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Enhancing Organizational Performance

Archive for October 19th, 2009


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“Performance Review May Have Sparked NASA Shooting” screams a CNN headline. In Houston, the local police were trying to determine a motive for why a NASA contractor   fatally shot his boss and took another employee hostage before killing himself at the Johnson Space Center. It seems that this boss sent him an email performance review that was critical of his performance – performance review by email? NASA has said that they will review security procedures. I could not help but add in my mind “what about performance appraisal procedures”? Shouldn’t those be reviewed as well? It seems like a classic case of ignoring the underlying issue. If it proves out that the performance appraisal was the key, tightening security only gives the next person who wants to smuggle in a handgun a slightly greater challenge to overcome, rather than addressing the root cause.

Not too long ago on an employee survey in which attitudinal responses could be matched up to people’s performance appraisal rating, what we saw is that the largest gap between the highest rated performers and the lowest rated performers was “feeling valued by the organization”. Receiving a poor performance appraisal did not affect people’s intention to stay or leave; their feelings about the appraisal in helping them improve their performance, or a host of other potential actions. The one thing it did affect in this organization was the self-report by poor performers that they did not feel valued. So if the goal of this performance appraisal system was to make a certain group of employees feel less valued by the organization, it was working. If the goal was something else it was not.

In one manufacturing organization with a union, the goal (not officially stated) of the performance appraisal system was simply to document poor performance – “write em up”, was a commonly used expression. The thinking being that the organization needed to build a case in order to withstand the inevitable challenge from the union should they need to dismiss a person.

Meanwhile at the Russian News Service which controls a number of radio broadcast stations in Russia, good news is becoming official policy. The New York Times reports that the managers of the news service had implemented a policy that at least 50 percent of the news coverage on or about Russia must be positive. These apparent Kremlin allies also stated that opposition leaders could not be mentioned and the United States was to be portrayed as an enemy. “When we talk of death, violence or poverty, for example, this is not positive,” said one editor at the station. “If the stock market is up, that is positive. The weather can also be positive.”

I don’t know about you but I truly do believe in the benefits that a free press brings to society and this kind of manipulation makes my skin crawl. In one fell swoop the Russian News Service has made itself irrelevant and will now begin a decline into oblivion unless it changes course. By putting out 50% positive feedback as a “rule” it’s credibility that it is accurately portraying the news is zero and the Russians as they have done before will turn towards external sources of news to find out what is really happening.

Are people so fragile that they can “snap” upon hearing bad performance appraisal news and are they so easily manipulated that if you feed them a diet of pabulum that they will fall in line with official “policy”, actually believing that all is well due to a steady diet of good news? Of course the reality is likely to be where it usually resides, somewhere in the middle.

I was at a meeting recently where the facilitator put on a demonstration for the 100 or so people in the room. He told everyone to get up, walk around the room and randomly stop and describe to someone an issue you would like to do better upon and then listen to the advice the person had to offer you to improve in that area. Issues were things like “listen more” or “not rush to judgment” or “make more time for family” etc. The person you described your issue to, was supposed to offer one thing to you that you could try to improve in that area, preferably something that had worked for them. Two rules, you could not interrupt your advisor, you had to just listen and second at the end all you were allowed to say to the person giving you advice was “thank you”. At the end of about 20-30 minutes of this we all returned to our seats and were probed about what we thought about this performance improvement session. The results from the attendees were generally very positive. What did they like about this performance appraisal session? It was non-judgmental, it was non-threatening, and it was not done by someone who might have an ulterior motive or an axe to grind with you. So I could listen with an open mind and maybe get something out of the conversation. Maybe. 

How many of us could say that our performance appraisal systems which were designed to help improve the performance of the organization are non-judgmental, non-threatening and done in a truly unbiased fashion. Anyone? It would seem that the systems we have put into place to improve performance are designed in such a fashion as to make that noble goal fairly unlikely. Can it be that performance appraisal and organizational improvement are incompatible? Anyone care to try building one again?

In survey research I have yet to see a performance appraisal system that is well rated by the employees living under that system. Let’s make an assumption that the vast majority of people come to work wanting to do a good job. I think that is a safe assumption by the way. So if we were to create a positive working culture in the organization through tried and true principles and people want to do a good job anyway, maybe we should scrap our performance appraisal systems and develop “organizational improvement systems” and our conversations will be around what the individual can do to help contribute to organizational goals and what skills and abilities they need to develop to help make that happen. What about the 5% of the population that is not doing a good job and need to be eased out of the organization? I believe that their performance issues should not be addressed through the organization improvement system but should be addressed by a separate performance system, a system that would be irrelevant to 95% of the workforce.

