In our first installment we talked among other things of driving leadership down into the organization and encouraging people to experiment. I closed by noting that nothing would happen unless (a) people throughout the firm were genuinely engaged with the project; and (b) there were “guardrails” in place.
Let’s start with engagement, which brings us to McKinsey II, Increasing the ‘meaning quotient’ of work. Here’s the opening premise, and what they’re striving for:
Musicians talk about being “in the groove,” sportsmen about being “in the zone.” Can employees in the workplace experience similar performance peaks and, if so, what can top management do to encourage the mental state that brings them about?
We’ve long been interested in work environments that inspire exceptional levels of energy, increase self-confidence, and boost individual productivity. When we ask leaders about the ingredient they think is most often missing for them and for their colleagues—and by implication is most difficult to provide—they almost invariably signal the same thing: a strong sense of meaning. By “meaning,” we and they imply a feeling that what’s happening really matters, that what’s being done has not been done before or that it will make a difference to others.
I hope we’ve all experienced this in our lives, but what exactly does it mean? Is it anything we could possibly take steps to encourage among our colleagues?
The psychologist Mihàly Csìkszentmihàlyi studied thousands of subjects, from sculptors to factory workers, and asked them to record their feelings at intervals throughout the working day. … He observed that people fully employing their core capabilities to meet a goal or challenge created what he called “flow.”[…] Bill Russell, a key player for the Boston Celtics during the period when they won 11 professional-basketball championships in 13 years, put it thus: “When it happened, I could feel my play rise to a new level. . . . At that special level, all sorts of odd things happened. The game would be in the white heat of competition, and yet somehow I wouldn’t feel competitive.
Now, no one would argue with this as a desideratum, but how to actually get there given the day to day pressures and challenges we all experience? Who, after all, can be a Bill Russell on the basketball court being “in the zone”? One way to try to answer that is simply to ask business leaders what they’ve done to achieve it themselves and/or in their organizations:
Flow sounds great in theory, but few business leaders have mastered the skill of generating it reliably in the workplace. An easy first step is to consider what creates flow in your own work situation—a question we have put directly to more than 5,000 executives during workshops we’ve conducted over the last decade. In this exercise, individuals initially think about their own personal peak performance with a team, when, in other words, they have come closest to the feelings Csìkszentmihàlyi and Russell describe. Then they pinpoint the conditions that made this level of performance possible: what in the team environment was there more or less of than usual?
The remarkably consistent answers we’ve received fall into three categories. The first set includes elements such as role clarity, a clear understanding of objectives, and access to the knowledge and resources needed to get the job done. These are what one might term rational elements of a flow experience or, to use a convenient shorthand, its intellectual quotient (IQ). When the IQ of a work environment is low, the energy employees bring to the workplace is misdirected and often conflicting.
Another set of answers includes factors related to the quality of the interactions among those involved. Here, respondents often mention a baseline of trust and respect, constructive conflict, a sense of humor, a general feeling that “we’re in this together,” and the corresponding ability to collaborate effectively. These create an emotionally safe environment to pursue challenging goals or, to borrow from the writings of Daniel Goleman and others, an environment with a high emotional quotient (EQ). When the EQ of a workplace is lacking, employee energy dissipates in the form of office politics, ego management, and passive-aggressive avoidance of tough issues.
While IQ and EQ are absolutely necessary to create the conditions for peak performance, they are far from sufficient. The longest list of words we have compiled from executives’ answers to our peak-performance question over the last ten years has little to do with either of these categories. This third one describes the peak-performance experience as involving high stakes; excitement; a challenge; and something that the individual feels matters, will make a difference, and hasn’t been done before. We describe this third category as the meaning quotient (MQ) of work. When a business environment’s MQ is low, employees put less energy into their work and see it as “just a job” that gives them little more than a paycheck.
