“It isn’t what we don’t know that gives us trouble, it’s what we know that ain’t so.” – Will Rogers
In his latest book, Under New Management, David Burkus challenges a number of conventional business practices. These practices include, but are not limited to: the “customer first” mentality, non-compete agreements, email, standard vacation policy, office design, annual performance appraisals, and even the need for managers.
Under New Management is well worth reading. Below, I zero in on three practices Burkus addresses.
Management Focus on Employees First
Vaneet Nayar, CEO of HCL Technologies (HCLT), jettisoned the “customer first” mindset and replaced it with “employees first, customers second.” Burkus describes HCLT’s practices in the book.
John Mackey of Whole Food Market has described this mindset as a virtuous circle. He said management’s job is to take care of employees and the employees’ job is to take care of customers. This leads to profits that take care of shareowners who in turn reward management with additional investment to expand their activities to serve customers.
I like this mindset because too often the “taking care of employees” link is left out. This is why two-thirds of employees in America today are not engaged at work.
Hire as Team
Burkus says the best leaders bring their whole team into the interview process, unlike the conventional approach in which the specific manager makes the hiring decision. He cites Whole Foods as an example. Each Whole Foods store has 8-10 teams grouped into functions, including produce, meat, and checkout. Potential new employees go through phone interviews, one-to-one interviews with store leaders, and panel interviews with recruiters, managers and select employees. Once associates come on board, the store leader places them on a team for a trial period after which a two-thirds team member vote is required to finalize team membership. This process applies in stores and in the home office.
The only company I have worked for that employed a team approach to hiring was Morgan Stanley. Based on my observations, it resulted in identifying new employees who best fit the culture so I’m a big fan of this approach, primarily because the more employees who interact with a potential new hire, the more input on whether or not the new hire shares the values.
Ditch Performance Reviews
Everyone knows that the annual performance review is problematic and yet many organizations still employ this practice. Burkus tells the story of Adobe Systems replacing its annual performance review with a more frequent (typically monthly or quarterly) informal “check-in” process that focuses on expectations, feedback, and growth and development. With this method, Burkus says Adobe reported a significant improvement in employee and manager morale.
This more frequent / less formal approach addresses my primary concerns with annual performance reviews. First, they create too much anxiety on the part of employees. With greater frequency, the performance check-in will become part of ongoing communications rather than a big event. The second problem I have is that if the only time an employee hears constructive feedback is during an annual review, there are going to be long periods during which an employee may be unaware he is performing sub-optimally. Frequent check-ins encourage dialogue.
To learn more about research and examples that challenge conventional management practices, pick up a copy of Under New Management and read it with your team.
Note: I received a review copy of this book in advance of publication.
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