What about organizations that tie performance appraisal to merit increase how would that happen if there is no appraisal of someone’s performance? How could we differentiate top performers for will get 4-5% increases from average performers who will get 3%. Do we really need performance appraisal systems to differentiate a 1-2 percentage point difference in salary increases? Seems kind of silly doesn’t it. We should be able to find a different path.

Organizations take a hit from an employee attitude standpoint when they are seen as not doing enough to correct poor employee performance. And in fact they take even more of a hit on that when the organization is a unionized environment. In other words people who are doing a good job and working hard want the others who are around them to be working hard and doing a good job as well. However, designing performance appraisal systems that are needed for 5% of the population, yet are onerous to 95% seems to be a monumental misjudgment.

If our goal is to create superb working environments where people can fulfill their potential and organizations can excel at delivering products and services to their customers we need to roll up our sleeves and get to work, we have a lot of redesigning to do.

Written by Jeffrey M. Saltzman

October 19, 2009 at 11:21 am

Living forever in the South Bronx

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There is an old story that goes something like this about a very rich man, lets say he lived in Manhattan, who had everything he wanted out of life except for one thing – he wanted to live forever. He struggled mightily with trying to figure out how he could accomplish that goal. Finally he came to the realization that he needed the assistance of others if he was to accomplish that goal. He thought about consulting some I/O Psychologists he knew, or going to see his doctor, but he finally settled on the smartest people that he knew, the New York council of elders.  He went to the council of elders and he said, “I am a very rich man and I want to live forever. If you can tell me how I can accomplish that I will give the city ½ of my wealth.”

Well to the council of elders in the perpetually cash strapped city this was an offer that they just could not refuse. So they decided that they should figure out a way for this rich fellow to live forever. After much deliberation, the demographer in the group said, “I have been studying my charts and tables, and I have found that as far back as records have been kept, that no rich man has ever died in the South Bronx. So if the rich man were to move to the South Bronx he could live forever.” Well the elders were astonished. They decided to study the charts for themselves and they too came to the conclusion that no rich man according to their records has ever died in the impoverished South Bronx.

They went to the rich man and said, “We have found a way in which a rich man can live forever”. They explained to him that he needed to move to the South Bronx and asked for their money. Well, the rich man not being a fool said to them, “I will give you half the money now and half when I have proof that I will live forever in the South Bronx”. The elders protested and said that they had found the answer that the rich man was looking for, but there was little they could do as the rich man was very shrewd.

The rich man moved his family and all his possessions to the South Bronx and in due course he passed away, the city never got the second half of his wealth.

Morale of the Story: You can conclude anything you want based on your point of view, statistical misinterpretation and depending on how you are measuring it or not measuring it as the case may be, or you can’t live forever in the South Bronx, only in Hoboken.    

When we measure organizational performance, while not as obvious as in the above story, sometimes conclusions are based on what is not being measured as much as what is being measured or the misinterpretation of statistical results and that can clearly lead to erroneous outcomes.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

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October 19, 2009 at 11:10 am

Virtuous and Deleterious Cycles ©

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Here in the northeast the sap is running, and sugaring operations are underway. Maple tree farmers have inserted their taps and are collecting the sap from the Sugar Maple trees which will be condensed into that golden color amber that we all love so on our breakfast treats. For me it is the ultimate signal that spring is just around the corner and a harbinger that I will soon be able to get out into the garden and begin planting for the new season; the beginning of a new cycle.

An article in the local paper last week described how the Sugar Maples may be threatened due to climatic changes, it may become too warm for them to survive in their current locations. While the trees themselves in their current locations may perish, the Sugar Maple may have to retreat across our northern border to Canada in order to survive as a species and hopefully sugaring as an industry.

A common question that I get about employee survey results in organizations revolves around the chicken and the egg question, another kind of cycle. The questions generally goes something like this: “Do you get positive survey results because the business performance is good, or does good business performance lead to good survey results?” Ah causality….it can be a very difficult question to answer, but in many respects it is the wrong question. Correlations, regressions, and other commonly used techniques to analyze employee survey responses simply describe the current state of affairs and do not indicate causality. Without true experimental design, which is very rare in this kind of field work, causality is at best based on assumptions.

