Democratic Business: August 2012

Tuesday, August 28, 2012

MIT Research Shows that Democratic Teams Perform Better

"Research shows that managers of teams with high levels of interest, engagement, and trust become more integrated into the team, and will operate more democratically. Not surprisingly, these sorts of more egalitarian teams also perform better.

The take-home message for managers is that if you want to make wise decisions, then be sure to spend time reading your organization's network intelligence. Create an open environment through the face-to-face promotion of trust and empathy so that it becomes easy to read the signaling. Spend time reading your group's signaling around each issue, taking care to adjust for the problems of idiots and gossip. By utilizing your group's inherent network intelligence, you can reliably make better decisions than you could on your own."

"Since the classic studies of Alexander Bavelas at MIT nearly sixty years ago, we have known that teams with a centrally coordinated structure-the classic "org chart" structure are good for fixed, well-defined tasks, but not for complex tasks requiring flexibility. Conversely, teams with richer interconnections are good for tasks requiring flexibility."

"A first step toward incorporating the network intelligence perspective would be to replace the static org chart with the idea of a network organization that varies over time, changing to suit the information-processing requirements of the task."

Conclusion: 21st-century management will continue to democratize. As computing and robotics take on the roll of completing more and more fixed, well-defined tasks, the economy will offer more complex tasks to management and workers. Those companies that optimize the "intelligence" of their internal networks will be, as the research shows, up to 5 times* more accurate in their business decision making, and thus, will out-compete those companies that do not democratize.

*Alex Pentland. Honest Signals: How They Shape Our World (Kindle Locations 652-653). Kindle Edition.

Quotes from...
[Alex Pentland. Honest Signals: How They Shape Our World (Kindle Locations 671-674, 728-729, 790, 859-860).]

How Will You Measure Your Life?

I recently read this article by Clayton Christiansen out of Harvard entitled, “How will you measure your life?” It is what he tells his students on the final day of his class.

One of the items that he mentions sticks out to me. It reads as follows:

“One of the theories, . . . . . how to be sure we find happiness in our careers—is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. I tell the students about a vision of sorts I had while I was running the company I founded before becoming an academic. In my mind’s eye I saw one of my managers leave for work one morning with a relatively strong level of self-esteem. Then I pictured her driving home to her family 10 hours later, feeling unappreciated, frustrated, underutilized, and demeaned. I imagined how profoundly her lowered self-esteem affected the way she interacted with her children. The vision in my mind then fast-forwarded to another day, when she drove home with greater self-esteem—feeling that she had learned a lot, been recognized for achieving valuable things, and played a significant role in the success of some important initiatives. I then imagined how positively that affected her as a spouse and a parent. My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more [people think] that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people."

I’m sure you can see why it sticks out.