Humanocracy, the book by Gary Hamel and Michele Zanini, presents the research and the practices that help build organizations that foster freedom and responsibility. Here’s part 3 on how to upgrade your organization and develop a positive culture. Let’s look at meritocracy and community.
Meritocracy means that power goes to individuals on the basis of talent, effort, and achievement, rather than wealth or rank. It’s a fair principle: may the best person for this job lead this team, make this decision, and so on. Pyramid-organizations look like meritocracies (the best are promoted to become the leaders) but that’s often not true.
Confident people have an advantage in competing for power and tend to rise in the hierarchy. Overconfident people are also seen as more competent than others. The leaders might be seen as fit for their top jobs, but they might lack essential competencies.
It’s not easy to judge your own abilities (Everyone thinks they’re better than average!). It’s even worse to judge someone else’s abilities. Research shows that our assessments often say more about us than about the other. And that we judge those in power differently.
We also appreciate those who are like us more. The answer to “who’s competent” often resembles the answer to “who makes me feel comfortable?” John Gardner’s research reports that 75% of executives witnessed favoritism and 83% reported that the promotion decisions were poor in their organizations.
Hence, many organizations have a mirror-tocracy instead of a meritocracy (where people are promoted according to their merits).
Hamel and Zanini describe the hierarchy as a multi-player game for promotion to scarce top positions which leads to hoarding information, window dressing, ducking tough decisions, deflecting blame, undermining rivals and praising the boss…
Rate your peers
How do organizations avoid these tendencies? At Google, people rate their peers online. More people know more – and their multiple perspectives are likely to produce a more objective outcome than a singe-person bias.
Bridgewater Associates hedgefund even uses a real-time app to rate colleagues throughout the day on a number of attributes. Everyone gets about 8 ratings per day, on average. You can see who rated you and see everyone’s ratings as well. Such an open, peer-based and real-time review sounds scary but works better than a once-a-year performance review by just one leader.
This direct feedback impacts the culture for sure – and it might work better in one organization than another…
Another way to improve meritocracy is to match someone’s compensation to their contribution. Google and WL Gore are organizations that pay based on contribution, not rank. At Gore, everyone gets a list of two employees to compare for a certain competemcy, and chooses one over the other. Who is better at serving customers to their satisfaction, Mark or Jane? Who is better at delivering results in time, Jane or Tom? Who is your go-to person in the team if you need help with X, Tom or Mark?
Gore’s system pushes people to think about how they can add more value. It helps employees feel that they report to their peers, not to a boss.
Depending on the topic, some individuals get a higher rank. This way, Gore makes leadership and power more fluid and dynamic.
Hamel and Zanini offer suggestions to stimulate meritocracy, even in traditional pyramid-organizations:
Ask your peers to rate you across some categories and your added value
Move to peer-reviewed performance ratings and make them transparent
Divorce compensation from rank
Redesign decision making to include more peers
Give teams the right to fire incompetent leaders
Rotate people across roles, challenge them, let them learn and reward them for this
Humanocracies cherish the relationships between people, as do positive cultures. There’s a strong link between well-being and social connection, but also to great performance.
Southwest Airlines is great at community. They want to “treat your people like family and lead with love” as their former CEO Kelleher stated. They are a community first and a business second.
It works well to build a community around a shared, inspiring purpose. The airline has a mission they care about: Give everyone the freedom to fly.
Other features of their community are open communication and transparent data, peer-to-peer accountability, mutual respect and a sense of family. People feel safe enough to be themselves. You also have to be tolerant of mistakes if people learn from them.
Last but not least, employees are trusted to be wise. They may waive policy and procedures if necessary – the frontline can do what it takes to serve the customer.
A great community pays off. Gallup research found that 2 out of 10 people have a best friend at work. If this was 6 out of 10, the average company would increase profits by 12%
Hamel and Zanini offer suggestions to stimulate community, even in traditional pyramid-organizations:
Create a shared, inspiring mission
Build trust and engage others
Give frontline people the autonomy to serve the customer best
Create team-based goals to increase mutual accountability
Build mutual respect, get to know each other better, appreciate what co-workers do Hire for compassion, do acts of kindness, follow the golden rule
Many of these suggestions are part of the curriculum of the Positive Culture Academy, with a focus on positive leadership and culture.
If you’re familiar with the Competing Values Framework of culture, meritocracy and community thrive in the entrepreneurial Create culture type and the people-oriented Collaborate culture type. The suggestions stimulate these culture types.
- Which of these suggestions appeals to you most?
- Do you focus on meritocracy or community first?
- What can you start tomorrow?
© Marcella Bremer, 2021. All rights reserved.
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