It is certainly true that in highly performing organizations that generate lots of profits, it is easier to do things, like providing sizable raises, bonuses, great heath care, or other opportunities that will impact employees perceptions about the place, about being part of a “winning team”, but how did that “winning team” get attracted and begin performing at the level necessary to allow the organization to become highly performing in the first place? Rather than debating that chicken or egg argument, suffice it to say that organizations that can get on that “virtuous cycle”, a self-perpetuating cycle of higher performance, will outperform those that are caught up in a “deleterious cycle”, a downward spiral of performance.

So it isn’t the debate itself that is important, in fact the debate itself is a waste of energy and time, what is important is to get onto that virtuous cycle. There is not one assured way of doing that, but by looking at organizations that seem to be on those cycles a pattern seems to emerge, a pattern that it would behoove others to emulate. Organizations that are on virtuous cycles can be described as having some combination of the following: a brand that others aspire to, that attracts other high quality workers, high quality products, dominant market share, paradigm changing innovations; a work force that feels clear on what the organization is about and their role in it, a work force that is given the tools and resources they need to deliver on organizational goals and a workforce that feels equitably treated given what they put into the organization and that they have a positive, fulfilling future should they stick around with the organization.

Do you create the business performance or the environment that nurtures it first? The answer is both. One does not cause the other, one is not a precursor to the other, but rather putting both of these aspects into place creates the environment that allows for organizations to get on the virtuous cycle.       

Deleterious cycles can kick in at any time in organizational life as well and they need to be scrupulously guarded against. I remember hiring a PR firm a number of years ago that charged what I thought was an outrageously high amount for getting my company publicity in relevant industry and general publications. After about a one year period I expressed my displeasure with their performance. They of course felt they were being fairly compensated for their work but suggested that if I was not happy with their performance that they could charge less per month and unstated but assumed – do a bit less. Rather than accept this, I viewed this as a downward or deleterious cycle. I would pay less because I was unhappy, (I was not unhappy about the amount, I was unhappy about what I was getting for the amount), and because I was paying less I would get less performance, which would likely result in even less success in terms of getting the company into the relevant press. I changed to a different PR firm rather than begin that downward spiral. 

Another type of “self correcting” deleterious cycle can be described by looking at tax codes in developed countries. Over a period of time the tax legislation becomes more and more complex with the only beneficiaries being the tax accountants and lawyers who get to charge more for completing increasingly more complex tax forms. One reaction to these increasingly burdensome tax laws and rates is to look for places where some relief can be obtained. The Economist in a recent edition describes one benefit of tax havens, those small off-shore locations where people and organizations can shelter income, as a correcting mechanism for getting countries off of the deleterious cycle of increasingly onerous tax legislation. They state that when a country feels enough pain from these tax shelters that it will cause them to examine and potentially spur overhauls to their tax codes. (Or is that wishful thinking?) This describes how an external influence, tax havens, becomes a key to getting an organization (a country in this case) off of a deleterious cycle, should they choose to take advantage of it. Similar kinds of pressures, correction mechanisms, were previously felt by the automotive industry as the Japanese developed higher quality and better cars than Detroit. These external influencers, that can be viewed as potentially beneficial, can be seen in numerous kinds of situations.

What is interesting now is that organizations instead of simply adapting to outside pressures to correct deleterious cycles in their performance are able to take advantage of others virtuous cycles in this era of globalization. But it leaves one wondering, if organizations are taking advantage of the virtuous cycles to be found elsewhere, does that mean that they feel less pressure to correct fundamental deleterious cycles that exist internally, is it a way of avoiding dealing with some problems or is this simply a new way of doing business?

Written by Jeffrey M. Saltzman

October 19, 2009 at 10:58 am

Surrogate Measures

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We are surrounded by surrogate measures, they exist everywhere in life. A surrogate measure is when a particular measurable or observable condition is assumed to be meaningful about an underlying state or condition. They are usually used when it is difficult, impossible or unknown how to measure the underlying condition directly.

