Personal Value, Company Worth

Despite the buzzing about organizational flatness, it is still customary to think hierarchically about the relative importance of individuals in the corporate workforce. This is continuously fortified by the dual notions of "promotions" and "tiers" that characterize most organization charts.

The attendant mythology is that if people are higher up the chart, then they are more important. More factually, there's little debate that more organizational power resides at higher altitudes -- but what must not be lost on everyone, meritocracy notwithstanding, is that even higher power is not the same as higher performance.

Org charts are just a sketch, with limited ability to explain three key issues.

1. How does the individual decide what kind of contribution to make? Does he want to be influential or just billable? Particularly critical, or broadly resourceful? What does it take, and is it possible in his workplace?

2. Conversely, when a particular company initiative or problem rolls around, what kind of value is most needed from the individual, and therefore what individual has the appropriate profile to meet the need?

3. Finally, is the company really cultivating the potential for getting the contributions that it most needs -- or is it just coasting on organizational conventions?

From the standpoint of performance, not only can higher ranking individuals be objectively evaluated in the same way that lower ranking ones are, but every individual actually thinks in the same terms to decide what kind of value he or she is really going to bring to the organization's performance. For everyone, there are the same two steps: they make decisions about modeling themselves, and they align the personal model with the circumstances. The effects are not uniform -- not for one person over time, nor for different people in the same moment. But what actually gets done by the organization is pretty much the consequence of all these individual decisions pitted or adapted against the day's environment.

To see how the self-model fits in at work, first walk through the self-modeling picture:

It's fair to see these terms as multiple "ambitions" occurring simultaneously but with varying degrees of strength; thus at any time the individual has a "profile", which may fluctuate from one time to the next.

Some individuals fluctuate more than others. But more to the point, there are surrounding factors that encourage or inhibit the person's profile, and that is how the rest of the picture comes in.

From the management viewpoint, the objective notion of the individual's value is simple, and twofold, in summary:

When evaluation time rolls around, the question is largely one of whether the individual has committed to these two conversions as much as the company wanted him to. (In our research, we've noted that most observers initially believe the terms provided here are mis-ordered, and that the conversions should be "skills into quality" and "time into revenue". But, through most simple ROI analyses for intellectual capital and capacity management -- mandatory stuff for an enterprise -- that belief is quickly shown to be misguided.)

So, to understand why any success was possible or achieved in the person's alignment with the company's wish, it is necessary to see how the person's self-modeling fits into the company's model.

As arranged below, the remainder of the terms from our first illustration are indicators of that company model. They bring up the points at which the company makes things more or less hospitable through making investments that resolve key resources and constraints.

Roughly speaking, that final illustration compares "what kind of workplace" is available (worker in context) with "what kind of company" is there (work in context). Not coincidentally, these are the two key perspectives that the worker intuitively brings to the situation, greatly affecting his motivation (at least) or ambition (at most).

Back in the initial illustration above, the interdependencies involved in that comparison of workplace and company are laid out along the main oval, where they can be individually inspected.

Companies often make defacto decisions regarding those interdependencies that seem like no-brainers but may really be value-inhibiting. For example, assignments are an ordinary feature of the organization's workday. But assignments link skills to time and literally position the worker in the workflows. Thus, the potential of the business process is critically afffected; meanwhile, the logic of the process design is either a smart reason to invoke the worker or a not-so-smart reason. Bad processes can easily mis-position (i.e., waste) a worker, just as a bad worker can make a process ineffective. Management needs them both to be "good".

Likewise, it isn't hard to understand that overworking the person (in the "billable" link of time and revenue) lowers morale, or that training (education) would beneficially link skills and the quality wanted from the use of time.

Similarly, other "ordinary" aspects of the company will predictably map to the dynamics underlying value-capture. Depending on the point-of-view, these aspects may be recognized through other names or circumstances. For example, in our illustration's set of work-in-context constraints:
- Policy = "governance"
- Expertise = "intellectual property"
- Process = "organization" (dynamic, not static)
- Capacity = "goodwill" (of the stakeholders)

This helps us envision what impacts are really being obtained from things we know we're already thinking about or doing. But as arranged in the original oval, the most interesting part of the dynamics shown may be their bilateral nature. For example, just as education should be derived from investing in expertise, the picture asserts that strategy execution should be cultivated from policy (governance) -- certainly not only the reverse.

It is easy to recognize that the corporate valuation relies on those very issues of policy, capacity, etc. But now it is also easy to see how they are not just "performance results" but instead actually success factors -- due to the need for the company to invest in them as constraints to be managed around workers.

By tracking decisions and actions about the key factors illustrated above, we get answers to performance questions that may not have been apparent before.

Posted by Malcolm Ryder at 7:28 AM | Comments (1) | TrackBack