Trust and control
In 2016, I was invited to present my Agile experience at an ASML conference in the Evoluon in Eindhoven. Although ASML had already experimented with Agile, I believe this marked the start of a journey that continues today. The theme of the conference – “Trust or control” – stuck in my head for years. It reads as a dilemma. Every manager would like to trust his/her staff and empower them to make their own decisions. On the other hand, as the managers will be held accountable, they’d like a modicum of control.
When preparing for my pilot license, we were trained to keep the plane very precisely at a certain altitude. There’s an instrument for altitude, but we quickly learned that it’s not very useful for this purpose – you’re always late, resulting in large fluctuations. It’s what I like to call a lagging indicator. A much more useful instrument to spot altitude fluctuations is vertical speed. The ultimate indicator for altitude changes, however, is the artificial horizon. This is what pilots use.
Many managers closely monitor lagging indicators like profit and unreliable business cases, but forget to focus on leading indicators. It leads to low predictability and management involvement in substantial fire-fighting that could have been avoided by early warning systems.
In his book “Swimming with sharks” (2015), Joris Luyendijk describes examples of companies that fire the weakest-performing 10 percent of their staff. This tends to lead to a culture of some people surviving by taking credit for good things and blaming others when things went wrong. Other people survive by refraining from taking risks. They create buffers, leading to lower productivity (as buffers always do). They prefer to hide and easily escalate decisions to higher management, lengthening the decision-making process. Management often gets job security from being involved in these escalations and the fire-fighting, as hands-on management is a sign of being in control.
I worked with a few companies with this toxic survival culture until a coach explained the phenomenon to me. Everybody has their own set of talents, and some people are good at surviving by blaming others. They can only excel in bigger companies that don’t do very well – and never will as long as this toxic culture lives on.
In an inquiry of over 180 teams, Google found that the number one dynamic for successful teams was psychological safety, ie trusting that we’ll be treated fairly when we take a risk. Researcher Jef van den Hout (“Dr. Flow”) found that one of the seven prerequisites for team flow is a fail-safe/feel-safe climate. People working in teams with flow trust their ability to handle the uncertainty of the future.
Feeling secure and feeling safe to take risks and make mistakes seems to be a leading indicator of productivity, and hence predictability. This boils down to trust. Managers better pay attention to indicators like psychological safety. When we say we’re in a people business, we mean that our people make the difference and the real value of the company stems from the people working there. It takes quite some investment to make people and teams perform, so we better handle our people with care.
Psychological safety studies also teach us that a high number of involuntary layoffs is an indicator of waste – we better invest in making people perform rather than firing them. I learned from a former CEO of Philips Lighting to not only evaluate performance but also values and attitude. When the latter is OK, it pays off to coach rather than force an involuntary leave. Another Philips manager taught me to build management teams with people who dare to disagree with you. We would now call that harnessing diversity to avoid tunnel vision.
In my perception, there’s a strong correlation between the level of involuntary attrition and the performance of the company. Some people may believe this makes sense as you have to fire people when they don’t perform, making attrition a consequence of subpar performance. I believe it’s the other way around. And this may well be one of the factors behind the current success of companies like ASML. By creating mutual trust, you enable empowerment, speed up decision-making and lower escalation levels. Managers no longer have to do the work of their people. It’s trust and control, not or.