For example last summer we had the first tornado in Westchester County in 30 years. There was much debate regarding whether there was a tornado, and if so where was it on the Fujita scale. A tornado expert from NOAA showed up and looked at the damage, determining whether cars had been picked up, whether roofs had been torn off and whether trees had a twisting pattern around their breaks, he then pronounced that we had a strong F1 or a weak F2 tornado. All of these signs of damage are surrogate ways of measuring whether there was a tornado and what its wind speed was.

When a car is involved in a serious accident, the police are very busy afterward taking measurements of skid marks and other signs of speed, failure to yield and other indicators of what happened. All of these measures are surrogate measures of what actually happened since there are no printouts yet available from the cars themselves regarding “black box” measures, as is available in airplanes after an accident, logging the actual conditions that led to the accident. These measures are made in order to make assumptions about those conditions.

Surrogate measures abound in the medical world with doctors examining you for all kinds of signs of underlying medical conditions that are not being directly observed. These initial signs may lead toward more involved tests, which may be more evolved or advanced surrogate measures to help further define your ills. Unfortunately, sometimes the actual extent of the illness can not be determined until the surgeon cuts into you and takes a look or a biopsy of the tissue itself is done. The fact that autopsies are still done to the extent that they are indicates the limits of surrogate measures in medical diagnosis.

A subset of surrogate measures that has always intrigued me is called unobtrusive measures. When surrogate measures are used to make assumptions about an underlying condition in such a way that the people affected may not even realize that they are being measured, the measurements are called unobtrusive. An example would be looking at the wear and tear of floors in museums to determine the popularity of exhibits. The assumption being made that those exhibits surrounded by excessive wear and tear are more popular then those holding up well (as opposed to the possibility of poor quality flooring in front of those exhibits).

A whole set of potentially bias related surrogate measures are used when we observe people, their appearance, their dress, hair length, skin color, age, gender etc. and use these observations to make assumptions regarding their beliefs, expected behaviors or capabilities. These types of surrogate measures which can be quite poorly correlated to the reality of beliefs and behaviors will often lead to inaccurate conclusions and come about because of a tendency of people to quickly categorize others – often inappropriately.

Organizations and Organizational Psychologists use a whole host of surrogate measures in determining or making assumptions about underlying conditions in organizations and for use in employee selection.  Surveys of organization attributes are measuring those attributes using a series of surrogate measures. If we ask someone if they have the training they need to do their jobs, we are surmising that if they answer affirmatively they will actually be capable of better job performance than someone responding in the negative. Some of the questions used in organizational surveys are better surrogate measures than others and it is the role of the survey expert to write questionnaires that use the best measures possible – those surrogates that will be better indicators of actual or potential organizational performance. Indices tied to constructs (e.g. loyalty, engagement) are simply average of surrogates or construct surrogates.

Let’s take a step back for a minute and ask ourselves why are we doing organizational surveys in the first place? In my opinion, the whole purpose of conducting organizational surveys is to help improve organizational performance, the effectiveness and efficiency of the organization. Many make the assumption, as do I that having an environment that is perceived positively by the work force and has certain attributes can help organizations perform. The survey itself then is a set of surrogate measures asking people about the characteristics of the organizational environment.

A well-done organizational survey uses the best possible surrogate measures to make assumptions about the actual conditions within the organizational environment – those conditions that have been demonstrated to be linked to important organizational outcomes. Surrogate measures within many fields have evolved over time, with more predictive surrogates which are better measures of underlying conditions replacing less informative ones. It is the role, the responsibility, of organizational psychologists and other survey experts to push the field and continue to search for better surrogate measures to help those that entrust us with consulting to their organizations.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

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October 19, 2009 at 10:51 am

The Organizational Obituary

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“After 80 years of selling sumptuous hand-engraved stationary and other writing accessories, the luxury stationer Mrs. John L. Strong is shutting down.  The venerable Madison Avenue company, whose sturdy note cards and lined envelopes were sold in Barneys New York and used by European royalty, said Thursday it would close its Madison Avenue atelier and its boutiques…Founded by Flora Strong during the Depression, Mrs. John L. Strong was the stationer of choice for well-heeled brides and socialites.” (New York Times, May 22, 2009)   

Why do we age? The easy answer is that time passes and we grow older. We age. Unstated in that answer is the notion that aging at some point brings with it a deterioration of physical and mental abilities. The perception of that deterioration has been the source of ageism and phobias, discriminatory behaviors against older folks and a fear of becoming old, fostering a youth culture where many feel that they must look or behave younger than they are in order to avoid being labeled as “old” and “obsolete”.

