The world of business is not an easy place. Entrepreneurs and executives live on a knife's edge daily between success and ruin. A stroke of luck, and they are purchasing a yacht and sailing the Bahamas, or one lousy quarter, and could lose their homes. It explains the manic-depressive behavior of business leaders. It also illustrates the frustration particular business leaders feel with their employees. Today, I want to discuss what the Agile community can do to help.
Jon Clifton at the Gallup organization talks about slower economic growth and lower productivity becoming a significant problem in the next decade. The price of this decline could cost over $8.8 trillion over the next ten years. It is an astounding amount of money, or approximately 9% of the global gross domestic product. The reason for this decline is simple, according to Clifton. Workers in all levels of business organizations are disengaged.
To borrow a phrase from my more Marxist friends, a disengaged worker is an alienated worker. Disengaged employees do the bare minimum work because they know that additional advancement or compensation will not arrive, so they do not make any more effort than necessary. For those that follow Tik Tok, younger people call it 'quietly quitting.' The structures designed to discourage innovation and change in the business add to the toxic mix. Inertia like this ensures everyone stays in their place, and the pipeline of products generates a stable amount of income and profit. It is a recipe for mediocrity, and I have never met someone who likes to be mediocre.
As an agile coach or scrum master, how do you fight against this pernicious system of mediocrity? The first step is removing the perverse incentives that many companies use on their employees. I remember working on a software project which had to be swift to market, and many of us put in overtime to make it happen. I asked what would be the reward for all the hard work. The response from my manager was that we would keep our jobs. The project added an extra million dollars to the bottom line. An executive received a bonus, the shareholders an extra penny on the dividend check, and I got to keep my job. Incentives like that discourage innovation and undermine morale. After thirty years of treating employees like this, productivity is falling after the great recession, the cruelty of the forty-fifth president, and a global pandemic. Knowledge workers have shifted their priorities and want to concentrate on supporting their families and following their individual goals. Business leaders need to change, or they will be leading empty organizations that do nothing.
The first step is to build out from the organization's middle and think of the middle layer of the organization as a coaching cohort. For a long time, managers enforced rules and micromanaged employees. The situation needs to change. We must take a coaching approach to people, guiding them with objectives, rapid feedback, and incentives that are not perverse. If a development team of ten people generates a million dollars in sales revenue, one percent of that is a healthy bonus for the extra work to gain the business. Heroic efforts deserve respect and recognition; otherwise, you are just in the business of exploitation.
I am encouraged that some businesses are getting the message. According to Forbes magazine, the virtual assistant company Time Etc is shifting out their managers for coaches; there is one coach for every six employees. The result speaks for itself, and the business improved revenue by twenty percent. Imagine if we create incentives and business cultures where people feel valued. An improvement of 20% is an incredible accomplishment and will lift up plenty of people. With some luck, we can get a slice of those 8.8 trillion dollars left on the table by poor business leadership.
Until next time.
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