Difficult people defy logic. Some are blissfully unaware of the negative impact that they have on those around them, and others seem to derive satisfaction from creating chaos and pushing other people’s buttons. Either way, they create unnecessary complexity, strife, and worst of all stress.
Studies have long shown that stress can have a lasting, negative impact on the brain. Exposure to even a few days of stress compromises the effectiveness of neurons in the hippocampus—an important brain area responsible for reasoning and memory. Weeks of stress cause reversible damage to neuronal dendrites (the small “arms” that brain cells use to communicate with each other), and months of stress can permanently destroy neurons. Stress is a formidable threat to your success—when stress gets out of control, your brain and your performance suffer.
Most sources of stress at work are easy to identify. If your non-profit is working to land a grant that your organization needs to function, you’re bound to feel stress and likely know how to manage it. It’s the unexpected sources of stress that take you by surprise and harm you the most.
Recent research from the Department of Biological and Clinical Psychology at Friedrich Schiller University in Germany found that exposure to stimuli that cause strong negative emotions—the same kind of exposure you get when dealing with difficult people—caused subjects’ brains to have a massive stress response. Whether it’s negativity, cruelty, the victim syndrome, or just plain craziness, difficult people drive your brain into a stressed-out state that should be avoided at all costs.
The ability to manage your emotions and remain calm under pressure has a direct link to your performance. TalentSmart has conducted research with more than a million people, and we’ve found that 90% of top performers are skilled at managing their emotions in times of stress in order to remain calm and in control. One of their greatest gifts is the ability to neutralize difficult people. Top performers have well-honed coping strategies that they employ to keep difficult people at bay.
While I’ve run across numerous effective strategies that smart people employ when dealing with difficult people, what follows are some of the best. To deal with difficult people effectively, you need an approach that enables you, across the board, to control what you can and eliminate what you can’t. The important thing to remember is that you are in control of far more than you realize.
They set limits. Complainers and negative people are bad news because they wallow in their problems and fail to focus on solutions. They want people to join their pity party so that they can feel better about themselves. People often feel pressure to listen to complainers because they don’t want to be seen as callous or rude, but there’s a fine line between lending a sympathetic ear and getting sucked into their negative emotional spiral.
You can avoid this only by setting limits and distancing yourself when necessary. Think of it this way: if the complainer were smoking, would you sit there all afternoon inhaling the second-hand smoke? You’d distance yourself, and you should do the same with complainers. A great way to set limits is to ask complainers how they intend to fix the problem. They will either quiet down or redirect the conversation in a productive direction.
They rise above. Difficult people drive you crazy because their behavior is so irrational. Make no mistake about it; their behavior truly goes against reason. So why do you allow yourself to respond to them emotionally and get sucked into the mix? The more irrational and off-base someone is, the easier it should be for you to remove yourself from their traps. Quit trying to beat them at their own game. Distance yourself from them emotionally and approach your interactions like they’re a science project (or you’re their shrink, if you prefer the analogy). You don’t need to respond to the emotional chaos—only the facts.
They stay aware of their emotions. Maintaining an emotional distance requires awareness. You can’t stop someone from pushing your buttons if you don’t recognize when it’s happening. Sometimes you’ll find yourself in situations where you’ll need to regroup and choose the best way forward. This is fine and you shouldn’t be afraid to buy yourself some time to do so.
Think of it this way—if a mentally unstable person approaches you on the street and tells you he’s John F. Kennedy, you’re unlikely to set him straight. When you find yourself with a coworker who is engaged in similarly derailed thinking, sometimes it’s best to just smile and nod. If you’re going to have to straighten them out, it’s better to give yourself some time to plan the best way to go about it.
They establish boundaries. This is the area where most people tend to sell themselves short. They feel like because they work or live with someone, they have no way to control the chaos. This couldn’t be further from the truth. Once you’ve found your way to Rise Above a person, you’ll begin to find their behavior more predictable and easier to understand. This will equip you to think rationally about when and where you have to put up with them and when you don’t. For example, even if you work with someone closely on a project team, that doesn’t mean that you need to have the same level of one-on-one interaction with them that you have with other team members.
