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Social Contracts and Social Fabrics

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A few weeks ago I was asked to reflect on and present at a conference on what 30 years of studying people at work have taught me about the topics of Social Contracts and Social Fabric. To be honest at first I wasn’t exactly sure where to start, but the conference was being put on by some old friends and it was in Geneva, Switzerland so I decided to participate. For this topic I began thinking about all the employee survey data I have collected and examined over the years (thousands of organizations) and the various types of organizational uses that this data has been put. Importantly, the conference organizers were asking about my opinions and even though my opinions are informed by data, they wanted me to go slightly further and inject some beliefs that have arisen from the research, even if I did not have hard data on the topic. I ended up having much more material then I could possibly present in the time allotted so in the end I had to shorten what I spoke about, but I wanted to present some highlights here.

There are a lot of misconceptions about people at work. Some of those misconceptions center on what people want out of the work environment. Other misconceptions center on differences that people have about work that are driven by generation, gender, geography or ethnicity.  And if you make your living looking for differences between people, differences can be found. However, what people have in common is much more substantial and important and we would be better off focusing on our commonalities than our differences. Most, if not all of the differences that are cited in the popular press is the product of confounding variables (such as environmental situation, economic conditions or life stage) that are rarely taken into account when reporting on people at work. Some samples of the myths that have arisen include:

  • Younger people have different drivers of what they want out of a job than older people;
  • Older workers are more loyal to an organization;
  • Older people don’t want to learn new things – especially technologically oriented things;
  • Everyone is unhappy about their pay;
  • People with a lot of work to do will be less positive about work than someone with little to do;
  • Chinese, Bangladeshi, Vietnamese, Thai, or other 3rd world workers don’t mind the working conditions and hours to which they are subject.

The list can go on and on, but in general these kinds of statements are usually given by people who have no data to back them up, or the data they do have is suspect. Whenever I talk about this topic I am reminded of a scene I came upon in Indonesia numerous times. In Jakarta there are sewage swimmers, workers who, wearing nothing more than a pair of shorts, immerse themselves in the open sewers to remove blockages that could prevent the sewage from flowing. I have never had an opportunity to study these workers to ask them their opinions, but when I have seen them, I am convinced that their concerns and what they want out of a work environment, the fundamentals, would be little different than the concerns or desires that you or I have. So how can they submit themselves to conditions so foul that it will most likely shorten their lives?

If you define organizations broadly, and I do, fundamentally, people join organizations to achieve goals that they can’t do alone. And people are members of many, many kinds of organizations. Everything from where you work, to where you study, to volunteer organizations you belong to, to the city or state you live in, your country, your immediate and extended family, any organized religious group to which you belong, they can all be thought of as organizations. If you add up all the different kinds of organizations to which we all belong, and the rules by which they operate, you have a society. The society in which we live is an amalgamation of all the organizations which are operating in that space. This notion is nothing new and Socrates uses this kind of argument in explaining to Crito why he must accept the death penalty that has been meted out. He explains that society had created conditions that allowed Crito to be born, to live a good live, to achieve. And when Crito violated the rules of that society, as a society member, he must accept its punishment rather than flee.

Over the last 30 years it is pretty clear that on the fundamentals, what people want from the organizations in which they work there has been very little or no change at all. Show me someone, anyone, anywhere in the world who doesn’t want to be treated with respect and dignity at work. Or someone who doesn’t want to feel like they receive fair compensation for effort expended. Or someone who doesn’t feel that the time they spend in the organization will hopefully lead to a more positive future either for themselves or their children. The differences that are often cited between generations or other demographically defined groups of people (e.g. men vs. women, minority vs. non-minority), such as expected time to promotion, safety, or desire for job security, have almost nothing to do with who the workers are as people and everything to do with the economic and social conditions in which they are imbedded. It is also true that every characteristic, such as desire for job security, or expected time to promotion, or risk tolerance will express itself as a distribution due to individual differences, but those individual differences are not driven by the traditional demographic characteristics to which they are often attributed.  In general, within any of the traditional demographic groups you can find a distribution, a spread of the expression of a characteristic (e.g. risk tolerance) that will be greater than the differences between demographic groups.

