Jul 18 2007
Interview: Jeffrey Pfeffer on his book “What Were They Thinking”
Guy Kawasaki has a great interview with Jeffrey Pfeffer (Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University) related to his book What Were They Thinking?: Unconventional Wisdom About Management. What really struck me as interesting was how true some of sentiments rang with me. I few Questions and Answers that really hit home are quoted below.
Question: What can companies do to get smarter?
Answer: Companies learn just like people learn—by trying new things and seeing what happens. That requires, first, a tolerance for failure, since by definition, learning means doing things you aren’t very good at.Second, it requires structured self-reflection—after-action or after-event reviews so that instead of having one year of experience repeated 20 times, people and companies actually accumulate learning over time.”
Question: What are the characteristics of a good work week and vacation policy?
Answer: We live in a world where ideas and innovation are paramount. But people can’t be creative if they are exhausted. And when people work when they are tired, they make mistakes. If we have learned anything from the quality movement, it is that the cost of finding and fixing mistakes is greater than the cost of preventing them. So, give people time off. And, by the way, the younger generations want a life as well as work. Work-life balance is a great way to attract—and retain—great people.
Question: What are the characteristics of a good incentive plan?
Answer: Incentives should be large enough to provide an occasion for celebrating success but not so large as to distort behavior. And incentives can include recognition and things other than money. Companies get themselves into trouble all the time by being too clever with their incentives.
Stock options did reward leaders for getting the price of the stock up—it’s just that it was often for a short period, and was accomplished by distorting earnings. Be careful what you pay for—you might just get it.
Question: What role should budgets play in the management of an organization?
Answer: Budgets should be general guidelines. As hard and fast rules, they become subject to “gaming.” People delay doing sensible things, push expenses around, hide sales, etc. And also, budgets often just reward the best forecasters and negotiators. It is possible to make “budget” as you lose market share and go broke, as long as the targets are set low enough.
Think about your organization and how these questions and opinions line up with what your company does or does not do? How would some of this advise go over at your company? Is it unconventional or down-right heresy? Have some of the effects mentioned by actions in these questions come true at your organization?
