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29 Dec.'93
Russ Doane
CREATING A MARKET FOR TEAMWORK
ABSTRACT
I keep hearing that the Reward System is killing us. Mostly I've been
hearing this from people in the Field but recently I heard that re-use
objects are hard to get designed for reusability, and that maintenance
costs are not funded, with the implication that re-use won't happen.
For-the-good-of-the-company and for-the-good-of-the-customer work is
easy to see and to reward in small companies. In big companies like
ours it is neither. "Do the Right Thing" doesn't work when it means
sacrificing the next raise or the next promotion or your employment,
because what you've done cannot be evaluated positively. So we have
a corrupt company: one in which doing wrong gets rewarded.
I propose creating a currency by which customer-spirited and team-
spirited contributions can be rewarded by those who can best evaluate
the contribution.
THE PROBLEM
Deming opposed merit pay because he believed total contribution to be
impossible to judge except possibly over a period of many years.
Deming was referring to a problem that large companies have. When
Digital was small each person's contribution was fairly easy to see.
When George Gerald's committee figured out when the holidays were
going to be for the year, we all knew and appreciated that work. When
Dick Best made a brilliant "save" by debugging a customer's system we
all heard about it. When I went to the Solid State Circuit Conference
and published my trip report, the whole technical community could see
and value my contribution, all 30 of them. When Henry Crouse refused
a supplier's bid and told the supplier to get some business advice and
come back with a higher price so we could buy without driving the
supplier bankrupt, Henry bragged about it. Nobody had to feel they
would be victimized by doing the right thing for customers or
colleagues or suppliers.
Later, the company grew but then we "went public" and there was hope
that if someone did something important the stock price would rise.
Each of us who owned stock (just about all employees did of course)
could value contributions for-the-good-of-the-company because we would
each be rewarded. Sometimes promotions and project funding decisions
seemed unfair though. I was sufficiently offended to look around
outside Digital more than once when we were mid-size and the merit of
my total contribution seemed no longer visible.
Today, we are much larger still. Too large for most of us to feel
that our finger-in-a-dike could be rewarded by appreciation of our
personal stock. And there is a lot of risk during this "crunch" if
someone needs an excuse to pick the losers at musical-jobs. At the
moment I feel free to make contributions that are difficult to value,
in part because I could afford to lose my job if necessary in order to
do what I think is right. But before I was sure of funding all of my
kids' college educations, I walked carefully as many do today.
We are not alone in this predicament. Nearly every large organization
public and private is corrupt, as Digital is. In nearly every large
organization, doing what looks good wins and doing the right thing
makes the doer and her or his family personally victims.
HIERARARCHIC VS. MARKET SOLUTIONS
I am not so sure that Deming's answer (seniority raises and five-year
evaluations) is the only possible solution, though I like it. I also
like the idea of personal boards of directors proposed by Russell
Ackoff. But at Digital and in many organizations we have a tradition
of a free market for ideas that is stronger than our tradition of
discipline in regular employee evaluations. And markets usually work
faster and more efficiently than hierarchic processes.
Possibly both could be combined. But here I'll confine myself to
trying to hatch a free market solution that could have some promise.
CURRENCIES
The purpose of a currency is to free people from the awkwardness of
barter. In every big organization, clever people collect "chits" as
some call them: memories of loyal favors delivered, that could be
"called in" when the donor needs a favor done in turn. This is a
crude form of currency. It is more flexible than trying to barter
here and now (if you do this for me I will do that for you.) However
it suffers two ways from being based on memories of personal favors:
1 If one party leaves, the invested green-stamps leave
2 Personal loyalties tend to compete with organizational commitments.
The situation might be compared I think to mid 18th century America
with local banks making their own currencies. There was a lot of
potential for losses, not to mention abuses and chicanery.
What I'm looking for is a currency with these characteristics:
* The Company stands behind it, so local changes don't destroy value
* The market is policed well enough to inhibit fraud and theft
* Customers and the Company will benefit by the market's workings
* The currency is portable and fungible: it's easy to use.