And as you’d expect while the rational/”IQ” and emotional/”EQ” components of the workplace experience are concepts we’re pretty well familiar with, “MQ” is new, and it turns out perhaps to be the key missing link to achieving “flow”:
When we ask executives to locate the bottlenecks to peak performance in their organizations, more than 90 percent choose MQ-related issues. They point out that much of the IQ tool kit is readily observable and central to what’s taught in business schools. The EQ tool kit, while “softer,” is now relatively well understood following Goleman’s popularization of the concept in the mid-1990s. The MQ tool kit is different.
You may already be saying to yourself that plenty has been written on trying to get “peak performance” from people in your firm, and I’d hasten to agree. But our authors have some thoughts on how to make these bromides actionable. It begins, as so much that reaches the whole human brain, from latter-day cerebral cortex to the antipodes of the reptilian core, with stories. The key insight is that our conventional stories aren’t enough, and we need to “tell five stories” all at once.
We typically see organizational leaders tell two types of stories to inspire their teams. The first, the turnaround story, runs along the lines of “We’re performing below industry standard and must change dramatically to survive—incremental change is not sufficient to attract investors to our underperforming company.” The second, the good-to-great story, goes something like this: “We are capable of far more, given our assets, market position, skills, and loyal staff, and can become the undisputed leader in our industry for the foreseeable future.”
The problem with both approaches is that the story centers on the company, and that will inspire some but by no means all employees. Our research shows that four other sources give individuals a sense of meaning, including their ability to have an impact on
- society—for example, making a better society, building the community, or stewarding resources
- the [client]—for instance, making life easier and providing a superior service or product
- the working team—for instance, a sense of belonging, a caring environment, or working together efficiently and effectively
- themselves—examples include personal development, a higher paycheck or bonus, and a sense of empowerment
Surveys of hundreds of thousands of employees show that the split in most companies—regardless of management level, industry sector, or geography (developed or developing economies)—is roughly equal. It appears that these five sources are a universal human phenomenon.
We may look askance at claims that we can be making a difference for “society,” but don’t underestimate its motivational power to rally people around a cause. The great religions, much of the charitable and nonprofit sector, and the fine and performing arts, certainly don’t underestimate it.
As for the client, we probably err in the opposite direction: We spill copious ink and marketing dollars trumpeting our dedication to client service, but how often do we articulate it so simply: “Making life easier for the client?”
“The working team” may not be a unit of organization we think much about, but if I had to put my money on one of these five to be first among equals, it would be the working team every time. Here again we learn a lot from another sector: The military. The Army, Navy, Marines, and Air Force all drill “unit cohesion” into recruits more strongly than any other value or characteristic. Its importance has been described in various ways, but a primary component is the individual’s partially submerging his interests for the good of the unit. Here’s how one Army commander put it:
The strongest motivation for enduring combat, especially for US soldiers, is the bond formed among members of a squad or platoon. This cohesion is the single most important sustaining and motivating force for combat soldiers. Simply put, soldiers fight because of the other members of their small unit. Most soldiers value honor and reputation more than their lives because life among comrades whom a soldier has failed seems lonely and worthless.
Lastly, the individual level: Here I take issue with our McKinsey tutors, because I would rank “personal development” and “a sense of empowerment” on an altogether different plane than “a higher paycheck or bonus.” I don’t believe they belong in the same conjoined phrase. Yes, compensation has to be “fair” first and foremost, and spot bonuses or awards can work wonders, but when we’re in the terrain of “meaning quotient,” dollars should be largely absent.
Stories that involve all five components can be remarkably powerful. They offer the example of a major financial services institution needing to implement a cost reduction program. When conventional communications along the lines of “expenses are outpacing revenue” had no impact, they turned to a “five factor story:” society/more affordable housing; clients/more competitive prices, team/less duplication, faster pace; individuals/bigger responsibilities. Within a month, employees reporting they were motivated to help what was after all still a cost reduction program jumped from 35% to 57%.
Finally, “buy in.”
We talk about it a lot, but do we walk the talk?
