Human relationships as a part of the holistic approach in managing organizations

Management is about achieving results for the organization. The obvious meaning is that integrating the various organizational functions, like Sales, Operations, Finance and R&D, together to achieve the best performance is what the CEO has to accomplish.   This is the holistic approach: integrating the parts into a whole entity.

What is the role of HR in this need for integration?

In every part of the organization there are people who are truly required to achieve the global objectives. Every resource has a set of capabilities and a certain capacity that limits the amount of output in a period of time.  When it comes to human resources both capabilities and capacity are much more difficult to define and measure than the other types of resources, like machines, space and money.  But, the limitations of both human capabilities and capacities play a considerable part in the performance of the organization.

The characteristic of human resources is such that to properly utilize their capabilities the right motivation has to be active. For instance, a salesperson is meeting a new potential client.  Would she do everything she can to bring the client in?  Is this true also when she isn’t entitled to a special bonus for that?  Similar situations are a purchasing agent negotiating price and terms with a supplier and a foreman who gets a special request to expedite an order, which requires extra efforts.  Eventually all the above examples depend on the willingness of employees to help the company to prosper.

People might cause unintentional damage by failing to act in the right way. This could happen because of being untrained, or incapable, to do the job properly.  Another cause is flawed procedures and measurements that push people to do what harms the performance.  TQM, Lean, Six Sigma and TOC act in their different ways to fix that.

There are very few cases, but causing huge damage, where employees intentionally harm the performance of the organization.  This could take the form of refraining from doing what is required, like a strike, or even taking concrete actions that disrupt the performance of the organization.  It is definitely the responsibility of top management to prevent such high damaging cases, which raise emotions, like rage, preventing win-win solutions.

In the vast majority of the cases employees simply do their job as being told by their superiors.  When top management is doing a good job in integrating all the parts into synergetic performance than the results are positive, otherwise the employees cause damage, exactly because they follow instructions.

Can employees add high value that is far beyond just doing their job?

High level employees, like executives and highly professional employees, are expected to make huge efforts beyond their job. Question is: what is expected from the rest of the employees?

It is definitely possible that relatively lower level employees might know how to help the company to do better. In most cases the employees decide to keep quiet, believing the boss would not listen or appreciate their ideas.  Many employees feel that helping the company, beyond the formal description of the job, is a waste of their intellect.  This is a declaration of indifference:

“This is just my job, not my life. I’m not going to waste my intellect and special efforts for the organization that does not employ me for that purpose.”

So, the message for top management is that the employees might become a problem, either because they are not capable or because they are not motivated to do everything they can for the sake of the organization.

Henry Camp is the CEO of Shippers Supply Inc. and the owner of four other companies. Henry conducted a TOCICO webinar highlighting the 10 steps required to achieve the active collaboration of the employees for the company.  A special emphasis was on being ready to assist implementing a change in the way the company operates.

Henry Camp webinar is focused on what management should do to ensure that this indifference would never happen, preventing also the damage of intentional acts of frustration of the employees.

I recommend the reader to watch the recording of the webinar on the TOCICO site. A somewhat shorter alternative is watching his 30 minutes video on YouTube:  https://www.youtube.com/watch?v=4B0Azc6MNn0

I like to raise the issue of a CEO who is either new to the organization, or have not paid too much attention to the human relationships culture in the organization and now realizes that the time has come to diagnose the current state.

How much effort should management dedicate to diagnose problems with the motivation of their subordinates and solve them?

The objective is to find out whether the current performance of the organization is seriously harmed by existing level of distrust between employees and management. In the terminology of TOC the actual question is:

Is the internal human relationship the core problem of the organization?

The easy, but not always the best way, is inviting organizational behavior consultants to do the diagnostic. The result often is lack of focus, as the tendency is to come up with long list of what needs to be fixed.  The true damage to the Throughput is usually not defined.

There are two key organizational flows that determine the rate of achieving the goal. The first is the current flow-of-value to the customers.  The second is the flow of initiatives to improve the flow-of-value.  The concern from the impact of behavior on the current flow-of-value is creating blockages and by that harming the reputation of the organization.  The main concern for the initiatives is not trying hard enough to come up with great innovative ideas.

The chronic problem of the organizational culture is not with individual employees. Such problems are relatively easy to handle.  The problem is when most employees radiate indifference to achieve more of the goal.

Dealing with power groups within the organization is a situation that can easily become disastrous. Every airline has to manage its relationships with the pilots with extra care, while all the other groups are watching and might react to any change in the status quo.  In hospitals the surgeons have extra dominance and universities are run by full-time professors.  The balance between the power group, top management and the other groups is quite sensitive.  It is possible to get a win-win for all the groups, but it is not easy to maintain it for long time.

Can we apply rational cause-and-effect to diagnose existing or emerging behavioral problems and then find the effective win-win?

There is a common claim that people behave irrationally and thus analyzing it with rational logic is not effective. The argument is that we, human beings, often act based on impulses, stirred by emotions, leading to behavior that seems irrational because the actual results to the person are bad.  For instance, criminals behave in a way that eventually leads them to be in jail.  Question is whether the decision to make a crime is irrational from the perspective of the person committing the crime? Criminals could choose to satisfy their immediate desires in spite of possible negative consequences, as they judge being in jail less negative than most people.

Is human behavior often unpredictable?

If the behavior is the result of known causes, like the desire for dominance on other people, then the logical analysis should lead to expected behavior that is in line with reality.  Most of the time we predict the behavior of people we are communicating with well enough.  This is also true for managers predicting the response of their people and vice versa.

When negative behavior of employees can be predicted then it might appear on one side of the core conflict of the organization. For instance, when management distrust their employees they could suspect that the employees would not cooperate in introducing a change.  Such a conflict looks like that:

Suppose that indifference is causing many undesired effects that reduce the potential of the organization to achieve more of the goal. Does it mean the indifference is the core problem?  Or the indifference is a symptom caused by another effect that causes several other undesired effects?

Most of the time indifference is caused by the reluctance of management to trust their employees, or by poor performance of the organization that harms the morale and the trust of the employees in the management. Both causes have more negative ramifications on the organizations.  Having to control everything has a huge negative impact on management attention, and from that on the ability of the organization to grow.

This basic trust and sense of purpose should be carefully maintained by the management of the organization. When there is a change in the mutual trust between management and employees then new emerging undesired effects should signal that such a change is happening.  A drop in the delivery performance to customers could be such a signal.  Failing to meet commitments, reduced quality and increase in customer complaints should be carefully viewed and monitored.  When such a change in the mutual trust is validated, the next step is to understand what happened to this sensitive balance.   Understanding the causes for human behavior is very much needed at this stage.  When such signals are not observed, then the focus of management should be elsewhere – on what truly constrains the performance of the organization.