What was the oldest company in the world, a construction company located in Osaka, Japan and founded in the year 578 was liquidated in 2007. Four of the next ten oldest companies are either breweries or wineries, two are hotels (hopefully with new mattresses and hot water), one is a restaurant, one produces salt, one is a foundry making bells, and one makes religious artifacts. What do the oldest of the old companies have in common? Many of them are still run by the founding families and some boast of being run by the 40th+ generation. These companies have managed to survive through wars, recessions, depressions, catastrophes, succession issues, changing technology, markets and managements. Detailing what has allowed them to survive those challenges would be the subject of interesting research but it has yet to be done. (If anyone wants to fund this work I would be happy to take it on.)  But those companies are the exception, a tiny sliver of the proportion of the companies out there, the oldest of the old, which is indeed a very small group. If you look up when the 100th oldest company was founded you are already up to the year 1780, practically in modern times.

Organizations clearly go through life-cycles or aging, from startup to middle age, to maturity and old age. And while some are able to survive for the long-term, others pass through these “life stages” rather quickly. The life-stages that an organization experiences might not be as closely tied to the passage of time as human aging, but rather to organizational behaviors that can be occurring at any time after the organization’s founding. One has to wonder if older organizations, those exhibiting signs of later life-stages should be somehow revitalized or allowed to pass away and whether any insight can be gained by comparing what happens to individuals as they age vs. what happens to organizations as they age into more advanced life-stages.

A story in the New York Times (May 22, 2009) describes what may be clues to a lucid human old age, typically enjoyed by only one out of 200 of us. “These are the most successful agers on earth, and they are only just beginning to teach us what’s important, in their genes, in their routines, in their lives,” said Dr. Claudia Kawas a neurologist at University of California at Irvine. “We think, for example, that it is very important to use your brain, to keep challenging your mind, but all mental activity may not be equal. We’re seeing some evidence that a social component may be crucial.” (I can’t help but wonder from that statement whether Facebook, Myspace, LinkedIn or other social networking site heavy users will outlive the rest of us or will that privilege fall only to those who interact in person).

Dr. Osei Darkewas from the University of Illinois at Chicago reviews the predominant biological, and sociological theories of why the deterioration associated with aging occurs.  His findings:

Biological theories include:

  • Wear and tear theory – the body simply wears out from constant use just as a machine would
  • Autoimmune theory – the tendency of the body to reject its own tissues over time
  • Free radical theory – certain chemical compounds accumulate over time causing damage and aging
  • Programmed cellular theory – every organism is programmed to die after a certain number of years, possibly because it adds to reproductive and survival fitness at the species level
  • Somatic mutation theory – an accumulation of mutations eventually results in functional failure and death
  • Homeostatic theory – the inability of the body to maintain stable levels of various chemical elements over the long term.

Social theories of aging include:

  • Disengagement theory  – a gradual disengagement of the individual from society increasing the rate of aging
  • Role theory – loss of identity and self-esteem associated with role loss
  • Activity theory – the more active the more satisfaction with life the elderly have
  • Political economy theory – states that programs aimed at servicing the elderly are more beneficial to capitalist interests than the elderly
  • Continuity theory – the substitution of new roles for lost ones slows aging
  • Age stratification – unique aging issues associated with a cohort (a generation) because of environmental and historical experiences
  • Modernization theory – role of elderly tends to diminish as the level of industrialization of the society increases
  • Exchange theory – aged have less power due to having less resources, resulting in their isolation and deterioration
  • Life course perspective – the accumulation of biological, sociological and psychological issues resulting in aging 

The reasons as to why we age are most likely not simply one of the theories posited above but rather it is most likely to be a combination of factors that cause the human body to deteriorate over time.

Jim Collins has a new book out called “How the Mighty Fall”. He states that he has come to see institutional decline as a “staged disease”, harder to detect but easier to cure in the early stages. He lists 5 stages of organizational decline that in his view lead to organization death including:

  1. Hubris Born of Success
  2. Undisciplined Pursuit of More
  3. Denial of Risk and Peril
  4. Grasping for Salvation
  5. Capitulation to Irrelevance or Death.