You can establish a boundary, but you’ll have to do so consciously and proactively. If you let things happen naturally, you are bound to find yourself constantly embroiled in difficult conversations. If you set boundaries and decide when and where you’ll engage a difficult person, you can control much of the chaos. The only trick is to stick to your guns and keep boundaries in place when the person tries to encroach upon them, which they will.
They don’t die in the fight. Smart people know how important it is to live to fight another day, especially when your foe is a toxic individual. In conflict, unchecked emotion makes you dig your heels in and fight the kind of battle that can leave you severely damaged. When you read and respond to your emotions, you’re able to choose your battles wisely and only stand your ground when the time is right.
They don’t focus on problems—only solutions. Where you focus your attention determines your emotional state. When you fixate on the problems you’re facing, you create and prolong negative emotions and stress. When you focus on actions to better yourself and your circumstances, you create a sense of personal efficacy that produces positive emotions and reduces stress.
When it comes to toxic people, fixating on how crazy and difficult they are giving them power over you. Quit thinking about how troubling your difficult person is, and focus instead on how you’re going to go about handling them. This makes you more effective by putting you in control, and it will reduce the amount of stress you experience when interacting with them.
They don’t forget. Emotionally intelligent people are quick to forgive, but that doesn’t mean that they forget. Forgiveness requires letting go of what’s happened so that you can move on. It doesn’t mean you’ll give a wrongdoer another chance. Smart people are unwilling to be bogged down unnecessarily by others’ mistakes, so they let them go quickly and are assertive in protecting themselves from future harm.
They squash negative self-talk. Sometimes you absorb the negativity of other people. There’s nothing wrong with feeling bad about how someone is treating you, but your self-talk (the thoughts you have about your feelings) can either intensify the negativity or help you move past it. Negative self-talk is unrealistic, unnecessary, and self-defeating. It sends you into a downward emotional spiral that is difficult to pull out of. You should avoid negative self-talk at all costs.
They get some sleep. I’ve beaten this one to death over the years and can’t say enough about the importance of sleep to increasing your emotional intelligence and managing your stress levels. When you sleep, your brain literally recharges, so that you wake up alert and clear-headed. Your self-control, attention, and memory are all reduced when you don’t get enough—or the right kind—of sleep. Sleep deprivation raises stress hormone levels on its own, even without a stressor present. A good night’s sleep makes you more positive, creative, and proactive in your approach to toxic people, giving you the perspective you need to deal effectively with them.
They use their support system. It’s tempting, yet entirely ineffective, to attempt tackling everything by yourself. To deal with toxic people, you need to recognize the weaknesses in your approach to them. This means tapping into your support system to gain perspective on a challenging person. Everyone has someone at work and/or outside work who is on their team, rooting for them, and ready to help them get the best from a difficult situation. Identify these individuals in your life and make an effort to seek their insight and assistance when you need it. Something as simple as explaining the situation can lead to a new perspective. Most of the time, other people can see a solution that you can’t because they are not as emotionally invested in the situation.
Bringing It All Together
Before you get this system to work brilliantly, you’re going to have to pass some tests. Most of the time, you will find yourself tested by touchy interactions with problem people. Thankfully, the plasticity of the brain allows it to mold and change as you practice new behaviors, even when you fail. Implementing these healthy, stress-relieving techniques for dealing with difficult people will train your brain to handle stress more effectively and decrease the likelihood of ill effects.
Please share your thoughts in the comments section below, as I learn just as much from you as you do from me.
ABOUT THE AUTHOR:
Dr. Travis Bradberry is the award-winning co-author of the #1 bestselling book, Emotional Intelligence 2.0, and the cofounder of TalentSmart, the world’s leading provider of emotional intelligence tests, emotional intelligence training, and emotional intelligence certification, serving more than 75% of Fortune 500 companies. His bestselling books have been translated into 25 languages and are available in more than 150 countries. Dr. Bradberry has written for, or been covered by, Newsweek, BusinessWeek, Fortune, Forbes, Fast Company, Inc., USA Today, The Wall Street Journal, The Washington Post, and The Harvard Business Review
The challenge is a long-standing one for senior managers: How do you get people in your organization to work together across internal boundaries? But the question has taken on urgency in today’s global and fast-changing business environment. To service multinational accounts, you increasingly need seamless collaboration across geographic boundaries. To improve customer satisfaction, you increasingly need collaboration among functions ranging from R&D to distribution. To offer solutions tailored to customers’ needs, you increasingly need collaboration between product and service groups. Meanwhile, as competitive pressures continually force companies to find ways to do more with less, few managers have the luxury of relying on their own dedicated staffs to accomplish their objectives. Instead, most must work with and through people across the organization, many of whom have different priorities, incentives, and ways of doing things.
