easily understood by most people. Many people – still to this day – ask themselves what it means to be a shareholder and how they should act differently. Transforming employees into shareholders is an educational process and unless you invest in training people what it means, the transformation will not give great results.
  • Lacking entry criteria brings performance downwards: Since everyone got access to shares without exception, there was no motivation to increase performance – why work harder than the next guy when the results are shared equally. On the other hand, when past performance is used to determine who gets the privilege to own shares, individual and collective performance is increased and as a consequence, the overall performance of the organization goes North.

Consequently, attempting to transform employees into shareholders overnight was a mistake in our case. If we had to do it again, I would still give employees the opportunity to own shares but it would be done according a different approach:

  • Owning shares is a privilege and would be based on past performance;
  • Allowing employees to own shares would be done in small increments, and annually (let’s say x% per year);
  • Potential shareholders would need to demonstrate their understanding of what it means to be an active shareholder and would need to agree to certain protocols;
  • The percentage of available shares would be results-based – the better the organizational results, the more shares would become available.

Based on this experience, I would gladly grant shares to employees who clearly understood the meaning and responsibilities of being an active shareholder and who have demonstrated (and are still demonstrating) outstanding performance. Otherwise, there is no wealth to share…

Don’t tell me you really want to increase your team’s performance – I won’t believe you

Image by Trucker TomI bet you $50 that even if I told you the way to boost your team’s performance without increasing your costs – you wouldn’t do it. The situation is actually worst than that! I’ll add another $50 that I even know what you will tell me once I tell you. You will say “We can’t do that in our organization“.

Ready to find out?

Stop assigning people to projects and let them pick the project they wish to work on – that’s it!

I can hear you – “We can’t do that in our organization” – there, I just saved $100.

Seriously, it is that simple. Think back to a project you worked on – were you assigned or did you select it yourself? Now do this exercise. Think back to something you enjoy, I mean you truly enjoy – were you assigned or did you pick it yourself?

Have you ever heard of Tom Sawyer withewashing the fence? As Mark Twain once said, “Work is something you are forced to do while leisure is something you choose to do”.

I don’t mean to pretend that work is a hobby but many organizations ignore people’s intrinsic motivation and personal drive when they (i.e. the managers) assign people to projects. No matter what the project is about, there will always be people interested in working on such a project. Ever heard of Crowdsourcing?

In most organizations, it may not be easy to let people select their own project, but it is feasible. Some organizational constraints may need to be modified, project assignment may need to be done differently, some resource planning may be required but all of this is feasible.

As one of the participant highlighted “I used to be bored to death in my normal job until one day, I asked (begged) to be part of a specific project. I’m so glad they granted my wish. I now work 55 hours a week! I am super motivated and nothing is going to make me want to leave that project”. Still think letting people select their project is a bad idea? – Analytical-Mind.

Go ahead, give it a try and see the results for yourself. I have tried this approach on many occasions and the results always impress me.

The Carrot Principle – Using Recognition to Increase Team Performance

Increasing teams and departmental performance – isn’t this why most organizations adopt the Agile principles?

Although there might be other reasons, many of the organizations we work with aim to increase their teams’ performance. I recently read The Carrot Principle – How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance – to see how recognition may help increase teams’ performance.

While many organizations still believe an above average salary is enough to keep people motivated, salary alone is not a good motivator. As Daniel Pink described, above an acceptable base salary, salary no longer is a good motivator. As such, managers often look for alternate ways to keep their team motivated.

The fact is that money is not as powerful a reward as many people think. While pay and bonuses must be competitive to attract and retain talented employees, small amounts of cash – anything short of $1,000 – will never make the best rewards because they are so easily forgotten – The Carrot Principle.

Recognition is deemed an important source of motivation and is usually used to maintain a low employee turnover rate and, increase employees’ performance and business results. Many organizations who adopt Agile practices recognize that it is increasingly difficult to attract top talents and in order to remain competitive, they should focus on increasing the performance of their existing work force.

Engaged employees demonstrate: innovation and creativity, take personal responsibility to make things happen, desire to contribute to the success of the company and team, have an emotional bond to the organization and its mission and vision.

U.S. Department of Labor statistics show the number one reason people leave organization is that they “don’t feel appreciated” – The Carrot Principle.

The book relies on surveys done by HealthStream Research and supported by data from Towers and Perrin. Below are some of the conclusions derived from the data:

  • Companies that effectively recognize excellence enjoy an ROE (return on equity) three times higher than the return experienced by firms that do not;
  • Companies that effectively recognize excellence enjoy an ROA (return on assets) three times higher than the return experienced by firms that do not;
  • Companies in the highest quartile of recognition of excellence report an operating margin of 6.6 percent, while those in the lowest quartile report 1 percent.

The authors point out that to be impactfull recognition should be combined with what they call the basic four areas of leadership:

  1. Goal Setting: defining the purpose of a task and tying it to a desirable end result
  2. Communication: discussing issues and sharing useful information with employees, welcoming open discussions
  3. Trust: keeping his word and owning up to his mistakes, maintaining a high ethic and positively contributing to the reputation of the organization
  4. Accountability: ensuring people deliver on their commitments.

Recognition can take many forms but whatever it is, the best reward is always personal and tailored to employees interests and lifestyle, given by a manager who cares enought to find out what motivates each individual – The Carrot Principle.

Finally, the book presents four levels of recognition:

  • Day-to-Day recognition: low-cost but high touch recognition such as Thank You notes to encourage small steps leading toward success
  • Above-and-Beyond recognition: provide a structured way to reward significant achievments that support the company’s core values
    • Bronze: to recognize on-time above and beyond related to core values
    • SIlver: reward on-going above and beyond behaviors for consistently demonstrating company’s values
    • Gold: behaviors that produce bottom-line results
  • Career recognition: recognize people on the anniversary of their hire
  • Celebration and events: celebrate successful completion of key projects or new product launches.
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