WE HAVE ENABLING TECHNOLOGY
Digital already has an electronic network where attaboys circulate.
When I receive a good attaboy I forward it to my manager, a bit like
a bank deposit from myself to that one other person.
Attaboys are not fungible and their value is not calibrated. And
unless I kept copies (which I don't) they are no longer a Digital
asset if either of us leaves. But can we build something better on
this existing Enet base?
CURRENCY VALUE
Cigarettes were used for currency in WWII prison camps. The Gold
Standard is just as arbitrary as any other, if you think about it.
(Gold standards prevented irresponsible governments from rapidly
inflating their currency, though some would argue that good
governments have their hands sadly tied if they can't alter the money
supply.) My point here is only that there is no fundamental necessity
to "measure" anything to create and maintain a currency market.
That is, unless you want this currency to be fungible on foreign
markets. For example, if Digital's do-the-right-thing currency was to
be bought and sold for Real Money. Then it would be necessary to find
some way to tie our internal currency to external values. I guess
Auditors would want evidence that one unit of RightThing measurably
equals $1K saved or 1 day of effort saved or like that. Governments
would want to know too, so that all income could be properly taxed.
But if it is only fungible within the company, nobody outside cares
as long as we are being reasonably fair with each other, no different
from today's governmental concerns for fair pay and fair promotions.
MAKING A MARKET
I would propose that one RightThing (or however we denote it: we can
call it one Gzaz for all I care) be *nominally* equal to one day's
work at an average rate, I assume close to $100K/365. And I would
further propose that it be fungible for budget and headcount.
I would further propose that each Employee gets a weekly stipend of
1/10 RightThing per day worked, compensated at the Corporate level by
only budgeting top-down for 9/10 of all the money and headcount.
That is, 1/10 of all Center of Control budgets would arise from this
democratic locally-controlled source rather than top down.
I'm proposing that your Center of Control gets richer if RightThings
accumulate to your personal account. But only if you stay: if you
leave the Center of Control, your RightThings account goes with you.
BENEFITS
Here are some consequences I would see from this design of a market:
1 People who collect a lot of RightThings get more power to reward
others: not only others who do a Right Thing in their own judgment
but also rewardees' managers who get headcount and budget boosts.
Instant Enet transfers from one's personal account to someone
else's could be disruptive, but also could be very helpful.
2 Human capital would be more valued. If someone leaves Digital
who has or can get a lot of RightThings, the Center of Control
manager is going to feel some pain; and maybe others in the Center
must be downsized if the budget loss will be severe.
3 The RightThing owner would learn that large transfers with
no warning are disruptive--colleagues are going to want a
compensatory RightThing or two if their commitments are to be
impacted.
4 Side agreements would get made more explicitly than they
usually are today. When someone gets hired on, the manager and
the colleagues are going to want to know: how much are you
willing to involve us before you decide to go throwing your
RightThings around, thus disrupting our budget and headcount?
5 Trainers and coaches might get disproportionately paid in
RightThings. Training groups could survive on no budget at all.
Some popular coaches might be very cheap for a Center of Control
to employ because of their RightThing income.
6 I would hope that teamwork would be greatly facilitated, which
is the whole point of all this. When the person you assist can
pay you back instantly with a few RightThings by stroking a
keyboard I think "the metrics are killing us" would be a memory.
COSTS AND RISKS
Obviously nobody foresees all of what will happen in any market.
I expect we'd need a few regulations against practices that would
obviously hurt Digital's customers, the company, or any individual.
Loan sharking and possibly any loaning at all might be prohibited.
RightThing transfers larger than 100 person-day-equivalents might have
to wait one fiscal quarter after they are promised, to give colleages
and managers time to adjust. Administering such rules costs money.
I don't know how to guarantee that lost time arguing over who gets
credit for booking what will be reduced by more than the extra time
spent dickering over RightThings.
I hope that RightThings would make it much easier for engineers and
their managers to put in the extra effort to make objects re-usable
and to provide the maintenance services re-usability requires. But we
might find that the extra complexity of a RightThing market has no
beneficial effect or even an unanticipated perverse effect.