Getting collaboration right promises tremendous benefits: a unified face to customers, faster internal decision making, reduced costs through shared resources, and the development of more innovative products. But despite the billions of dollars spent on initiatives to improve collaboration, few companies are happy with the results. Time and again we have seen management teams employ the same few strategies to boost internal cooperation. They restructure their organizations and re-engineer their business processes. They create cross-unit incentives. They offer teamwork training. While such initiatives yield the occasional success story, most of them have an only limited impact in dismantling organizational silos and fostering collaboration—and many are total failures. (See the sidebar “The Three Myths of Collaboration.”)
The Three Myths of Collaboration
So what’s the problem? Most companies respond to the challenge of improving collaboration in entirely the wrong way. They focus on the symptoms (“Sales and delivery do not work together as closely as they should”) rather than on the root cause of failures in cooperation: conflict. The fact is, you can’t improve collaboration until you’ve addressed the issue of conflict. This can come as a surprise to even the most experienced executives, who generally don’t fully appreciate the inevitability of conflict in complex organizations. And even if they do recognize this, many mistakenly assume that efforts to increase collaboration will significantly reduce that conflict, when in fact some of these efforts—for example, restructuring initiatives—actually produce more of it.
Executives underestimate not only the inevitability of conflict but also—and this is key—its importance to the organization. The disagreements sparked by differences in perspective, competencies, access to information, and strategic focus within a company actually generate much of the value that can come from collaboration across organizational boundaries. Clashes between parties are the crucibles in which creative solutions are developed and wise trade-offs among competing objectives are made. So instead of trying simply to reduce disagreements, senior executives need to embrace conflict and, just as important, institutionalize mechanisms for managing it. Clashes between parties are the crucibles in which creative solutions are developed and wise trade-offs among competing objectives are made.
Even though most people lack an innate understanding of how to deal with conflict effectively, there are a number of straightforward ways that executives can help their people—and their organizations—constructively manage it. These can be divided into two main areas: strategies for managing disagreements at the point of conflict and strategies for managing conflict upon escalation up the management chain. These methods can help a company move through the conflict that is a necessary precursor to truly effective collaboration and, more important, extract the value that often lies latent in intra-organizational differences. When companies are able to do both, conflict is transformed from a major liability into a significant asset.
Strategies for Managing Disagreements at the Point of Conflict
Conflict management works best when the parties involved in a disagreement are equipped to manage it themselves. The aim is to get people to resolve issues on their own through a process that improves—or at least does not damage—their relationships. The following strategies help produce decisions that are better informed and more likely to be implemented.
Devise and implement a common method for resolving conflict.
Consider for a moment the hypothetical Matrix Corporation, a composite of many organizations we’ve worked with those challenges will likely be familiar to managers. Over the past few years, salespeople from nearly a dozen of Matrix’s product and service groups have been called on to design and sell integrated solutions to their customers. For any given sale, five or more lead salespeople and their teams have to agree on issues of resource allocation, solution design, pricing, and sales strategy. Not surprisingly, the teams are finding this difficult. Who should contribute the most resources to a particular customer’s offering? Who should reduce the scope of their participation or discount their pricing to meet a customer’s budget? Who should defer when disagreements arise about account strategy? Who should manage key relationships within the customer account? Indeed, given these thorny questions, Matrix is finding that a single large sale typically generates far more conflict inside the company than it does with the customer. The resulting wasted time and damaged relationships among sales teams are making it increasingly difficult to close sales.
Most companies face similar sorts of problems. And, like Matrix, they leave employees to find their own ways of resolving them. But without a structured method for dealing with these issues, people get bogged down not only in what the right result should be but also in how to arrive at it. Often, they will avoid or work around conflict, thereby forgoing important opportunities to collaborate. And when people do decide to confront their differences, they usually default to the approach they know best: debating about who’s right and who’s wrong or haggling over small concessions. Among the negative consequences of such approaches are suboptimal, “split-the-difference” resolutions—if not outright deadlock.
