Here are a few books I’ve read recently that were insightful on organizational culture.
Our Least Important Asset by Peter Cappelli
This thought provoking book creates a compelling argument about how financial accounting is negatively affecting the quality of jobs. (Unfortunately, I do think it would have gotten more press if it hadn’t been published by an academic press.) Cappelli, a professor of management at Wharton, starts the book with an overarching question: Why have jobs gotten so much worse?”
Cappelli argues “these issues are not a result of companies trying to be cost effective. They stem from the logic of financial accounting--the arbiter for determining whether a company is maximizing shareholder value--and its fundamental flaws in dealing with human capital. Financial accounting views employee costs as fixed costs that cannot be reduced and fails to account for the costs of bad employees and poor management. The simple goal of today's executives is to drive down employment costs, even if it raises costs elsewhere.”
Here are a few of my favorite passages. The author shares what happens when we focus too much on one unit of cost (staff) rather than all costs:
“Optimization can be extremely useful, of course, and it is an important concept in improving productivity. A reasonable observer might ask, isn’t that what business is supposed to do, to employ as few people as possible and pay them as little as we can? The answer, of course, is no. What we want to optimize is value per unit of cost. When we optimize by minimizing costs, especially if it is on only one aspect of cost, we are likely raising costs elsewhere and being very inefficient.”
He gives an example of how cutting staff can ultimately COST stores:
“One of the best examples of the suboptimization approach of squeezing visible costs comes from a careful study of productivity and profits in the retail industry done by colleagues at Wharton. They found that stores on average were running staffing so lean that it hurt sales, especially because it meant that there were not enough workers who were keeping track of inventory at “the last mile,” getting stock from the back rooms onto the shelves. If items are not on shelves they cannot be bought, and customers are likely to go elsewhere not only to find that missing item but also whatever else is on their shopping list.”
Because of the way financial accounting works, having a workforce that you have developed is not considered an asset:
“Consider, for example, having a trained and skilled workforce, which a typical observer would see as being a considerable asset, perhaps even a requirement, for success. It is not an asset for the purposes of financial accounting, though….There are no measures in standard accounting to tell us anything about the value of employees because companies do not literally own employees. Good employees often work for their employers far longer than the working life of any capital equipment. A majority of older employees, for example, have been with their employer at least ten years. Yet they have no value on company balance sheets, nor is there information of any kind about them. This is the case even if employees are under contract to remain with their employer. With a capital asset such as new equipment, financial accounting allows us to treat it as follows. First, we can use it to offset liabilities that we may be holding because assets have current value to us. Second, we can depreciate the value of that asset over its useful life so that it can be paid off slowly as it is used. For example, if we buy an expensive machine that we expect to last five years, we can allocate the costs across those five years, basically paying it off as we earn money from it.”
This makes it difficult for companies to show how they are investing in employees, or for investors to see when companies are not investing in employees:
“There is no line item for training in financial accounting. It falls under general and administrative expenses along with items like office equipment. Are you spending a lot on training employees or on coffee? It looks the same to accounting. An inquiring investor will not know and cannot find out without digging into internal accounting, which they do not see.”
Hidden Potential by Adam Grant
Adam Grant’s latest book is, once again, an extremely readable, practical, and generous book. Here are some passages I found helpful related to learning and development.
First, he debunks the age old myth about learning styles, and instead encourages us to embrace learning in modes that make us uncomfortable:
“Today, learning styles are a foundational element of teacher training and student experience. Around the world, 89 percent of teachers believe in matching their instruction to students’ learning styles. Many students have told me they prefer podcasts to books because they’re auditory learners. Did you decide to read this book with your eyes because you identify as a verbal or visual learner? There’s just one small problem with learning styles. They’re a myth. When a team of experts conducted a comprehensive review of several decades of research on learning styles, they found an alarming lack of support for the theory. In controlled experiments with specific lessons and longitudinal studies over the course of a semester, students and adults didn’t do any better on tests when their teachers or study habits aligned with their abilities or their preferences. “There is no adequate evidence base to justify incorporating learning styles assessments into general educational practice,” the researchers conclude. “The contrast between the enormous popularity of the learning-styles approach within education and the lack of credible evidence for its utility is . . . striking and disturbing.”
“The way you like to learn is what makes you comfortable, but it isn’t necessarily how you learn best. Sometimes you even learn better in the mode that makes you the most uncomfortable, because you have to work harder at it. This is the first form of courage: being brave enough to embrace discomfort and throw your learning style out the window.”
Grant also shares a helpful way of thinking about procrastination:
“Many people associate procrastination with laziness. But psychologists find that procrastination is not a time management problem—it’s an emotion management problem. When you procrastinate, you’re not avoiding effort. You’re avoiding the unpleasant feelings that the activity stirs up. Sooner or later, though, you realize that you’re also avoiding getting where you want to go.”
