Friday links, December 3

Michele Zanini

Dec 3, 2021 • 4 min read

Domineering leaders reinforce domineering behaviors across the organization. This is hardly surprising. Advancement in organizations is almost invariably a product of zero-sum “promotion tournaments.” In such a system, domineering, cutthroat behaviors are the norm, not the exception. Unless we make structural changes to how leaders are selected (by their peers/colleagues, not their boss), and to whom they are accountable (to the team, customer, and other stakeholders), no amount of exhortation about enlightened behaviors will make a difference.

When leaders are aggressive and combative, people stop helping each other.

8 studies, 147k people: dominant leadership teaches people that success is a zero-sum game, motivating taking rather than giving.

Cutthroat competition at the top undermines collaboration across levels. pic.twitter.com/fu0KuLALxB
— Adam Grant (@AdamMGrant) November 26, 2021

2. Blow up the IT department! The piece focuses on IT, but the broader argument applies to a lot of other staff functions, like HR and Legal. Much better to distribute functional competencies across the firm than to house them in a central bureaucracy that ends up acting like an internal version of your cable or utility company.

3. AI is making recruiting even more miserable. This very good piece reminded me of the mediocre automation technologies (like self-checkout kiosks) described by Daron Acemoglu. If you view people as a cost to be minimized (as most organizations ), then you'll look for ways to save on recruitment expenses and be drawn to the latest "digital snake oil."

4. CEOs have central bankers to thank for their balooning stock prices. How many corporate boards will adjust (i.e., lower) executive pay in light of massive exogenous factors such as lax monetary policy? Likely zero. But a number of these boards happily reset C-suite comp plans to make execs whole for 2020, citing the pandemic. "Heads I win, tails you lose."

Wild. Bank of America estimates that corporate earnings used to explain half of equity market returns up to the financial crisis, but since then they explain only 21%.

Meanwhile, changes to the Fed's balance sheet explain 52% of market returns since 2010, it estimates. pic.twitter.com/S6CuG59NFa
— Robin Wigglesworth (@RobinWigg) November 30, 2021

5. How GE Appliances (GEA) rolled back bureaucracy and beat the competition. GEA has thrived since being acquired by 2016 by Haier, a Chinese Appliance maker. They did so by taking the principles of Haier's radical management model (e.g., zero distance to customers & distributed entrepreneurship), and translating it into set of practices fit for the local context. These include (a) disaggregating the org into "micro enterprises" with real P&Ls, (b) making central functions accountable to customer-facing units, and (c) getting rid of top-down, inflexible budgets. As GEA CEO Kevin Nolan mentioned, these have released an amazing amount of energy that had previously been suppressed.

6. Managerial value added? The authors ran a research study involving 14 teams comprising 283 employees in four Fortune 500 companies. "When managers were asked about their teams’ work, on average they either did not know or could not remember 60% of the work their teams do. In one extreme instance, a manager in our study could describe only 4% of their team’s work."

To address this gap, the piece recommends using algorithms/AI to help managers ramp up employee surveillance. The idea of giving teams the information, skills, and incentives to operate autonomously isn't even considered. That's how steeped we are in the managerial paradigm.