August 25, 2011

There has been no dearth of words like "fear," "scare," and "panic" in the headlines of lead stories inthe past two weeks, fueled by the manic swings of Wall Street and the overall malaise of the economy. Fear can be crippling, if not deadly, especially if the public fear creeps into the business atmosphere inside companies. Sad but true, the fear of loss and missed expectations can lead to instability and incredibly harmful business behavior.

I turned to Tom Rieger, the chief architect of Gallup's global efforts to remove fear in the workplace, and author of the uncannily well-timed new book Breaking the Fear Barrier.

Q: Of all things that might impact a business, why focus on something so intangible as fear?

A: A few years ago, I was faced with a mystery. I was trying to help some companies that were, in their words, “stuck.” They were doing all the right things but were still faced with high turnover, low customer loyalty and a variety of other problems—for no apparent reason.

So we dug in to see what was wrong. We looked at policies, procedures, performance management systems and organizational charts. We studied every level from the C-suite to the graveyard shift as well as every aspect of every job—recruiting, hiring, training, discipline, advancement, attrition—you name it. Pretty soon, we realized that these companies had nothing in common except that all of them had erected thick barriers or collections of bureaucracies, and each was created from fear. We realized that fear was eroding all these companies in very similar ways—so similar, in fact, that the pattern could be easily recognized if you only knew what to look for.

Q: But given the economic situation and the general nature of people in companies, aren't bureaucracies and barriers inevitable?

A: I think to a large extent, they are inevitable in any company that’s growing. As companies grow and divide up responsibilities, people feel endowed with control over certain departments, and that endowment leads to a desire to protect, which leads to the barriers. In fact, often the biggest threat to a company’s success isn’t necessarily its competition. A lot of times, it’s the fear that lives within its own walls. That fear causes people to believe that they need to create walls and barriers to protect themselves, even though those walls and barriers make it harder for others in the company to succeed.

Q: What causes that fear?

A: People are afraid of loss—of not getting a bonus, not meeting a goal, losing decision rights, losing something. Sometimes it affects a single person, but sometimes the fear is a departmental issue. For example, you may have an inventory control group that’s incentivized to make sure the warehouse is empty at the end of the month and a sales group that’s incentivized to make sure there’s always product in the warehouse to sell. One of the two will fail. And one of the two may be so scared to fail that it will create rules that make it easier for one group and harder for the other. Those rules may even make some sense, but in actuality, they’re a barrier.

Q: Who starts building these barriers? Everybody? Or just people with power?

A: It's typically someone who has power and is out to protect it, and there is definitely a sequence to the building of barriers. It starts with division of responsibilities and control. As a company becomes more complex, there are more demands on each individual department. That leads to a view of success that's defined not necessarily by organizational success, but only by what a department is asked to do. Departments begin to view their world as the piece and not the puzzle. That causes loss of connection to the overall outcome but promotes a connection to a small part of the process, and there is no regard for how decisions affect other departments. In the face of that, some departments or individuals tend to want to exert an extreme amount of control over what they are able to influence. Then, self-sufficiency becomes threatened, so people begin to seize control of others or decisions or resources to regain self-sufficiency. All of these things lead to waste, inefficiency, lost opportunities, and cost.

Q: Can you share an example?

A: We studied a financial institution that was a textbook example of this. They had struggled with tightening margins and increased competition, and all that fear led to disengagement, inefficiency, and—in the case of their customer service organization especially—very poor call resolution and customer satisfaction and loyalty. However, once these barriers were removed, we saw increases in engagement, increases in first-call resolution, and sharp increases in how customers felt about the bank.

Q: What is a leader's role in removing fear?

A: Leaders have to drive these improvements because doing so may require cross-functional authority. Beyond that, leaders need to create an environment where courageous behavior can thrive, where what’s best for the individual is aligned with what’s best for the overall organization.

Q: What does that environment look like?

A: An environment that is courageous has a few different characteristics. First, you need engaged employees. They create the energy required to drive the result that we’re hoping for. Second, you need to make sure that you’re rewarding the right things, that you’re not inadvertently setting up systems that are too process-focused. The right incentives encourage people to do what’s right for the broader organization, not necessarily just one individual department. And most of all, you have to work very hard to clearly define a mission that the entire organization can become aligned around. Your goals, your systems, your performance, your recognition all should tie back to the overall mission. The other side of the coin, however, is that you always have to watch out for what I call courage killers.

Q: What are courage killers?

A: Courage killers usually come from lower level managers and supervisors. For instance, managers can express that employees are empowered at their own risk, encouraging employees to take a risk and then punishing them if it doesn’t work out. Managers may reward subjective metrics or subservience over service; the yes-man will win over the person who made a better decision. Managers can be inconsistent, not standing behind their employees even though they may have approved their actions, or they can overreact to problems instead of treating them as learning opportunities.

Q: So say you’ve done all the hard work of rooting out barriers but resources are still limited. How do you prevent fear from creeping back in?

A: Fear will always be there, and you always have to work to align the organization around what’s most important. It helps to define a set of guiding principles based on overall success: financial success, a better workplace, better relationships with customers, the avoidance of risk or catastrophic failure, for example. Every resource decision should be made based on what creates the maximum return on those overall metrics of success.

Q: What does a company that has done all of this look like?

A: A company that has done all of these things, that has become, as much as it can, barrier free, is a much more dynamic place. People work cross-functionally, go out of their way to do the right things, and have absolute clarity about the ground rules and boundaries and absolute freedom within those boundaries. And then, of course, they’re often much more successful. We’ve seen quantum improvements in engagement when barriers have been addressed properly. Ultimately, barrier-free workplaces just feel different—I’ve seen it happen. You can feel the energy and engagement as soon as you walk through the door.

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Matthew E. May, Article, economy, leadership, work environment, managing, Gallup, Tim Riger, Wall Street

Join the conversation ( 1 )

• Paul Hughes 8 months ago

  

  This article doesn't express my experience at all. Courage killers? They come from the top, most definitely. If the guy who signs the checks supports you on your risk-taking, you take them; if he doesn't, you don't. Lower level managers are only expressing what they get from above them. It roll downhill, remember?