The HOW Report

The 20'th century adagium "you manage what you measure" - remains as valid as ever. LRN Corporation is a global company that assesses and consults organizations in more than 100 countries. HOW Metrics ® is a suite assessment solutions - that enables organizations to better understand behaviors and forces that animate behavior across their systems.

The 2016 edition of their HOW report ® provides a set of insights for those interested in shaping corporate culture and improving performance outcomes.

A total of 16000 full-time employees in 17 countries across all major industries and occupations rated 69 behavioral markers.

According to LRN, there are three systems that (possibly) contribute to and ignites individual and organizational behavior,

the so called "GCL lens":

1. Governance - formal structures, rules and policies
2. Culture - refers to how things really work around an organization, and
3. Leadership - refers to how power works within an organization, how leaders behave, the source of authority and how it is exercised
   

In the LRN 2012 inaugural edition of the How report - they classified all organizations as either

• Blind obedience - task driven and power based                 30%
• Informed acquiescence - process driven and rules based   62%
• Self-governing  purpose inspired and values based               8%

These three organizational archetypes share one fundamental characteristic:

their Governance and Culture are a reflection of their Leadership.

Self-governing organizations

Self-governing organizations are purpose-inspired, value-based, led with moral authority and outperform all the others.

In self-governing organizations, strong character and high trust animate elevated behaviors. People look to purpose and values to guide them, are conscious of their impact on others, and act deliberately to do what is right. Only in self-governing organizations are people consistently inspired to ask tough questions, share resources and admit mistakes.

Strong character and high-trust in an organization inevitably give rise to a super-engaged group of employees:

• people with pride in the organization,
• who are willing to put forth discretionary efforts on the organizations behalf,
• are committed to staying for the long haul, and
• are excited to bring recruits into the fold.

Too often organizations come to believe that they can change simple behaviors - without taking on the deeper challenges of strengthening character and cultivating trust. Strong moral character and high trust have a crucial and cascading effect on behavior and by extension performance. Character and trust form a core that has an impact on business performance 3.9 times greater than the impact of behaviors alone. Self-governing organizations demonstrate significantly higher levels of values, significance, consciousness and trust.

Self-governing organizations attract people who are inspired to contribute their full character and creativity in pursuit of a shared purpose and give them the freedom to actualize their full potential. As a result, these organizations outperform by all measures.

Diminishing levels of self-governance

Many CEO's are reasonable successful at creating self-governance within their leadership. That is, people they've hired and with whom they work closely. But they and their teams generally fail to scale these same dynamics across their organizations, with the challenge intensifying as employees work further away from the corporate suite.

NB. dit komt overeen met de ervaringen van Ricardo Semler: "Ricardo studied - who were the most motivated among the employees. Invariably: the most motivated held managerial positions. They realized something very fundamental: The power to participate in decision-making processes held the key to motivation."

Inspired

Markers used to measure employee engagement:

1. If I have it my way, I will be working for my organization 12 moths from now
2. I am willing to recommend my organization to a friend as a place to work
3. I am willing to put in a great deal of effort beyond what is normally expected in order to help my organization be successful

Inspired employees demonstrate three characteristics:

1. they are authentically dedicated (e.g. they are proud of their organization for how it acts in the world and therefore internally self-driven to uphold that standard
2. deeply accountable (e.g. motivated to seize authority and meet obligations without oversight
3. fully responsible (e.g. leaning in and inclined to stretch themselves and help colleagues do the same
   
   

Attracting and developing employees who are fully "inspired" - is more important than engagement. Indeed, companies that only measure employee engagement are focusing on the wrong metric. The presence of fully inspired employees is a better predictor of performance.

Engagement is superficial, contingent and transactional, only as strong as the short-term performance of the organization and career trajectory of the employee. Eventually that transaction - externally driven by rewards, advantages/ extra's, and other incentives - will expire.
Inspiration - is fully fueled internally by deeply held beliefs and the connection of those beliefs to work - is enduring and profound.

Innovation

Organizations that score high in trust are characterized by employees that are free to experiment, to fail and to speak their minds. And at the same time, are more likely to share information and collaborate across silos.

High trust allows for risk-taking, which fosters innovation, which is the key driver of performance. We call this dynamic TRIP ®

Employees who work in high-trust environments are

• thirty-two times more likely to take risks - that might benefit the company,
• eleven times more likely to see higher levels of innovation, relative to their competition, and 
• six times more likely to achieve higher levels of performance, compared with others in the industry.

Effective Leadership

For all the differences across the three organizational archetypes, they share one fundamental characteristic: their Governance and Culture are a reflection of their Leadership.

At its core, leadership is:  about getting people to act and to join. There are only three ways to do this

1. coercion
2. motivation
3. inspiration
   
   

Inspirational leaders create the context for long-term thinking. They pause and carve out space for others to take a step away from the pressures of the day-to-day, and connect and re-connect with their purpose and values. They create environments in which people feel free to learn in - and they make themselves small, so that others can do big things.

Great leaders demonstrate the following critical qualities:

1. scaling values
   Installing a deep commitment to values, and to a set of standards, to which people at all levels of the organization hold themselves accountable.
   Operationalized by
   - hold themselves accountable to standards of conduct in line with the organizations values
   - share stories that exemplify how the organization's values come to life
   - explain the role of values in the making of key decisions
   
   
2. pursuing significance
   Enrolling all employees (voluntarily) in a commitment to a shared purpose-inspired mission, that speaks to them as individuals, ignites their passion and unifies them in a meaningful endeavor.
   Operationalized by
   - regularly pause - to discuss the organizations’ purpose
   - identify ways for the organization to renew and fulfill its purpose
   - animated by a clear vision and mission
   
   
3. heightening consciousness
   Building healthy, sustainable, interdependency and connectedness among employees, partners and stakeholders. Extending it to customers and society at large.
   Operationalized by:
   - honor commitments to others
   - seek feedback to strengthen the leadership and increase impact
   - regularly connect with employees in meaningful ways
   
   
4. fostering freedom
   Creating space - by carefully promoting Freedom from traditional constraints, like hierarchy, and filling that space with carefully nurtured Freedom to express oneself, experiment and exercise leadership
   Operationalized by:
   - provide others autonomy, and the resources to achieve
   - encourage others to speak out and voice opinions
   - put in place structures that enable others to make impactful work decisions
   
   

Self-governing organizations have a disproportionate share of leaders that exhibit all four of these qualities.

Journey to Self-governance

Management cannot simply decree Self-governance into being. This type of internal change cannot be driven programmatically and being a stand-alone initiative. Bt rather requires a willful decision to embark on a journey.

To be on a journey means to focus on the way, not just the destination, on How - not What. Journeys are by their nature curvilinear, with ups and downs, often involving one step back to take two forward.

The journey to self-governance starts with complete commitment from the leadership team, requires continual experimentation at the operational unit level, demands a willingness to consistently hold all colleagues accountable and an openness to new structural decision-making frameworks.

Bron