But these stages of organizational decline seem to be the emergent characteristics of perhaps underlying etiology. Let’s speculate a bit on how the theories used to describe human aging might be used to describe organizational aging.

  • Wear and tear theory – The equivalent notion for organizations would be to just keep doing what the organization has done before and been successful at, not re-examining assumptions or approaches to the business. Over time the tried and true might just wear out as it become more and more obsolete. However, countervailing this effect would be organizations that are constantly renewing staffing, products, processes and assets. However, if an organization did not emphasize renewal of customers by attracting new ones and renewal of its product line to keep it up-to-date this could be a contributing factor to organizational aging. 
  • Autoimmune theory – I once heard a joke that the definition of a consultant is someone who comes from more than 50 miles away. The notion being that some organizations reject the advice given by internal staff because they are too familiar. So a heavy dependence on external consultants while disregarding internal staff could be a contributing factor to organizational aging.
  • Free radical theory – this would be the notion that organizations continue to put band aids on their problems rather than fixing the legacy issues and systems that are the root cause. Over time the buildup of band aids can cause the entire system to collapse and certainly opens the door to competitors not encumbered with the legacy systems. 
  • Programmed cellular theory – to me this is one of the more interesting notions. We die because it is in the best interests of the species that we die so that more fit off-spring potentially with adaptations better suited to the current environment can take our place. If we were to live forever there would be slower reproduction and slower evolutionary changes making the species more vulnerable to extinction should the environment change. If this is correct you could draw the conclusion that organizations that have “run-their-course” should be allowed to fold so that more evolutionary fit versions can arise to take their place.
  • Somatic mutation theory – organizations that continually mutate, trying new things in an effort to always grow, perhaps Jim Collins’ “undisciplined pursuit of more”, will eventually build up enough unsuccessful components that organizational death will occur.
  • Homeostatic theory – the inability of the organization to maintain stable levels of various needed elements over the long term, for example innovation, risk-taking, entrepreneurial, meritocracy, integrity etc.

One vaccination that organizations seem to be trying to slow or prevent aging is sustainability. In one ad that ExxonMobil has running they tout their approach to “citizenship for the long term” or sustainability which in their terms means balancing economic, environmental and social goals. Similar to what many other organizations have called the “triple bottom-line”. They list in the ad those things they are doing in support of this notion, including: investing to deliver new energy supplies, developing energy efficient technologies, hiring and developing local employees and talent, reducing  emissions, helping consumer use energy more efficiently, supporting social, health and education initiatives, increasing safety and reducing spills. The ad states that in turbulent times a long-term approach is vital to organizational survival. I think that many of these initiatives, if more than words in an ad, could in fact help slow down the aging process of an organization as well, if coupled with a systematic internal refreshing of how they are executing on their work. But on the other hand, in another section of the same paper is a story about how Exxon-Mobil is being sued by villagers in Aceh Providence for hiring soldiers who carried out human rights abuses while guarding a pipeline, a sure sign of difficulty in executing on their noble aspirations.

What can an organization do to prevent their own organizational obituary, especially in these trying times? The data suggests the following:

  • Improve on the way you conduct business

–        Use the current situation as a window of opportunity to improve internal processes/relationships, tackle issues that will increase effectiveness, but perhaps have been put off, and do so in a visible/communicative fashion.

  • Reinvigorate the organization’s competitiveness

–        Insure that your services/products are competitive, current and better than the competition. Understand the current market and demand for your product/services and deliver a product that will be meet those current needs.

  • Provide current reassurance

–        Assure that organizational members can thrive in the current environment, providing reassurance where possible and communicating extensively. Create an environment of fairness and equality.

  • Provide longer-term alternatives

–        Provide mechanisms (e.g. experiences, training) where individuals feel equipped to thrive/prosper in alternative environments to the current organization. The value proposition to employees is to provide skills and experience that equips them for life and a meaningful career, not for a specific job. 

© 2010 by Jeffrey M. Saltzman. All rights reserved.

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October 19, 2009 at 2:24 am

I never met Sam Maloof

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On Thursday May 21, 2009, Sam Maloof died at the age of 93 at his home in Alta Loma, California. I never met Sam Maloof, I would have liked to.

