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How Much Control Do We Need?

 

These days, we often hear top managers speaking about empowerment. Empowerment is important for getting the innovation back into our business processes. Our employees need to obtain the freedom in order to take risks. Then we hear how important it is to create a risk culture where employees can learn from their mistakes. Reading the article in the Harvard Business Review (HBR; May-June 2018) which was entitled “Structure That’s Not Stifling”, it became very clear that there is a problem: “Executives have trouble resolving the tension between employees’ empowerment and operational discipline”. This problem appears to be very difficult to solve and we have created various approaches from a matrix-driven organization to a self-managed team, but none of them has offered a real answer.

 

In order to discuss this issue, we have to get a clear view of what freedom can mean in a business context. Freedom can mean many things. Ranjay Gulati (author of the article in the HBR) defines it as “trusting people to think and act independently on behalf of the organization”. He supplements the definition that it may also allow them to find fulfillment and express themselves. Today, people in our organizations want to have a choice to a certain extent to decide themselves what they want to do. We know from neuroscience studies (Rock, Burgelman, Bower, etc.) that there is a relationship between autonomy and innovation. If we do not give our people the freedom to act, how can we expect them to be creative?

 

But this is the side of the employees. Managers are often afraid to open the doors and grant freedoms within our corporations. Over centuries, we have learned controlling instruments in management schools and they see in controlling their workforces their right to exist. They blame the lack of commitment upon the part of their employees, but, at the same time, they enjoy sitting in the power chair and savoring the feeling of having all their subordinates under control. In a previous blog article, I stated already that “we don’t need managers, we need leaders” in our future organizations.

 

In the article, the case study of Alaska Airlines shows how a company can benefit from empowering its people and give the freedom to act even if that means that they will make mistakes. Alaska Airlines operates in a highly-regulated, safety-focused, low-margin industry. If a company like this airline can establish a framework of freedom, I am fairly convinced that any company can do the same. Due to the attacks of September 11, the security costs in the whole airline industry have increased dramatically. Thus, everybody can readily understand what challenges such a company has had to deal with since then. Giving people the freedom to act in such a situation means also that they need to understand what it means to act in a certain way. The people at Alaska Airlines therefore learned about its financial standing and its sustainability plan. They also learned about how the company was evaluated and where it stood in relation to its competitors. Acting autonomously does not mean acting irresponsibly. Our human brain also has a strong desire for security in our lives. Taking a risk therefore needs to be in line with the appraisal of the consequences. The leaders have played an important role in this development. Instead of controlling the workforce, “the goal was to help employees grow from the experience, not to punish them for well-intended choices or make them afraid to use their discretion in the future”. Isn’t this what effective leadership is all about? Kenneth Blanchard (founder of the situational leadership methodology) said once that leadership is much more what you do with your people rather than to them.

 

But if all seems to be so positive, why don’t we see more companies following this approach? Ranjay Gulati indicates also the fragility of this framework of freedom. Putting this framework into practice also means that it requires maintenance. People must maintain an explicit awareness of the company’s mission, priorities, and principles. Moreover, management must be willing to share all this information and insights of the mission, priorities, and principles with their employees. In our overregulated business world, we also often impose so many restrictions on compliance, training and rules that we are not at all able to take advantage of our human neurobiological capabilities. I strongly believe that the answers to our constantly-increasing dynamic business environment are based on concepts expanding the freedoms in our employees’ personal lives. We can only manage the business dynamic with dynamic concepts. Indeed, concepts of freedom are also concepts of dynamics. As Gulati stated while using deductive reasoning in his article: These concepts “must be continually redefined–they must breathe, grow, and evolve within companies’ simultaneously-changing needs”. This is not an easy task for today’s leaders, but we do not have any alternatives if we want to survive in our new business world.


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