Establishing a companywide process for resolving disagreements can alter this familiar scenario. At the very least, a well-defined, well-designed conflict resolution method will reduce transaction costs, such as wasted time and the accumulation of ill will, that often come with the struggle to work through differences. At best, it will yield the innovative outcomes that are likely to emerge from discussions that draw on a multitude of objectives and perspectives. There is an array of conflict resolution methods a company can use. But to be effective, they should offer a clear, step-by-step process for parties to follow. They should also be made an integral part of existing business activities—account planning, sourcing, R&D budgeting, and the like. If conflict resolution is set up as a separate, exception-based process—a kind of organizational appeals court—it will likely wither away once initial managerial enthusiasm wanes.
Provide people with criteria for making trade-offs.
At our hypothetical Matrix Corporation, senior managers overseeing cross-unit sales teams often admonish those teams to “do what’s right for the customer.” Unfortunately, this exhortation isn’t much help when conflict arises. Given Matrix’s ability to offer numerous combinations of products and services, company managers—each with different training and experience and access to different information, not to mention different unit priorities—have, not surprisingly, different opinions about how best to meet customers’ needs. Similar clashes in perspective result when exasperated senior managers tell squabbling team members to set aside their differences and “put Matrix’s interests first.” That’s because it isn’t always clear what’s best for the company given the complex interplay among Matrix’s objectives for revenue, profitability, market share, and long-term growth.
Even when companies equip people with a common method for resolving conflict, employees often will still need to make zero-sum trade-offs between competing priorities. That task is made much easier and less contentious when top management can clearly articulate the criteria for making such choices. Obviously, it’s not easy to reduce a company’s strategy to clearly defined trade-offs, but it’s worth trying. For example, salespeople who know that five points of market share are more important than a ten point increase on a customer satisfaction scale are much better equipped to make strategic concessions when the needs and priorities of different parts of the business conflict. And even when the criteria do not lead to a straightforward answer, the guidelines can at least foster productive conversations by providing an objective focus. Establishing such criteria also sends a clear signal from management that it views conflict as an inevitable result of managing a complex business.
At Blue Cross and Blue Shield of Florida, the strategic decision to rely more and more on alliances with other organizations has significantly increased the potential for disagreement in an organization long accustomed to developing capabilities in-house. Decisions about whether to build new capabilities, buy them outright, or gain access to them through alliances are natural flashpoints for conflict among internal groups. The health insurer might have tried to minimize such conflict through a structural solution, giving a particular group the authority to make decisions concerning whether, for instance, to develop a new claims-processing system in-house, to do so jointly with an alliance partner, or to license or acquire an existing system from a third party. Instead, the company established a set of criteria designed to help various groups within the organization—for example, the enterprise alliance group, IT, and marketing—to collectively make such decisions.
The criteria are embodied in a spreadsheet-type tool that guides people in assessing the trade-offs involved—say, between speed in getting a new process up and running versus ensuring its seamless integration with existing ones—when deciding whether to build, buy, or ally. People no longer debate back and forth across a table, advocating their preferred outcomes. Instead, they sit around the table and together apply a common set of trade-off criteria to the decision at hand. The resulting insights into the pros and cons of each approach enable more effective execution, no matter which path is chosen.
Use the escalation of conflict as an opportunity for coaching.
Managers at Matrix spend much of their time playing the organizational equivalent of hot potato. Even people who are new to the company learn within weeks that the best thing to do with cross-unit conflict is to toss it up the management chain. Immediate supervisors take a quick pass at resolving the dispute but, being busy themselves, usually pass it up to their supervisors. Those supervisors do the same, and before long the problem lands in the lap of a senior-level manager, who then spends much of his time resolving disagreements. Clearly, this isn’t ideal. Because the senior managers are a number of steps removed from the source of the controversy, they rarely have a good understanding of the situation. Furthermore, the more time they spend resolving internal clashes, the less time they spend engaged in the business, and the more isolated they are from the very information they need to resolve the disputes dumped in their laps. Meanwhile, Matrix employees get so little opportunity to learn about how to deal with conflict that it becomes not only expedient but almost necessary for them to quickly bump conflict up the management chain.