Due to this, over the long-term, the end state of globalization and the social contracts in which it is imbedded will not be driven by governments or by the multi-national corporations. The end state of globalization will be driven by what people want and what people want is pretty much the same thing everywhere. Now, there are individuals, governments and corporations who take advantage of discrepancies that exist in social contracts to pursue their own agendas, but over time these social contracts will evolve and the ability to take advantage of the discrepancies in social contracts will diminish.

So for instance, a corporation or other organization, in its perfect world, would want to be able to do whatever it wants without concern of oversight, regulations, prosecution or penalties. And the individuals who run these organizations would want any crime committed on behalf of the organization in pursuit of those goals to accrue no personal liability. While there is a desire for praise and recognition for what the individual achieves, their contribution to the organization, there is also a desire for anonymity within the organization, being able to hide behind the organization’s “walls”. What organizations also want though is not to have other organizations, perhaps more powerful than they are, to take advantage of them. So organizations, to achieve a balance between treatment given and treatment received, are willing to abide by the social contracts/the social fabric as currently defined by society.

As humans, of course, we are all subject to the flaws inherent in being human. There is always a person or group in power or an organization that is willing to live by an existing social contract which is in its favor until, as society changes, that social contract must change. There can be resistance by those who have benefited from the existing social contract to make changes to that contract for it may have benefited them financially, socially, or simply reinforced their beliefs. On a larger scale, different forms of government, (e.g. democracies, dictatorships or authoritarian rule), also have different social contracts in place (e.g. who gets to vote if they vote at all, access to basic health, shelter or food, who gets to marry) and while there are differences in these social contracts, what people globally want, what they find important is fundamentally the same.

This combination, I believe is at least partially responsible for the inexorably slow but consistent march by humanity to more tolerance and freedoms as well as societies with less violence for people over time. We may take three steps forward and two steps back, but over the long term we are moving in a consistently more liberal and tolerant direction. Why is the march of history in that direction? Because people are fundamentally the same and want the same things out of life that everyone else does.

Multi-national corporations have chased various social contracts that exist by location to maximize their profits. Looking for low standard of living, low cost environments, and regulatory-free environments to manufacture or provide services from. But there is an inherent conflict in that the social contracts/the social fabric in the locations that allow for profit maximization over time will change. It may take a long-time, likely too long, but basic salaries will rise, working conditions will be forced to improve, regulatory oversight to insure quality standards and lack of worker abuse will be put into place etc. And the ability to chase a social contract that is way out of whack with other social contracts will diminish.

Humans want to place their faith into something and due to that we have a tendency to ascribe even random events to intelligent entities, or we see patterns to events where none may exist. Built into all of us there is a desire to allow some entity, which is more knowing or more powerful than us to provide guidance or direction. Some put their faith into their religion, some into science, some into their political leaders, and some into their leaders at work. Me? I’ll put my long-term faith into humanity as a whole as our humanity allows us to reach beyond where we are, even if sometimes in the short-term we will fall short. As people together, we will determine our own future.

© 2013 by Jeffrey M. Saltzman. All rights reserved.

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Written by Jeffrey M. Saltzman

December 1, 2013 at 12:31 pm

Energizing Against Mediocrity in Organizations

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Organizations are companies, producing products and services for sale, but they can also be volunteer fire departments, bridge clubs, reading circles, religious organizations, or schools. Let’s define an organization as any group of people who get together for the accomplishment of shared goals that are better and more easily accomplished together than by any individual alone. And let’s define mediocrity as being average or similar to other organizations. With some rare exceptions, the last thing an organization wants is to have its products or services to be viewed as hum drum, just like anyone else’s.

Imagine you are looking into a room with a divider down the middle. On one side of the divider there are 2000 molecules of oxygen and on the other side there are none. There is a hole in the divider allowing the oxygen molecules from one side of the room to move to the other, if in their random bouncing around they perchance pass through the opening. At the beginning of this thought experiment, when all of the oxygen is on one side of the room, you have a greater degree of order than when some of it begins to diffuse to the other side. How many ways are there (various combinations of molecules) to have all of the oxygen molecules on one side of the room while the other side has none? The answer is that there is only one way to accomplish that. How many ways are there to have one oxygen molecule on one side of the room and the other 1999 on the other? The answer is 2000, because any one of the 2000 molecules could be the one to move the other side of the room. Now, how many ways are there to have 2 oxygen molecules on one side of the room and 1998 on the other? The answer jumps to 1,999,000, because there are that many combinations of any 2 molecules that can theoretically move to the other side of the room.

