Improving Outcomes in Flattened Organizations: Structure, Motivations, and Implications for Internal Consultants

1. AIMC meeting Miami 22 March 2004 Stephen P. Kelner, Jr. Egon Zehnder International Improving Outcomes in Flattened Organizations:Structure, Motivations, and Implications for Internal Consultants

2. How Things Used to Be: Nice, neat, regular ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

3. Now…broader spans of control ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

4. CEO CFO Region1 CEO CIO CPO Region2 CEO Corp Fin. Region1 CFO Region2 CFO Corp IT Region1 CIO Region2 CIO Region1 CPO Corp HR Region2 CPO Or…more complex interactions ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

5. What’s going on here: belaboring the obvious • In the past, organizations relied on structure-based influence because they had simple structures • Smaller spans of control, closely supervised • Best team size ~ 6-8 max • “Legitimate Power” or positional power (French and Raven, 1968) could carry the day • Good leadership focused on clarity of direction • Now, organizations are flatter and more complex • Much broader spans of control – managing more people, with less supervision • Can’t spend time with everyone • More complex, diverse, independent, matrixed organizations • Can’t enforce clarity along dotted lines, only influence • Relies on more forms of power: Referent, Informational, Connectional, Expert… ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

6. Before we go further – a word on motivation • Motive: Nonconscious, intrinsic, emotional drivers • Spontaneous patterns of thought • What is fun or enjoyable or frustrating (rather than just what is logical or important or required) • The Three Social Motives (McClelland, et al.), which occupy 80-85% of daily thinking time across people • Achievement: “better” = innovation, improvement, efficiency • Affiliation: “friendliness” = belonging, intimacy, wanting to be liked • Influence/Power: “influence” = impact on others, influencing • These three are useful ways to categorize all work • Note that most people do not know their own underlying motives—at least not overall! • Past studies: motives predict where people wind up in organizations with surprising accuracy (67%+ over 8-12 years!) (McClelland & Burnham, 1968, Jacobs, 1992) ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

7. Motives and Management – the classic model (McClelland & Burnham, etc.) • Work through and with others – Influence!! • Work through others to get it done – Infl, (less Ach) • Work mostly through others to get it done – Infl, Ach • Do it yourself and get others to do it – Ach, Influence • Do the job right and by yourself - Achievement ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

8. Executives of Fortune 500 Company composed of multiple business units, flat & loosely managed Nonprofit (religious) healthcare CEOs -- highly collaborative with community, board, religious order… ACH AFF INF ACH AFF INF But what of modern organizations? • Influence still critical – perhaps more so without structure to help • Especially for executives, internal consultants • But what binds organizations together? • Loyalty, belonging to something larger, friendship, alliances • Affiliation! (Especially coupled with common vision.) ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

9. TRUSTING/POSITIVE Consoling, helping, benevolent view of authority, part of whole Action with assumed positive outcome ANXIOUS • Negative re: separation, discussing relationships, rejection, merging • Anticipation, block worry MISTRUSTFUL/CYNICAL • Interpersonal dishonesty, people presenting themselves falsely (hypocrisy), personal block to affiliation But there’s more than one type of affiliation…and some are destructive! ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

10. Here’s what you want throughout a flat or matrixed organization Trusting/Positive Affiliation • Thinking patterns • Consoling, helping: friendly, nurturant acts, being concerned about the happiness of another • Liking, positive affect around relationships • Seeing authority as benevolent: trusting authority or a transcendent force--trusting view of the universe • Being part of a greater whole • Actions • Taking action on others’ behalf without concern for return • Not worried about future of relationships, enjoying them now • Choosing or preferring to work collaboratively or with a team • Taking trusting action ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

11. What can go wrong • A breakdown of trust makes it harder for trust to develop. Some examples: • “People are our most important asset”—followed by layoffs • Merger of clashing cultures and assumptions • Breakdown of integrity at any level • Revealing private facts inappropriately • Cynical affiliation becomes self-reinforcing—no room for repeated failure! • Anxious affiliation requires lots of hand-holding ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

12. How do you get it? • Trust generates trust: “you get what you give.” • Apparent vulnerability as evidence of trust • Empowering (based on solid assessment of ability) • Honesty and openness • Fair compromise—giving up some to get some • Consistent treatment or management across the organization • Following consistent, visible principles, not identical! • The same story in all places • Integrity of approach: walk the talk • Respect differences but enforce common vision • It’s still good leadership--but as a partner, not just from a position of authority ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

13. EZI’s Collaboration Competency: What It Looks Like GENERAL DEFINITION People demonstrating this competency have a drive to work with peers, partners, and others, who are not in the line of command to positively impact business performance Forges innovative partnerships Builds partnerships Facilitates collaboration Actively demonstrates teamwork Engages with colleagues Actively supports colleagues Helps if asked Low levels: they participate as required. Moderate levels: they actively engage in collaborative behavior. High levels: they build enduring partnerships and teamwork, across organizations and geographies ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

14. Which do you like most? Anxious: “Trust--but look for the exits.” Mason Cooley Cynical: “Praise the day at nightfall…ice you’ve crossed, ale you’ve drunk.” Sayings of the High One (c.1000) Trusting/Positive: “Trust men, and they will be true to you; treat them greatly, and they will show themselves great.” Ralph Waldo Emerson ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

15. Some final thoughts Try sharing something about yourself Feel free to ask more Thanks for listening! Steve Kelner Egon Zehnder International 45 Milk Street, Boston, MA 02116 Steve.Kelner@ezi.net 617-535-3500 ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved

16. Selected References • Kelner, S. P., Jr. (1990). Interpersonal Motivation: Positive, Cynical, and Anxious. Doctoral dissertation, Boston University. • Kelner, S. P., Jr. (2000). Human motivation and organizational mobilization. Center for Quality of Management Journal, Vol. 9, #1 (Summer 2000), p. 25-43. • Kelner, S. P., Jr. (forthcoming) Motivation for Life. • McClelland, D. C. (1985). Human Motivation. Glenview, Illinois: Scott, Foresman and Company. • McClelland, D. C. & Burnham, D. H. (1976). Power is the great motivator. Harvard Business Review, March-April 1976, p.100-110; 159-166. • McClelland, D. C., Koestner, R., & Weinberger, J. (1989). How do self-attributed and implicit motives differ? Psychological Review, 96, #4, 690-702. ©2004 Stephen P. Kelner, Jr and Egon Zehnder International. All rights reserved