Mark McDonald

Deep within every organization there is a struggle between what people are supposed to do and how things get done.  Particularly in an environment of cost control, cash preservation and risk aversion, managers implement new policies, guidelines and processes that increase their degree of control.  These are TECHNICAL systems that see to exert control by the rule of law.  More often than not technical systems tell people what they cannot do, or who they need to get permission from to conduct business as usual. 

SOCIAL systems compete with these technical controls.  Social systems are the network of interpersonal relationships, friendships, allegiances that define how people work with each other.  Social systems form the basis of the company culture; hold the values that define what is appropriate and what is taboo.  Social systems reflect the way you get things done, how you work in the white space between the organizations on the org chart, the sins you can make and get forgiveness latter.

So what, every enterprise has both, got that…  Well the difference is important because social systems are more powerful than technical systems. 

However, times of stress executives and managers put significant effort behind erecting new technical constraints.  They value technical systems because they are easy to create.  Technical systems give the false impression of action and leadership.  Technical systems foster the belief that the problem is solved.  This is false comfort as at their core technical systems assume that you cannot trust people to do the right thing. 

Concentrating on technical systems ensure that this will be true, particularly when managers ignore the social systems.

Leaders recognize that behavior is governed by the culture and social systems.  They harness those systems by giving it information about what is going on, why certain values need to change and how each individual person (not policy) can make a contribution.  These actions go by terms such as rallying the troops, or change leadership, regardless of the name the focus is clear – leaders engage people, managers erect processes.

DuPont’s experience, retold by Ram Charan in his new book Leadership in an era of economic uncertainty, provides an example.  Charan retells how Dow’s CEO – Chad Halloway began seeing signs of coming economic weakness, how he called an emergency leadership meeting to evaluate and formulate a response, and most importantly how he communicated it to all the employees—how he engaged the social system.  While there were the traditional company-wide communications, Charan points out that:

“Within 10 days of the formulation of the plan to deal with the crises, every employee in DuPont had had a face-to-face meeting with a manger who explained what the company needed to do.  Every employee was asked to identify three things that he or she could do immediately to help conserve cash or reduce costs.”

That is a blueprint for engaging the social systems!

A long time ago when I was a commercial banker a customer told me something very important, “people write checks.”  What I took away from that statement was that people not processes or applications, must act before things happen and they must act differently if things are going to change.

Executives need to recognize this, particularly executives who manage largely technical systems – the CFO/finance and CIO/IT top the list.  

Executives and managers in these disciplines concentrate on rules, policies, and controls based on an underlying belief that employees would not understand what is going on, they cannot see what is happening, they need to do this because that is the way we can achieve our goals.  This is a paternalistic view that seeks to puts down your employees, tells them that they cannot handle the truth, so do what we tell you. 

Nobody likes to be told what to do without a reason why.  So, it sounds hokey but remember what Princess Leia said to Governor Tarkin before they destroyed the planet Alderan in Star Wars, “The more you tighten your grip, Tarkin, the more star systems will slip through your fingers.”  The same is with your company.  The more you squeeze the technical systems, the tougher it is to get results. 

• Recognize the social systems, the values that drive your organization.
• Rather than seeking to install controls, start first with informing the social systems and see what happens.  
• Talk with your people, engaging their ideas, imagination and values system in how you move forward.
• Treat you people as intelligent and trust them to understand the context, what has changed, and what will be required
• Trust your people to do the right thing, and drive change through social systems as well as the technical. 

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Category: Leadership Strategy     Tags: Leadership

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