The 6 Types of Working Genius by Patrick Lencioni
I will read anything Patrick Lencioni writes, and his newest book is a great tool for teams. The “working genius” model gives teams a “simple and practical framework for tapping into one another’s natural gifts, which increases productivity and reduces unnecessary judgment.” Here are the six types:
“The Genius of Wonder involves the ability to ponder and speculate and question the state of things, asking the questions that provoke answers and action. People with this genius are naturally inclined to do these things. They find it easy to lose themselves in observing the world around them and wondering whether things shouldn’t be different or whether there is untapped potential that should be tapped.
The Genius of Invention is all about coming up with new ideas and solutions. People with this genius are drawn toward origination, creativity, and ingenuity in the truest sense of those words, even with little direction and context. Though every type is a genius, these are the people who are most often referred to as “geniuses” because many of their ideas seem to come out of thin air.
The Genius of Discernment is related to instinct, intuition, and uncanny judgment. People with this genius have a natural ability to assess an idea or situation, even without a lot of data or expertise. Using pattern recognition and gut feel, they are able to provide valuable advice and feedback.
The Genius of Galvanizing is about rallying, motivating, and provoking people to take action around an idea or an initiative. People with this genius are naturally inclined to inspire and enlist others to get involved in an endeavor. They don’t mind persuading people.
The Genius of Enablement involves providing people with support and assistance in the way that it is needed. People with this genius are adept at responding to the needs of others without conditions or restrictions. They are naturally inclined to help others accomplish their goals and often can anticipate what people might need before they even ask.
The Genius of Tenacity is about the satisfaction of pushing things across the finish line to completion. People with this genius are not only capable of, but naturally inclined to, finish projects and ensure that they are completed according to specification. They gain energy by pushing through obstacles and seeing impact.”
Any successful team needs all six types of genius. Here’s what happens when you lack each one:
“Lack of Wonder can lead to a team failing to take time to step back and ponder what is going on around them. Cultural issues, market opportunities, and looming problems might get overlooked in the pursuit of more pressing issues.
Lack of Invention on a team presents obvious problems. In many cases, teams start to feel a bit crazy because they know their old ways of doing things aren’t working, but they find themselves stuck trying the same approaches again and again to no avail.
Lack of Discernment is a big problem on teams, but it’s often hard to notice. That’s because Discernment isn’t easy to observe or identify, or, for that matter, to prove. But that doesn’t make it any less real. When a team lacks this genius, it finds itself over-relying on data and models to make decisions that are best made using simple judgment. They often find themselves puzzled as they look back on bad decisions and wonder how they could have whiffed so badly.
Lack of Galvanizing on a team is relatively easy to identify as it is one of the more observable geniuses. When no one is rallying the troops or provoking action, even great ideas don’t come to fruition, and the team’s potential remains untapped. In these situations, you’ll hear people say, “We have so many great ideas, but no one around here seems excited by them.”
Lack of Enablement on a team is an obvious problem, but it can get overlooked because people too often fail to see Enablement as a genius at all. But when a team lacks it, there is a sense of frustration that no one is pitching in to help, and that no one is adequately responding to the pleas of the galvanizer. Enablement can be seen as the glue on a team, brought about by people who get joy and energy from answering the call to help.
Lack of Tenacity on a team is another obvious problem because programs and projects and things in general don’t get finished without it. Many start-ups are filled with people with the Geniuses of Wonder, Invention, Discernment, and Galvanizing, but without someone with the Genius of Tenacity, no one jumps over hurdles and pushes through obstacles during the critical later stages of work. Every successful team, at every level, needs people who simply enjoy seeing things completed.”
What I like about this framework, is that in addition to the typologies, the framework shares how the typologies tend to fall within the phases of a work project (ideation, activation, and implementation):
“The first stage of work, Ideation, is comprised of both Wonder and Invention. This is the part of work associated with identifying needs and proposing solutions. Innovation is most often connected with this stage. Even before Invention can take place, someone must ask the big question or identify a need. This is the first critical step in any kind of work, and provides the context for Invention.
The second stage of work, Activation, is comprised of Discernment and Galvanizing. This part of work is about evaluating the merits of the ideas or solutions proposed during Ideation, and then rallying people around the ideas or solutions that are worthy of action. Most organizations aren’t even aware that this stage exists (which I’ll address below), which leaves them to jump from the first stage, Ideation, to the third and final one . . .
The third and final stage of work, Implementation, is comprised of Enablement and Tenacity, and is all about getting things done. Whether it is answering the call to action or pushing that action through to the final stages of completion, these genius types are the ones who ensure that great ideas, the ones that have been discerned and galvanized, actually come to fruition.”