And the cost of creating and running the RightThing market would be up
front before we'd have proof of its benefits if any.
In view of such risks: how about a few critiques of this idea?
Russ
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| While the concept is laudable in some sense, it seems to have a fatal
flaw common to other "soft currency" systems. Who gets to create the
RightThing? Who polices this process?
It loooks to be another tool by which middle managers will be able to
exert additional pressure on their reports. Since many middle managers
are only interested in promoting themselves, they will award
RightThings to sycophants and toadies who suck up to them, rather than
to employees who actually have the greater good of the company or its
customers in mind.
I tend to view Digital's internal operation as being a microcosm of a
Soviet-style planned economy. We have a Gosplan which issues global
budgets and also indulges in piddling micromanagement, giving a VP a
certain budget but prohibiting his employees from spending fifty cents
on an MS-DOS license without SLT-member approval. We have "funny
money" transfer accounts, whereby internal transfers are often totally
absurd and thus even sane ones are ignored (see DIAL for one example);
we might as well denominate this in roubles. We have ministries
competing with each other for resources based on politics.
And in the old Soviet Union, the main currency of trade wasn't the
ruble or the dollar. It was blat. A rich person was one who
accumulated blat, for blat could be traded for things money couldn't
buy (and in that economy, not much was sold for money). Blat was
acquired by doing favors for the right people, knowing the right
people, or trading for it. Blat meant _influence_, the ability to get
people to do what y ou wanted to do. So when the old Soviet Union
fell, some old Communist blat was devalued, but new blat was created,
and it continues to be created.
That's reality, and it can't be prevented or quantified in a planned
command economy. RightThings will be issued by those with blat, and
blat will rule. Unless/until managers and employees are both empowered
and accountable, both of which are exceptions since they go against a
command structure which is self-perpetuating, blat will rule.
It must have been a nice place to work back in the sixties. It wasn't
bad in 1981. But we need a lot more housecleaning before anyone
believes that doing the RightThing won't get them fired.
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| What is the RIGHT THING anymore ?
HMMMMMM, a thoughtful concept...., How about checking out 2827 and
seeing if we can put some thoughts together ?
Now for the grilling :
Why use a currency system as a reward for TEAM effort ? As .2 noticed
yuk-yuks and yes people that contribute to the political system and not
the MONEY making machine drive us down. It's the organization working in
unity that matters. Teamwork in isolation bites. IT makes the few look
good to the detriment of the many.
Teamwork rewarded individually disrupts the entire concept behind the
term. If anything, if one person continually "wins" many others will
become disgruntled. No, the ORGANIZATION must continuously plan small
wins and provide the scenarios for this to happen. Out of this will
come larger wins and more dedicated effort from many.
To me POLITICS and PROFITS have inverse relationships. Too political
less profit - look at US industry today. Less political more
contribution, excitement and yes, more MONEY. For the good of all of
us.
Dave
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.6> Feel free to suggest your method to insure fair, uniform
.6> evaluations of employee and group performances.
Responsible, accountable management.
In fact, responsible, accountable management is the correct answer to
just about every stupid problem that has resulted in every stupid
micromanagement directive that I've seen in the past six years.
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| >.6 I guess my comment stems from seeing people get raises and
>.6 promotions based more upon what group they were in and who they
>.6 knew rather than the merit of the work done.
>.6 Feel free to suggest your method to insure fair, uniform
>.6 evaluations of employee and group performances.
INMHO
Taken in context this is impossible to do. For most jobs there is now way
to make a persons performance *completely* objective. There will always be
some part that is subjective. The subjective part will always be
influenced by factors that cannot be completely controlled from one person
to the next. There are many studies that show how even the most
responsible, honest, moral, accountable etc. managers form their subjective
opinions from subconscious feelings. You can train people all you want to
try and recognize these but you can never eliminate them or make them
consistent from one person to another.
Additionally any objective system will always have ways to manuplate it so
that one persons performance looks better than another.
The only things that can be done is to develop the best systems you can in
the context of your buisness and continue to evolve them as your buisness
changes.
Jilly
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