Straight to the Naughty Stair Mr Ceo

In my blog ‘Choice is evil – deliver yourself from temptation’ I raised the idea that decision making is hard and painful– and that has a number of consequences. In your personal life it means that you can increase performance by changing your environment. In the same way companies can improve performance by changing their systems and culture. Just like Super Nanny.

Other people’s children – when on the horizon fine. Within swinging distance of their little arms, no. Until recently I seemed to be surrounded by rug rats. Not charming little ‘Shall we have a tea party Uncle Kevin?’ but punch-you-in-the-nuts and spit in your face godless, head-swivelling, feral monsters. As a result I started to watch Super Nanny. It’s very interesting.

The show always has the same format. It starts with clips of a mother in complete despair at the behavior of their child. And rightly so, the children are always pre-pubescent psychopaths biding time until they are old enough to start their careers of long term public incarceration.

Then Super Nanny walks in the door and fixes them in two ad breaks. And you know what? It’s never about the kids. It’s always about the parent and the environment, and putting in place clear consequences for bad behaviour. Essentially it’s about removing choices.

The stark lesson that gets reinforced every week is that small children are very much a product of their environment. Could it be the same with those other crazy uncontrolled, self-centered lunatics – employees?

Of course. Absolutely. The company culture, the shared behaviours and beliefs, the organization and systems have a huge influence on a person’s performance.

The funny thing is that the corporate world doesn’t seem to appreciate that. The focus is on attracting high performing talent rather than on creating a high performance culture. In the US this manifests itself most starkly in a kind of cult of the CEO being a messiah-savior. Perhaps it’s because American culture places a high value on individualism. Their sport tends to be dominated by one player, in football it’s the quarterback in baseball the pitcher. There the CEO earns 531 times the average employee compensation. In Europe, they follow soccer and the multiple is around 20. In Japan it’s 10.

But it’s not just about the people, however talented they are. Take clever, hard working, well meaning people and put them in a dysfunctional bureaucratic system and you have NASA. The 1986 Challenger disaster was blamed on NASA’s inappropriate processes and systems. But then the just seven years later the handle was turned again and out popped another shuttle disaster – Colombia.

The Colombia Accident Investigation Board found that the system hadn’t changed. For example engineering teams, rather than proving it was safe to fly, had to prove that it was unsafe not to fly. They pointedly concluded that, ‘NASAs problems cannot be solved simply by retirements, resignations or transferring personnel’. It’s not the people that were the problem. It was the system.

I met a former Telecom employee who told me that one year he got the worst possible performance grade and would have been fired – except just then his manager was made redundant. The new manager was a big improvement and the following year in the same job the employee got the highest possible performance grade. It’s the system.

In my experience management frequently has a blind spot when it comes to the real incentives driving staff behavior. I was talking to a manager at an executive recruitment firm who was frustrated that despite much cajoling the sales people still didn’t work together as a team. I asked ‘Are their bonuses based on their personal performance or the teams?’ You can guess it wasn’t the teams.

As an employee I’ve had my performance frequently reviewed, and occasionally I’ve been asked to take part in 360 degree feedback – but I’ve never been asked to take part in an ‘organizational performance review’, or a ‘cultural audit’. I’ve never been asked about how well the company provided the environment and culture that allowed me to do a good job. Perhaps the closest thing has been an engagement survey – with questions like ‘How likely are you to leave?’ which is less like a diagnostic test and more like the ambulance at the bottom of a cliff.

Changing the system can have dramatic results

By focusing exclusively on the performance of the employee companies are missing opportunities. If you have a bullet proof system you can staff it with monkeys and still get MacDonalds. If, on the other hand, you chase and employ the very best talent, place them in a moral vacuum and ruthlessly reward profit above everything else you get Enron.

The good news is that the system can be changed and improved. Intelligence can be built into the corporate culture. For example the Toyota model – where any and every worker is encouraged to pull the chain that stops the assembly line. Actually lets talk some more about Toyota, the world’s most successful car company. It’s success comes not from hiring great talent, but by having great systems.

Here’s an example of the Toyota system at work. When GM closed its Fremont, California plant in 1982 it was one of the worst performing car assembly facilities in the USA. Absenteeism was running at nearly 20%, and there were problems with drug and alcohol abuse.

In 1985 the plant was reopened by Toyota. Far from starting afresh they rehired 85% of the original workers. But before the plant reopened the workers were trained thoroughly in the Toyota production system. In fact 600 of them were even flown to Japan. The result? The year the plant reopened it made some of the lowest cost and highest quality cars in the US and absenteeism was only 3%. A better system took a bunch of dud workers and made them effective. Just like Super Nanny says, it’s not about the kids.

What are the take aways?

None of this to say that talent doesn’t exist. Some attitudes and personalities are better suited to roles than others. But it is also true that the behavior of children and employees is very largely shaped by their environment.

Managers who blame staff for poor performance may be overlooking powerful opportunities to unlock their potential. When something goes wrong at work, particularly if it keeps going wrong, you can either say ‘Who’s to blame?’ or ‘Was the system to blame, and if so how can we fix it?’


“Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management”, Jeffrey Pfeffer, Robert L. Sutton. Harvard Business School Press.


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Kevin Biggar

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