So if you think of perfection as having all the oxygen molecules on one side of the room, neat and tidy (a state of low entropy), there is only one way to accomplish that, and as you move away from perfection (a higher state of entropy) the number of ways to accomplish oxygen diffusion rises very rapidly, in fact it rises logarithmically. If you think of the eventual end state of this thought experiment, that the oxygen gas will equalize itself across the entire room with 1000 molecules on each side of the divider, the  number of ways to accomplish that jumps to 2 x 10600 (that is the number 20 with 600 zeros after it).  There are a huge number of different pathways than can be taken to reach equilibrium of oxygen distribution within the room.

Across many physical processes, the world we live upon, over time, tends to move from rare conditions, for instance, all the molecules of oxygen on one side of the room, which can be accomplished only one way, to much more common conditions, i.e. the number of ways in which the oxygen can diffuse itself across the room. And we should all count ourselves as very lucky that the world works this way, or you could be walking around in your neighborhood and all of a sudden find yourself in an area lacking in oxygen. Don’t you just hate it when that happens? “Honey, why are you so blue?” “I was out jogging and ran into an area with no oxygen.”

In many respects the results above reflect the probability of one type of event, equilibrium of the oxygen distribution across the room (very likely to happen over time), against the probably of another event, that all of the oxygen would be on one side of the room (not impossible, but very unlikely). While the number of possibilities for the combinations of which molecules will end up on one side of the room or another is huge, the likelihood of any one molecule, over time, ending up on one side of the room or another is 50/50. The difference in difficulty in determining which combination of 1000 molecules will end up on one side of the room vs. the other, compared to predicting the likelihood of any one molecule ending up on one side or the other is not dissimilar to challenges organizations face in creating effective and efficient organizations as they try to maximize current performance while building future organizational potential.

Organizations may start out with somewhat “rare” conditions, a unique combination of people, or new technology, or a hot product, etc. but as they grow and bring in more and more people there will be a natural tendency for the organization to reflect the characteristics of the population external to the organization, as well as being faced with all of the same problems that commonly occur to other organizations. As an example, technologies and products can be copied over time, becoming a dispersed capability available to many organizations, or someone else can achieve the same result with another technology.

This effect will cause an organization to run the risk of becoming quite average or mediocre if they are not constantly injecting new energy into critical processes. As more and more individuals diffuse into the organization, the natural tendency will be for the internal conditions within the organization to reflect, by and large, the external environment from which they came. If they do not, it means that there is some form of systematic bias at work, which can work in the organizations favor or against the organization depending on the type of bias.

And as organizations need to pick and choose in which activities they should invest and spend resources, which will have the most impact on organizational performance, the natural tendency is that they will begin to look more and more like other large organizations, especially as they continue to grow in size. Since organizations tend to operate within similar environments they all tend to have very many similar issues and struggles. In cases like this benchmarking to look like other organizations, even those others most admired, is an attempt to strive for mediocrity.

Think for instance of a selection procedure that is designed to determine whom to hire. Say there is one opening within an organization and 100 people apply for the job. In order to determine which “one” to hire you put the candidates through a rigorous screen. The research on the screen indicates that higher scores on the screen tend to result in hiring people with better job performance. The operative word here is “tend”. Just as you cannot predict for certain which side of the room a particular molecule will end up upon, you cannot predict with absolute certainty which “one” out of the 100 applicants will be the most successful over the long term in the job, or even if the one selected will actually fail. The best that the research can do is to give you better odds at success. That improvement in odds provided by the selection procedure is when you are taking one person at a time, think of the added complexity if you were to try to determine the best person of the 100, to interact with the others already within the organization, and not just against the job. Which combination of 1000 potential employees will result in an optimum solution? The odds of successfully achieving that perfect combination are quite low, but luckily while there may only be one perfect combination there are thousands or perhaps millions of somewhat less than perfect, but very acceptable solutions to be had.

An organization’s ability to improve those odds leading to exceptional performance, depends on how well and how thoughtfully practices and procedures have been put into place that resist the natural tendency to simply become like everyone else, expending the necessary energy to create the rare conditions that makes them exceptional. Beating the odds requires the constant expenditure of organizational and individual energy.

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

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