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Fairly Efficient

February 21, 2011

By John Munce, Deployment Executive, The Tatham Group

The seven of us gathered to divide the spoils.  Our uncle had died and left everything to the nieces and nephews.  He left explicit instructions for the guns and cars, vague instructions for the furniture and household goods, and the instruction that family furniture from our grandparents must be divided “without rancor or bitterness.”

As the oldest, I am in charge of the meeting.  Fortunately, we saw each other at least once a year, so we had some kind of relationships.  We avoided the strain of meeting strangers for the first time over the reading of the will. Yet things have changed.  In an instant, everyone jumped from being an interested relative to wondering, “What’s in it for me?”

We came from very different circumstances.  One lives alone in a small apartment in a big city on the west coast.  One has a river house for fly-fishing to escape from the suburbs of a medium east coast town. One is in the midst of divorce and breaking up a household.  One has just completed a divorce and is rebuilding a household.

How could I possibly come up with a method for dividing the loot that would be accepted as fair?  For some people, a sense of fair is only in the outcome.  To make the outcomes absolutely fair, meaning equal, everything must be turned into money.  Yet that offends the sentiments of others.  For other people, a sense of fair is only reached if the process gives everyone a chance to get something considered good.  They can live with a bit of disappointment, if they feel they had an equal chance, even a roll of the dice.  The solution would need to be some kind of hybrid: part random selection, part monetary benefit, and part personal choice.

Many times I’ve been at the table when management teams try to solve a similar problem.  Yes, that includes year-end bonus time, but those are relatively easy.  First, they’re already in monetary terms.  Second, there’s usually a process in place that is simply repeated.  If the management decides to take the easy way, giving everyone the same, the mechanics are simple to complete.

The harder times are when the money is not explicitly on the table.  What is being discussed is a change program.  Work will be done differently.  Teams will organize differently.  Old problems will be solved, finally. The spoils of success will be recognition, more productivity, and higher customer satisfaction.  There may be higher revenue and lower costs.

The game being played is middle manager poker.  Each player is wondering what new headaches will come from this change. Each player avoids showing his hand.  Lots of questions are raised.  Concerns are expressed.  But no one actually opposes it because the boss has sponsored the study.  Everyone is holding cards close to the vest. They keep their expressions bland.

Some are thinking, “This will just throw sand in my team’s gears.  That other area is the source of the problem.  Make them change.” Others are thinking, “This won’t help me get my bonus.” Others still are thinking, “I could have solved this if given a free hand.”  Each manager is thinking, “What’s in it for me?”

The most successful sessions were those where the chairman—or I—had identified ahead of time what each player most cared about.  We could then structure the presentation to make explicit what the benefits would be for each of them.

First, they could see what they cared about written as benefits.  The more explicit the statement, the better the result.  “Increased customer satisfaction” is much too bland.  “Increase customer satisfaction by 1-2% over six months” matters, if they are measured on customer satisfaction.

Second, they could be asked a question that sets up their commitment.  For example, you could ask the ops manager, “The results will reduce overall costs even though costs will go up in your call center.  Can you handle that in your budget, Sam?”

Third, they could be polled.  One chairman used a simple technique.  “We’ve had a chance to discuss this proposal.  There is very encouraging data to support.  Everyone around this table will have to commit something—whether people, money, priority, or personal time. Let’s go around and get your final go or no-go on making this change.”  Sounds like a democracy, but it wasn’t really.  It was an effective way to call people out and then hold them to what they said.

Not as explicit as dividing my uncle’s household goods, management teams choosing change are facing the same challenge.  How do you help the people who care about process feel included?  How do you help the people who care about outcomes feel rewarded? How do you balance very different views of the challenge?

The method I settled on with my cousins was a hybrid. We divided things into five categories, from family heirlooms to junk in the garage.  For low value items, we used open outcry and if there was contention, rolled dice for the decision.  For higher value items, including sentimental ones, we used a random process of drawing numbers from a hat to create the order of selection for each category. Then we shifted the order each round so first became last.  Finally, we just sold the cars and divided up the cash. The hybrid may sound complicated, but at the end, everyone expressed satisfaction in large part.

The success of dividing my uncle’s estate makes me wish I could carry dice into those management meetings and force some decisions.