The Natural Case for Employee Engagement

Yesterday the Strategic Management Bureau asked, “Is the unending search for ‘the business case’ for employee engagement a futile exercise?” and cited an article on the topic. In my response to the question I suggested that the attempt to create a link between employee engagement and the bottom line was an indication of the bankruptcy of the current management “paradigm” that assumes that there is a single rationality involved in running a sustainable business. There are at least two – the logic of the things and the logic of people. Pioneering sociologist, Max Weber called them zweckrationale and wertrationale – instrumental or task-based logic and values-based logic. The efficacy of the former is based upon its ability to deliver results; the latter is intrinsically valuable (like saying “please” and “thank you”) and requires no justification.

In zweckrationale people are instruments, means-to-an-end; they are treated as objects, as things. In wertrationale, they are people – ends-in-themselves. Over the last fifty years, ever since the reform of the business schools, we have seen the ascent of zweckrationale over wertrationale. This was accompanied by the move from the stakeholder view of the corporation to the shareholder view and the reduction of the purposes of a firm to the single one of the maximization of shareholder value.

More fundamentally, this attempt to reduce everything to numbers is a failure to see that organizations are best viewed, not as structures of logic, but as ecological processes. As readers of this blog know, this perspective contends that enterprises are conceived in passion, born in communities of trust and practice, grow through the application of reason and mature in power. As successful ventures grow larger, they become modular (specialized) and stratified (hierarchical) for the very best of reasons – to embed a proven recipe for success. Initially these bureaucracies are productive and enabling. But over time they become frozen structures of dominance and coercive, crushing the initiative and creativity of their people. This sets the stage for crisis and destruction, but with the hope of renewal.

This is what the decades-long leadership movement, with its call for “quality of working life”, “empowerment, “engagement” etc. is all about – the restoration of the communities of trust and practice that evoke people’s passions that lead to initiative, creativity and innovation in the context of work.

The Ecological Perspective

The ecological perspective on the twin logics used to create a sustainable organization comes across most clearly when we look at the core of the ecological mental model in the heart of what I call the “sweet zone” of the ecocycle:


The heart of the ecocycle’s sweet zone, showing the twin logics crossing

The twin logics, strategic management (Weber’s zweckrationale) and creative leadership (wertrationale) cross in the middle of a field of tension between the organization’s ends (on the left) and its means (on the right). Strategic management is all about results and methods – it connects “what-we-want” with the “how-we-get-it”. Creative leadership, on the other hand, is about identity and purpose; it connects “who-we-are” with “why-we-are-here”. The two logics work at right angles to each other. If we get the two logics working together the organization will head to the “north” (or 12 o’clock) toward a sustainable future.  If we don’t get them working together, the organization will get pulled either toward the left or the right. An excessive focus on ends leads leftward to the failure trap (not shown in this diagram), where there is a lot of passion but no results. An excessive focus on means leads rightward toward the success trap (also not shown), where the current power structure rules.

Typically large successful firms focus obsessively on means, and wind up too far to the right. In an attempt to come left, they talk about empowerment, engagement and growing people but then reduce everything to a program with Key Success Factors (KSFs), Key Performance Indicators (KPIs) and scorecards measured by endless HR-administered surveys. This mechanical, programmatic approach ensures that the organization stays firmly on the right hand side, with people treated as a means to the firm’s ends, not as ends-in-themselves. Of course the employees themselves can detect this nonsense at fifty paces. They may not be able to articulate exactly why they feel uncomfortable; they just know that they are.

“But if you can’t measure it, you can’t manage it,” I hear critics respond. Exactly. Employee engagement is not a program to be managed, it is not a set of techniques; it is an integrative process that must be lead. It does not require the firm to do anything additional or new; it demands that it stops doing a whole lot of things and that it does everything else slightly differently. Inevitably such change threatens the current power structure of every organization. That’s why it is so difficult.

What is required is a process akin to the Lean Movement and the Toyota Production System (TPS), from which it took its inspiration. TPS is not a set of techniques but a complete philosophy that must be embraced at all levels of the organization if it is to be effective. It cannot be adopted piecemeal; it is all about changing systems and will inevitably clash with MBO targets that focus on individual performance. Lean may be an important component of any successful attempt to move to the left in the ecological sweet zone. Unless the firm’s existing value streams are mapped, connected to customer value and made to flow, it is unclear what the firm should stop doing.

The employee engagement movement, like its predecessors, can never succeed without questioning the foundations of current management thought. To succeed it requires a new philosophy of business that embraces both the logic of things and the logic of people and acknowledges that they are profoundly different. Without such a philosophy, wertrationale will always be playing an “away” game on zweckrationale’s ground, with zweckrationale’s ball and zweckrationale’s rules! And zweckrationale will win…

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