Trust Your Employees

What would you call a global, enormous, Fortune 500 company that 95 out of 100 of its employees strongly recommend it as a place to work? Sure, an exciting new startup, but an old-school 70-year old company? What if that company was IBM?

In a great article by a former IBM manager, he explains how they used to have:

  • Merciless manager reviews
  • Managers much younger than their employees who took severe criticism from those employees… which meant an employee could be long-serving, well-respect and well-compensated without having to “climb the ladder”
  • Regular employee happiness surveys.

The recommendation figure is almost unimaginable nowadays. Even the most exciting of companies do not have numbers that high… including IBM, which, according to the article, no longer conducts those surveys, but has numbers in the ~50% range for recommendation.

By contrast, I am participate in several groups wherein current and former employees of companies of which I am or have been a big customer vent their frustrations and anger at management for destroying their great companies.

What did IBM lose to make it slide?

The answer comes from a different conversation I had earlier this week with a senior manager – direct report to CxO – at a large technology company. He said that the top team had begun to recognize that they did not have a “trusting” culture, and was interested in suggestions as to how to improve it.

Both of these incidents remind me of a saying from Gordon Bethune, the man who led the Continental turnaround in the 1990s:

Employees want to be proud where they work.

Have you ever met an employee who wanted to be ashamed of where they work, to hide it at social or professional events? Sure, many are embarrassed by the public image of their company, but every employee wants to be able to state with pride, “I work at X!”

A CEO has 3 jobs, and only 3 jobs:

  1. Set out and communicate the strategy
  2. Hire great people to execute it
  3. Ensure enough cash in the bank to execute it

And then, of course, get out of the way. In truth, every senior and mid-level manager could be described in the same way: lay out the strategy, hire great people, give them the resources… and get out of the way.

The problems begin when executives begin to believe that only they have the knowledge, the drive, the dedication (or the compensation) to make the company succeed. At heart, they do not trust their employees. They fear they are not dedicated, or intelligent, or informed, or honest, or have any of the many qualities that are necessary for success.

The great irony, is that if you want to succeed as the leader, you need one quality more than any other: trust. Set out a worthwhile strategy, hire great people you trust, give them resources they need, and then get out of their way.

So how do you build trust in your organization? It is pretty simple in principle, and pretty hard to do in practice.

Determine Boundaries

  • Make it very clear exactly which decisions must come to you, and which should be delegated, and why.
  • The decisions that come to you should be very very few. Like good software, you know you are done when there are no more decisions you can delegate, not when there are no more you can take on.
  • Absolutely refuse to cross the boundary. If someone comes to you with a decision that should be delegated, absolutely refuse to make it… and insist the delegate make it.
  • Publicize the boundaries everywhere. Everyone in your organization must know that you have those boundaries, what they are, why they are where they are, and that you refuse to cross them.

Support Decision Makers

Once you have delegated, support your decision makers to the hilt. If your direct report manager had to decide on a hire or fire or equipment purchase, then whether it worked out or not, support them.

Great outcomes do not come from a perfect track record, but from a process of great decisions. Some lead to good outcomes, others fail. But if you want great outcomes:

  1. Make them make decisions
  2. Back the decisions, whatever the outcome, and never ever berate anyone publicly
  3. Publicly thank and reward them for taking the decision and risk
  4. Watch as they take more and more risks
  5. Sit back and watch some of those risks lead to home runs that far exceed the costs of the bad outcomes

I learned this important lesson from two sources. In my early years, I had the pleasure of working for a brilliant IT leader. He had three simple rules:

  • If you take no risks, leave.
  • If you take a risk and it fails, get rewarded. Seriously.
  • If you take a risk and it succeeds, get rewarded more.

The other source was venture capital. One of my first introductions to the VC industry taught me the 7-2-1 rule. For every ten investments, 7 would be “dogs” (money down the drain), 2 would “linger”, and 1 would be a “home run”. And that was just fine. The home runs made the whole risk worth it. (Whether or not this is a good model for the entrepreneur is an entirely different problem….)

The formula is pretty simple:

great product/service + trusted employees = success

What do you do if you don’t have the trust, or your product is floundering? Ask someone (like us) to help. After all, a great company is a terrible thing to waste.

About Avi Deitcher

Avi Deitcher is a technology business consultant who lives to dramatically improve fast-moving and fast-growing companies. He writes regularly on this blog, and can be reached via Facebook, Twitter and avi@atomicinc.com.
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