Conscious Business: Leadership

Aug 27, 2017 · 1252 words · 6 minutes read business conscious-business leadership

Previous: Introduction

LinkedIn Conscious Business Week 2: Leadership

From the introduction:

For each week of this course I am going to take my notes on what I learned and turn it into a short blog post. I am hoping this will encourage you to take a look at the course and maybe do it yourself.

We’re back with another Conscious Business post. This time the focus is on leadership. This week’s content I found to be especially inspiring and motivating. It gave many different ways of thinking that I found to be very relevant in both my work and personal life.

Your Job Is Not Your Job

When we go to answer the question “what is your job?”, we may immediately think of our occupation or title. Many of us will say “I’m an engineer”, or “I’m a teacher”. My first response was “I’m a software engineer,” and while that may be accurate, there is a better way of thinking about your job.

“Your job is not what you do, but the goal you pursue.”

Consider a game of Soccer, where you have defensive and offensive players. Now if you are a defensive player and have to explain your job, you might say something like “my job is to defend the goal”. Similarly, if you’re an offensive player you might say that “ my job is to score goals”. And like before these explanations are be accurate.

Yet, These explanations have some issues. Consider what happens if there’s five minutes left on the clock. Then the coach decides it would be a good idea for an offensive player to play defence. Using the offensive player’s explanation, they might respond with “that’s not my job, my job is to score goals.”

This is obviously ridiculous and, as a coach, you definitely wouldn’t want a player like this on your team. Yet, this scenario shows the importance of viewing your job as your goal, and not what you do. Each player on the team has the same job, the same goal. The team has the goal to win, and so the players’ goal is to help the team win.

“Notice how different it is to say ‘my job is to teach’ rather than saying ‘my job is to help my students learn.’” - Fred Kofman

When you think about your job in this way you become more goal orientated. What you do becomes a means to an end in achieving the team’s goal. This way of thinking is easy to translate from the Soccer field to the business world and your company. The company has a goal, to win, and so your job as an employee is to help the company win.

Conflicts of Interest

It is a known mathematical truth that to optimize non-linear systems, you must optimize each subsystem. This is seen in business where teams of people are optimized to improve the company as a whole. And so people tend to get measured by the performance of their subsystem, whether that be the team they run, the project they are working on, or themselves as part of that team. As their compensation will depend on these metrics, they become the main focus of their work.

If we go back to the Soccer team we can apply this style of management by objectives to the team. We will then pay each player based on their main objectives. The defenders based on how many goals they prevent; and the attackers based on how many goals they score. Now we have a system: the team, two subsystems: attackers and defenders, and we’re going to measure and optimize based on the role, and thus the objectives, of each player.

But now, consider this. If you’re a defender and you have a choice to win 5 - 4, or to lose 0 - 1 then you would want to lose the game so you can let less goals in and get paid more. There’s a similar issue with the attackers. If given the choice to win 3 - 1, or to lose 4 - 5 then their choice would be to lose. This is a clear conflict of interest with the team’s goal and the job of each player.

As said by Fred Kofman, “every organisation in the world has this problem.” It’s a problem that isn’t just persistent in business. In fact it’s a deep, and much debated, economical problem. You may be thinking, let’s remove the incentives for attackers and defenders, and pay all players more if the team wins. But there are issues with providing these kind global incentives as well.

The good parts of global incentives is that it provides alignment and encouraged cooperation. There is also a benefit known as risk pooling which comes from everyone working towards the same goal. Although it then becomes a lot easier to get free riders in the organisation. Management complexity increases and it becomes harder to keep everyone happy with the same incentives. There is another known issue called adverse selection. This is where those that are good performers will attract the bad performers. Risk pooling means that the extra work the good guys do will average out with the lack of work done by the free loaders.

Localised incentives have their own pros and cons. They provide accountability and encourage everyone to be focused and work hard to be a good performer. And so favorable selection occurs so the free loaders don’t mooch off the hard workers. But the cons of local incentives are that teams end up working with a silo mentality. They will only care about themselves and not what other teams are doing. Each team also bears all the risk of their actions and so they may be more conservative with their risk taking. These issues end up forming a conflict of interest with the goal of the organisation, as we saw with the Soccer team.

This is an impossible problem. But “like two people in the woods being chased by a bear, you don’t have to solve it, you just have to manage it better than your competitors.”

True Leaders Have No Followers

This concept seems strange at first glance. When you think of a leader you often think of them leading their followers. There are a lot “leaders” that think this way too.

Fred uses the example of a big wave rider. This is a person who goes out into the water and surfs enormous waves the height of buildings. These guys don’t have people who follow them into a very dangerous position. Instead, they invite people to join them on this vision of riding big waves. And they come along for the experience and to enjoy it with the leaders of big wave surfing.

This example shows that a true leader doesn’t have people following them. Rather they are inviting a guiding others to move towards their vision. They work for these people to become a point of reference for their ‘followers’. They express their vision, and the values that unify the team and empower them to achieve their goal.

A leader inspires others to accomplish a mission; a boss controls others to do as they are told. A leader seeks internal commitment; a boss demands external compliance.

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