Sam was a craftsman.  He made furniture and was especially well know for a rocking chair design that he created. His work was so well respected that his rocking chairs went for $20,000 a piece (last year one sold at auction for $51,000) and the waiting list for one was years long. He made between 50 and 100 pieces a year and some of those pieces live at The White House, The Metropolitan Museum of Art, and The Philadelphia Museum of Art. The Smithsonian organized an exhibition of his work in 2001. If you ever saw one of his pieces you would know it. You would be unable to keep your hands off of it, with its highly polished, ultra smooth finish and appealing curves. Ray Charles, the blind musician, and another craftsman, never saw Sam’s work, but he had felt it, and described it as furniture with soul. When Ray visited a friend’s house that had a Maloof chair, the story goes, the first thing he wanted to do was to touch the furniture made by Sam.

The joy that Sam got out of creating his masterpieces kept him working late into his life. He taught classes on his unusual techniques (e.g. his joinery used no screws or nails), which were very well attended and his house over the years has become a museum, for some a shrine to finely crafted work. His limited production made his pieces somewhat rare, but he felt strongly that he pieces were to be used, to be enjoyed as part of everyday life. Sam kept no secrets and he freely shared his knowledge with those who desired to learn.

In our mass produced, injection molded, off-the-shelf world, it is a refreshing feeling to come across something that is so clearly crafted, so evidently clear that it has been labored over and cared about, a piece of work that has soul. But can we afford it? How many people out there can spend $20,000 on a rocking chair? The demand for Sam’s pieces greatly exceeded his ability to produce and while he had helpers in his workshop, if he had so chosen, he could have vastly expanded his production lines putting on staff and overseen production of much larger quantities of very high quality furniture. Greatly increased numbers could have enjoyed his work and his contribution to design. A hint regarding Sam’s state of mind regarding this option comes from his creation of the Sam and Alfreda Maloof Foundation for the Arts and Crafts and his testimony in front of legislative bodies urging support for craftspeople so that craftsmanship would not die out. And even as his pieces were selling for 100 times their original price, he titled his autobiography Sam Maloof: Woodworker. “Woodworker” he said was an honest word.

We have been experiencing resurging demand for crafted products and the challenge to organizations is how to meet that demand in as economical a fashion as possible while maintaining the crafted nature of the product. The balance between those two is a balancing act that organizations have struggled with for quite some time.

Take a look at the history of beer production in the USA, which has enough of a history that is has gone through the cycle of crafted, to mass production, back to a desire for craft. While there was small scale production of ale and beer prior, in 1612 Adrian Block and Hans Christiansen established the first known brewery in the New World on the southern tip of New Amsterdam (Manhattan). To give you a sense of its importance remember the Pilgrims did not land at Plymouth until 1620. At the beginning beer production was the province of small time producers and by 1873 there were 4131 breweries in the USA. Consolidation began in 1889, as organizations looked for economies of scale and for market dominance with the suggestion that Schlitz, Pabst and Blatz merge. In 1899, twenty-one breweries in Pittsburg merged, in 1901 ten in Boston and 16 in Baltimore and 1916 saw the merger of six in San Francisco. By 1940 there were only ½ the number of breweries as in 1910. There were 407 left by 1950, and in 1961 there were 230 only 140 of which were independent. By 1984 the market held only 44 companies and was dominated by fewer still mega-brands (Anheuser Busch, Adolph Coors, Miller, and Stroh’s), but also 1984 saw the emergence of the microbrewery, with people looking beyond the mass produced and the Manhattan Brewing Company in SOHO become the first east coast microbrewer.  By 1995 there were 500 micro-breweries in the USA with 3 to 4 new ones opening each week. Will the pendulum of large scale mass production vs. uniquely crafted production continue to swing back and forth? Likely so as evidence by what is happening to organic dairies in the northeast.

Organic dairies up until recently were booming. Milk production has been feeling the pressure over the years to consolidate in order to create economies of scale and more efficient markets and fewer, larger producers were the order of the day. Local family farms that switched to organic methods were able to weather the storm with a product what was much in demand and commanded a premium price, until people could no longer afford the price. With the advent of the recession and the rise in transportation costs of moving feed from the mid-west, organic farmers in New England are feeling the pinch with many considering shutting down. Organic milk demand is estimated to be down about 20%, as people look for ways to cut their budgets (NY Times, May 29th). People prefer the organic product, were willing to pay more for it, but in times of economic uncertainty they are willing to buy from the more mass-produced, hormone and antibiotic laced alternatives since they are more affordable. When the choice is no milk on the table or non-organic produced milk, it is an easy choice for families.

