Thursday, December 17, 2009

The All or Nothing Business Model

What happened to the middle ground? The extremists have taken over and executives need to avoid falling into the trap of all or nothing. How many public figures make a mistake and someone is calling for their heads? Politicians, athletes and other public figures are one misstep from being called to resign. In fact, this is going on in our corporations as well and it is a very dangerous way to manage.

I have client executives who told me a year ago how valuable a particular employee was to the success of the organization only to hear twelve months later the executive is considering firing that same employee. I asked the executive what significant errors had this employee made over the last year? His response? Nothing significant, I’m just not as impressed as I was a year ago. When I pressed for more details the executive told me the once superstar had taken time off for some minor surgery and was gone during a critical time of the year.

There is nothing wrong with challenging employees to step up. There is nothing wrong with setting high expectations. There is nothing wrong with striving for excellence. But, when someone can go from the best to being considered for termination because of one failed attempt or one questionable event (surgery, really?) the work environment is caustic.

All or nothing employment will create disastrous consequences. Consider these three effects of an all or nothing environment.

1. Us against them

Look at our government right now. There is no collaboration and the fight between the parties is so caustic that the country suffers as a result. Right now the Democrats are enjoying their majority and passing legislation in the face of Republican protest. As always happens in politics the tide will turn and the Republicans will do the same thing in response, and the battle continues it just keeps getting nastier and nastier. Is this anyway to operate a successful organization? Once lines are drawn people will fight to the end even at their own detriment. Think this doesn't happen in business? Ask the leaders of General Motors and the Autoworkers Union how their loggerhead mentality has prospered?

When you create divisions in the workforce and set up a one mistake and gone atmosphere sides will be drawn and factions will try to take control and the focus of energy will be on winning the internal battle as the bigger picture sinks. Collaboration is a better path to success than combating factions.

2. CYA

When you place every employee on a one mistake tight rope suddenly people become much more interested in adopting a cover-your-ass style of thinking than in a how-can-we-get-better type of thinking. Survival is the most basic of instincts and teamwork, profits, and innovation will be abandoned in such circumstances. All or nothing makes everyone more interested in blame focus than in solution focus. It a blame-focused work place really the work environment you believe produces the best results? Think again.

3. The Fear Freeze

Imagine The University of Kentucky basketball team is playing a big game against the University of North Carolina and one of the coaches is fed up with all the personal fouls his team has been having so he tells his team over the noise of the crowd just before the tip off, "If anyone gets one foul they will be pulled from the game. No fouls or you are gone from the game. Got it?" What possible chance do they have of winning? The players will be frozen in fear every time the ball comes down the court for fear of being pulled out of the game.

If you have been laying off employees, creating fearful announcements in your workforce or making extreme comments to try to inspire your work force you are probably witnessing some of these effects of the all or nothing managerial approach. It’s time for leaders to avoid the extremes and return to middle ground where employees can make mistakes in the effort to improve, grow and innovate.