It’s no secret that when employees can take their whole selves to work, performance excels. So why do companies stick to the ‘tell-sell’ then ‘yell’ approach to managing the workplace?  Employees seek to   contribute enthusiasm, passion, and fulfill a sense of purpose.  But once someone tells you you’ve screwed up and never to do so again – passive employees result.

Sadly, the majority of companies remain addicted to quarterly reports. Like crack addicts seeing crisis signs on every corner, business as usual carries on.  The message behind ‘command and control management style is: “Park your passion and energy at the door. We’re busy doing what we’ve always done.”

Disturbing disengagement statistics tell the tale. With 70 percent of employees disengaged, there is plenty of overlooked potential. Restoring care is essential. Transformation can’t be incremental. It’s way too late for that. I’m talking about radical transformation. The company regains confidence in its ability to run a marathon while staying flexible and able to course correct. Keeping pace with customer values, needs and expectations while also reclaiming your creative edge is a tall order. That is probably why there is a tendency to control the uncertainties.

Yet if a company knew they were on the brink of failure, the mindset and decision making shift would happen out of necessity. Toyota’s stellar reinvention in the 1940’s and switch to cybernetic principles is a well-known example. The question remains. Why are companies hanging on so persistently to the past? Is the problem complacency or a belief that it’s all under control? Is courage absent? Is it a matter of fixed narrow thinking? Or missing know-how?

I’ve puzzled about the untenable disengagement statistics. I have been equally puzzled by the assumption that incentives will fix the problem. Is management confusing busy, over-tasked employees with engagement? Perhaps it’s time to better understand the role of ‘power of the human spirit.’ After all, when you have a sense of belonging, know you are making an important contribution and feel valued, you’ll contribute full throttle. This isn’t a religious belief. It’s been proven in the performance of great workplaces where employees accomplish a challenging goal far faster than expected.

Take the case of Novo Nordisk, a Danish global pharmaceutical firm with offices in 75 countries and employing over 41,000 employees. In 2004 they decided to reduce their carbon footprint. Novo Nordisk asked, “How can we save energy and increase profits while investing in renewable energy (offshore wind power)?” and challenged employees to find energy savings to compensate for the expense. Note the focus of the question. It was not to ‘cut costs’ but to save energy. Seems subtle but the focus of the question activates (or not) creativity.

Their goal? Cut CO2 emissions by an absolute 10% from global production sites within ten years. Employees loved the challenge and quickly found the savings, achieving the goal in five years.  Empowered to make a difference, the company worked smarter without compromising requirements or spending more money.
Novo Nordisk’s sees itself as part of a living system – life itself. Author and investment advisor Joseph Bragdon points out Novo Nordisk’s concern with bio-ethics connects its human health products to the biological health of the planet. Further, “its goal of ‘positive net impact’ seeks to return more value to the earth than it takes in, creating value for its customers.” It’s a management philosophy that includes a major win for shareholders.

“From the turn of the century to year end 2014, Novo Nordisk’s shareholders saw their share value grow more than twelve times. In contrast the share prices of Merck, Pfizer and Lilly (a primary competitor in the global insulin market) all lost money.” (Joseph Bragdon)

In Novo Nordisk, decisions are rooted in the core value of health: ecological, systemic and financial. Rather than profit being their purpose for existing, an inspiring purpose drives their profit.

Everyone gains.

The ideas at the heart of Novo Nordisk’s management, and other companies that see themselves as part of a wider living system, aren’t new. Just focused on a wider benefit to the planet, and people. Prosperity is a natural outcome.
Companies relying on a traditional style of management are ignoring their true performance potential.

What are the signs that a company is clinging to the past?

1. A need to control creativity. Companies implementing Agile software development see negative tension between management and co-creating with the customer. Risk aversion and cost cutting mentality dominates traditional thinking. This doesn’t bode well because creativity is a chaotic process that can’t be controlled.
2. Decisions are based on politics, placing career advancement ahead of the company’s success. It has worked for many a CEO whose pay is tied to shareholder returns. It’s also a cyclical trap leading to death by leaking talent and money. Restricting purpose to solely generating a return to shareholder is uninspiring and limits growth.
3. Management is still telling employees what to do. The paradox is that companies say they want talent, yet insist on telling them how to perform. Give them a compelling enough purpose or goal and then step aside.
4. Single loop learning runs unquestioned. In other words, decisions repeat themselves based on past beliefs and assumptions about how the world works. Companies fall into the rut of recycling the past, so work hard to get nowhere. Constantly questioning assumptions allows you to iteratively adjust.

The level of leadership required to update management habits demands courage and a desire to be all you can be as a leader. To identify and rapidly respond to undetected disruptions, companies need all of their intellect, collective intuition and enthusiastic horsepower – without relying on the crutches of authority. Responsible leaders are in short supply.

Can the true leaders residing at every level in companies please step forward?

We need you.

Originally version published on the Huffington Post – Great Workplaces June 8, 2015

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