Organizations will forever be balancing the need for better efficiencies and the demands to become more cost effective with the desire on the part of consumers for a “crafted” high quality product. The markets likely have room for a mixture of both and which is more popular at what point in time will be strongly impacted by environmental variables.

I never met Sam Maloof, but I would have liked to. I very greatly respect his devotion to his craft. I think I would have learned a lot from him and not just about woodworking.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

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Written by Jeffrey M. Saltzman

October 19, 2009 at 2:19 am

The Oy Definitions and Behaviors©

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I was trying out a new kind of program and was analyzing some organizational data. As I looked across a large number of organizations some patterns emerged of organizational attributes that I thought I would share. The new program I was using had some strange properties and it seemed to come up with some unusual categorizations. Here you go.

K’nocker Organization  – An organization that is too big for its britches, a big shot organization.

Kvetching Organization – An organization that is always complaining about market conditions or execution or pricing power or…just always kvetching.

The Fars Organizations – Fartootst, Farmisht, Farchadat – essentially an organization that is mixed up and confused.

Shlemiel Organization – A simpleton organization – not sophisticated in its thinking.

Shnozzle Organization – An organization that can smell which way the wind is blowing and is aware of changing market conditions. Sometimes shortened to the Shnoz Organization.

Shtarker Organization – Strong, successful organization to the point of boastfulness.

Chutzpeh Organization – An organization willing to tell its customers that it knows better than they do what they want.

Shmoozing Organization – An organization with an emphasis on marketing.

Shmaltzy Organization – A fancy organization, literally dripping with fat (meaning fanciness).

Tchotchkes Organization – An organization that likes to produce little tokens for customers to help them remember the organization.

Shpritzing Organization – When workload is very high and everyone is sweating you have a shpritzing organization.

Shlimazel Organization – Can’t execute, can’t get things right.

Shmegegge Organization – Organization focused on petty issues – can’t see big picture.

Shmatte Organization – Literally rags or a piece of cloth – an organization that tries to get by on a shoe string, everyone works with shmattes (commonly used to describe someone’s clothes – what shmattes are you wearing?)

Shmeer Organization  – When everyone is spread really thin, trying to cover multiple tasks. (Often used when describing how much cream cheese you want on your bagel – “give me a shmeer”).

Kosher Organization – One where everything is ok.

Traf Organization – Opposite end of the kosher scale.

Tzadaka Organization – A righteous organization – operates with very high integrity and is generous with its success.

Bupkes Organization – Literally “beans and goat turds”, an organization that gives nothing to it employees or customers.

Dreck Organization – producer of low quality goods and services.

Dybbuk Organization – An organization condemned to wander aimlessly between small profits and small losses, not growing and never really able to accomplish anything because of its sins.

Golem Organization – A superstitious organization, one that thinks it can create new job families, made out of mud and sticks, to solve its problems.  Usually found in Prague.

Chelm Organization – Organization populated by simpletons and fools.

Bubeleh Organization – a term of affectation for an organization, an organization that is spoken fondly of, “my bubeleh organization”.

Yenta Organization – Gossip and the rumor mill are very strong in this organization.

Tsedrayt Organization – An organization without a clear mission or goals.

Tsuris Organization – An organization that gives everyone grief, aggravation and trouble.

Klutz Organization – where much rework is stumbled through.

Nebbish Organization – Where a decision never gets made, or if made will likely be changed – maybe.

Noshing Organization – One where every meeting is accompanied by food.

Mamaloshen Organization – Organization that makes up its own “mother tongue” makes heavy use of acronyms and other made-up words.

Mentsch Organization – Honorable and decent, an organization filled with good people.

Maven Organization – Organization with leading edge science and processes, expert, authority.

Toches ahfen tish Organization – Organization where accountability is high.  (Literally your rear-end is on the table). 

Toches-lecker Organization – One where everyone is managing upwards. A brown-noser organization. 

Shelping Organization – One where there are not enough chairs and everyone is shelping chairs from room to room when there is a meeting.

Oy – a Yiddish exclamation of exasperation often used as one moves chairs from room to room.

Written by Jeffrey M. Saltzman

October 19, 2009 at 2:15 am

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