Friday, June 02, 2006

Age of Fear & Manipulation in Government & Industry

Dear President Bush,

Between our elected and corporate leaders, the most common tools seem to be fear and manipulation. While waiting for a doctor’s appointment, I read a March issue of Fortune magazine. The lead story highlighted the new CEO of JP Morgan Chase, Jamie Dimon. He bragged of his use of fear and intimidation to get people to behave “right”. The management maverick highlighted his use of performance incentives to induce similar behavior. For branch managers the top twenty percent get bonuses as high as $65,000 while the bottom 20% get zip.

Mr. Dimon says he wants the best systems and best people, yet his management strategies ensure otherwise. Apparently he is not aware of the heavy losses associated with fear, forced rankings and incentive pay. When employees are fearful, they enter a fight or flight state. Neither of these is productive for an organization doing complex work on behalf of its customers. In many cases employees withhold bad information for fear of blaming the messenger. They are also known to lie, to fabricate data that shows the company is on track toward achieving its benchmark measures.

Dr. Deming suggested if a leader wants an employee to do a good job, give them a good job to do! Incentives divert the employee from meeting customer needs to what they must do to get the incentive pay, to finish in the top 20%. Once again, lying and cheating are not uncommon. Workers giving their all within an incapable system will feel blamed should the outcome not be as expected.

During a time in which leadership practices should be reaching new heights, corporations and government are reaching new depths. Fear and manipulation carry heavy losses for the greater organization, society or whole. Both can be reduced or eliminated. Alfie Kohn recommends paying people as much as the organization can afford and then doing everything possible to keep their mind on their work and off pay. If you are looking for good books to read this summer I suggest you check out those two authors, Dr. W. Edwards Deming and Alfie Kohn. You just might learn something from the two old salts!

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