In one of Daniel Kahneman’s famous experiments, researchers ran a lottery with a twist. Half of the participants were randomly assigned a lottery ticket. The remaining half were given a blank piece of paper and asked to write down any number they pleased. Just before drawing the winning number, the researchers offered to buy back the tickets from their holders. The question they wanted to answer was how much more would you have to pay people who “wrote their own number” than people who received a number randomly.
The rational answer should be no difference at all, since a lottery is pure chance, and therefore every ticket number, chosen or assigned, has the same odds of winning. A completely rational actor might even want to pay less for a freely chosen number, given the possibility of duplicate ones. The actual answer? Regardless of geography or demographics, researchers found they had to pay at least five times more to those who chose their own number.
This result reveals a truth about human nature: when we choose for ourselves, we are far more committed to the outcome—by a factor of at least five to one.
How do you implement something like that in the real world? Here’s a story:
When Neville Isdell took charge at Coca-Cola, in 2004, he cocreated a turnaround strategy by bringing together his top 150 employees for three multiday “real work” sessions. The process was then cascaded further down into the organization, at small working meetings where participants could in effect write their own lottery ticket about the implications for their particular parts of the business.
With hindsight, this process of creating and interactively cascading what became known as The Manifesto for Growth is seen as a pivotal intervention in a two-year turnaround in which the group stopped destroying shareholder value and generated returns of 20 percent, driven by volume increases equivalent to selling an extra 105 million bottles of Coke a day. In this period, staff turnover fell by 25 percent, and the company reported what external researchers called unprecedented increases in employee engagement for an organization of this size.
Now, let’s try to bring all this back to the C-Suite in your firm.
We’ve learned a few things in this series:
- In the face of an unknown future, experiments are essential, and experiments are best conducted closer to the front lines than they are from the top down.
- “Flow”—that solid rocket booster to productivity, creativity, and contribution, requires not just a rational framework and emotional support but far more important (according to 90% of respondents), meaning.
Meaning has to have components (a story) that relate to:
- the firm
- the team
- and the individual
Distributing decision-making down (Neville Isdell, Coca-Cola) and letting people “write their own lottery tickets” requires the prerequisite be in place of trust, respect, and confidence.
I began by saying we don’t trust, don’t respect, and have no confidence in our C-Suite or, indeed, any “non-lawyer” on the premises.
Shall we turn that upside down for a moment?
How would you, Dear Lawyer, feel if your CFO, your CMO, your CIO, or for that matter your multi-talented administrative assistant, second-guessed you at every pass about how you practice law? And told you to your face occasionally that she could do your job better than you, as well as telling other people both inside and outside the firm the same thing?
Is the impact this kind of behavior has sinking in?
Let your CFO manage, strategically and operationally, the finance department. Same with the CMO and marketing, the CIO and your technology, your client relationship people and organized structures for approaching client relations, your HR people and recruiting. We should all strike an entente cordiale here: You let them do what they do best (manage) and you do what you do best (lawyer).
Again, we can diagram how this would work:
Of course, if you don’t want to do that, I refer you back to the first circular diagram in our first installment.
I have news for you. Whichever way you choose to run your firm, you will get the results you expect and you will have the finance, marketing, client relations, (etc.) functions you deserve.
If you want to continue undercutting “non-lawyers,” I sincerely hope it makes you feel a whole lot smarter and more virtuous. Because that’s all the good you’ll get out of it, and the price you—and all of your partners—will pay for your juvenile self-indulgence is contributing to undermining your firm’s future business competitiveness in this brave new world.
A final point.
Throughout this series, we’ve been talking about business functions such as finance, IT, and marketing. We’ve also talked about distributing leadership down, engaging people through developing a “meaning quotient” and explaining how that vision will make the firm, society, clients, their team, and themselves, all better off.
These seem like things that can be “managed” in the most classic sense: Administered, directed, governed, handled, regulated and controlled. And indeed they can be so.
But there’s one prior condition which is absolutely prerequisite to any of this working with your firm’s C-suite, and it doesn’t begin with management, recruitment, compensation, or organizational charts. It begins at a far more fundamental level.
It begins with respect.