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|In: Business Ethics|Last Updated:

I never read Stephen Covey’s Seven Habits of Highly Effective People (I bought the discounted version: Four Habits of Semi-Effective People). People I respect have good things to say about Covey. While I can no more remember all seven habits than all seven dwarves, all fourteen (habits and dwarves) seemed both useful and unthreatening when I first encountered them.

Covey has another book, Principle Centered Leadership. I don’t go in much for this kind of book, because its central thesis – that adherence to ethical principles is a prerequisite to leadership – seems more the stuff of pamphlets than of treatises. Still, I have no argument with Covey, who promotes old-fashioned virtues in eloquent fashion. Virtues are Good Things (to use the technical term).

I do, however, take issue with the people who heard about Covey and, harking back to Jordy LaForge, thought, “Being ethical can advance my career? You know, it’s crazy enough, it just might work!”

Here’s an opinion: It’s not ethics until it hurts. If you’re not taking a personal risk, not sticking your neck out, then you’re not sticking to your principles. You’re just enjoying a string of good luck.

The sorriest facet of this whole phenomenon is how it turned ethics and principles into management fads. Empowerment, which certainly has an ethical dimension, became a fad as well. The experts told us all to empower employees because of how much more profitable it would make our businesses. Regrettably, accounting systems have no way to determine whether empowerment creates profitability, so the fad has started to wane.

Here’s a different perspective: you have no choice but to empower your employees. They already have the power to wreck your organization, and there’s nothing you can do to stop them.

Employees can respond to requests for help with indifference, inflexibly quote policy in response to service problems, produce the minimum defined in your performance standards, and live down to your carefully crafted job descriptions. So long as they do their jobs as you’ve defined them your employees are safe, until the whole ship of your organization sinks to the bottom.

None of the tools available to managers can stop this kind of empowerment – not procedure manuals, job descriptions, performance reviews, or disciplinary processes. The more you try to keep employees from messing up, the more you make their failure inevitable, until the whole situation becomes completely ridiculous.

Don’t believe me? Look at the Federal Information Processing Standards (FIPS) and Federal Acquisition Requirement Specifications (FARS). These two sets of documents detail how the government must buy information technology. FIPS and FARS try to make the process idiot-proof. Great theory. The paradox? FIPS and FARS are so detailed and elaborate that to learn them you have to be smart enough to not need them in the first place.

Empowerment is a good-news-bad-news proposition. The bad news: You have no choice about empowering your employees. You can’t prevent their wrecking your things. The good news: you can successfully structure your work environment so employees help your organization thrive.

The better news: it’s a whole lot simpler this way. Specifying goals and principles is much easier than dictating behavior. With few exceptions, employees want to succeed. If you’d only tell them what that means … how you define success … they’ll help you get there. They may not do things the way you’d do them, but that’s okay. Different golf pros have different swings, but they all hit the ball very well (and much better than I do).

Far too often, empowerment became a numbers game. Cost-justified by decreasing the manager/worker ratio, empowerment programs reduced interaction between managers and staff. Mistake. The point is to change how they interact, not to reduce the amount of contact.

At its simplest and most profound level, empowerment is about a change in perspective. Managers who don’t believe in empowering their workforce try to keep employees from failing.

Empowering managers help their employees succeed.

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|In: Organizational Effectiveness|Last Updated:

Bob Metcalfe has been predicting the imminent collapse of the Internet in these pages. Since your employer looks to you for technical expertise and advice, and since Dr. Metcalfe is a Recognized Industry Pundit (RIP), you’re probably worried about having recommended building that big Web site.
I’ve decided to offer a different perspective on the problem so you can trot out a second RIP to counter the effects of the first. (Also, if Dr. Metcalfe and I quibble in print you get to gripe about the incestuous nature of the press in Ed Foster’s gripe line, post items in our Forums on InfoWorld Electric (www.infoworld.com) and otherwise feed the liberal media conspiracy.)

Anyhow …the Internet scares people. Commonly described as an anarchic agglomeration of unplanned interconnections, it makes no sense to those who believe central planning is the key to quality.

Many of those same people, Dr. Metcalfe included, also say they believe in the power of laissez-faire capitalist economics. In other words, they believe in the power of Adam Smith’s “invisible hand” that uses market forces to regulate the interplay of independent agents.

From the perspective of general systems theory, this is nothing more than the use of negative feedback loops to create stable systems. (If you’re not familiar with the concept, it just means that inputs listen to outputs, adjusting themselves when the output drifts off course.)

Laissez-faire capitalism says shortages lead to higher prices which reduce demand, eliminating the shortage. Higher prices motivate an increase in production capacity, increasing supply which then reduces price, increasing demand. The result: A self-regulating system with no need for external controls.

Why does Dr. Metcalfe, who believes in this kind of self-regulation for the economy, not believe it will work for the Internet? After all, money comes in along with increased demand. Increased demand leads to supply shortages (poor response time). These shortages certainly can result in higher prices. They also can result in more companies getting into the business, and in existing Internet providers increasing the bandwidth they make available. It’s a pretty basic example of the very same kind of self-regulated economic system most cherished by the all-government-regulation-is-bad crowd.

This doesn’t mean the Internet won’t catastrophically fail this year. Laissez-faire capitalism breaks down in several different circumstances. Here are two:

Any time individuals or organizations compete for a common resource, market forces just plain don’t work.

This is called “First pigs to the trough.” It’s also known as the tragedy of the commons. In merry olde Englande, farmers grazed their cattle on public grazing land – the commons. After awhile, some farmers figured out the more cattle they grazed on public land the more they profited. When all farmers figured it out the cattle overgrazed the commons, ruining it.

Market forces don’t regulate use of a commons – market forces ruin it, leading to the need for external regulation by, for example, the government. Regulation isn’t always a bad thing, despite current political cant.

Another, very interesting way negative feedback loops (including pure free-enterprise economics) lead to unstable results comes from feedback delays. Bring up your spreadsheet and model the “logistic” equation (a very simple negative feedback system): v(t+1)=kv(t)*(1-v(t)). Plot it for a hundred values or so, starting with k=1.1 and v=.01. You’ll see a smooth s-shaped curve.

Change k. Between 2 and 3.5 the curve oscillates. From 3.5 to just over 4 it becomes chaotic, jumping around randomly. Somewhere between 4.01 and 4.001 it crashes to extinction. The lesson: Once feedback isn’t immediate, the value of a constant changes not just the scale of a system but its very nature. The results are unpredictable.

(You’ll find other fascinating tidbits like this in the excellent book, A Mathematician Reads the Newspaper by John Allen Paulos.)

So Dr. Metcalfe may be right – the Internet could turn out to be an unstable, chaotic system.

But I doubt it. I have more faith in free enterprise than that.

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