While Matrix’s story may sound extreme, we can hardly count the number of companies we’ve seen that operate this way. And even in the best of situations—for example, where a companywide conflict-management process is in place and where trade-off criteria are well understood—there is still a natural tendency for people to let their bosses sort out disputes. Senior managers contribute to this tendency by quickly resolving the problems presented to them. While this may be the fastest and easiest way to fix the problems, it encourages people to punt issues upstairs at the first sign of difficulty. Instead, managers should treat escalations as opportunities to help employees become better at resolving a conflict.
At KLA-Tencor, a major manufacturer of semiconductor production equipment, a materials executive in each division oversees a number of buyers who procure the materials and component parts for machines that the division makes. When negotiating a companywide contract with a supplier, a buyer often must work with the company commodity manager, as well as with buyers from other divisions who deal with the same supplier. There is often conflict, for example, over the delivery terms for components supplied to two or more divisions under the contract. In such cases, the commodity manager and the division materials executive will push the division buyer to consider the needs of the other divisions, alternatives that might best address the collective needs of the different divisions, and the standards to be applied in assessing the trade-offs between alternatives. The aim is to help the buyer see solutions that haven’t yet been considered and to resolve the conflict with the buyer in the other division.
Initially, this approach required more time from managers than if they had simply made the decisions themselves. But it has paid off in fewer disputes that senior managers need to resolve, speedier contract negotiation, and improved contract terms both for the company as a whole and for multiple divisions. For example, the buyers from three KLA-Tencor product divisions recently locked horns over a global contract with a key supplier. At issue was the trade-off between two variables: one, the supplier’s level of liability for materials it needs to purchase in order to fulfill orders and, two, the flexibility granted the KLA-Tencor divisions in modifying the size of the orders and their required lead times. Each division demanded a different balance between these two factors, and the buyers took the conflict to their managers, wondering if they should try to negotiate each of the different trade-offs into the contract or pick among them. After being coached to consider how each division’s business model shaped its preference—and using this understanding to jointly brainstorm alternatives—the buyers and commodity manager arrived at a creative solution that worked for everyone: They would request a clause in the contract that allowed them to increase and decrease flexibility in order volume and lead time, with corresponding changes in supplier liability, as required by changing market conditions.
Strategies for Managing Conflict upon Escalation
Equipped with common conflict resolution methods and trade-off criteria, and supported by systematic coaching, people are better able to resolve conflict on their own. But certain complex disputes will inevitably need to be decided by superiors. Consequently, managers must ensure that, upon escalation, conflict is resolved constructively and efficiently—and in ways that model desired behaviors.
Establish and enforce a requirement of joint escalation.
Let’s again consider the situation at Matrix. In a typical conflict, three salespeople from different divisions become involved in a dispute over pricing. Frustrated, one of them decides to hand the problem up to his boss, explaining the situation in a short voice-mail message. The message offers little more than a bare acknowledgment of the other salespeople’s’ viewpoints. The manager then determines, on the basis of what he knows about the situation, the solution to the problem. The salesperson, armed with his boss’s decision, returns to his counterparts and shares with them the verdict—which, given the process, is simply a stronger version of the solution the salesperson had put forward in the first place. But wait! The other two salespeople have also gone to their managers and carried back stronger versions of their solutions. At this point, each salesperson is locked into what is now “my manager’s view” of the right pricing scheme. The problem, already thorny, has become even more intractable.
A few years ago, after a merger that resulted in a much larger and more complex organization, senior managers at the Canadian telecommunications company Telus found themselves virtually paralyzed by a daily barrage of unilateral escalations. Just determining who was dealing with what and who should be talking to whom took up huge amounts of senior management’s time. So the company made joint escalation a central tenet of its new organization-wide protocols for conflict resolution—a requirement given teeth by managers’ refusal to respond to unilateral escalation. When a conflict occurred among managers in different departments concerning, say, the allocation of resources among the departments, the managers were required to jointly describe the problem, what had been done so far to resolve it, and its possible solutions. Then they had to send a joint write-up of the situation to each of their bosses and stand ready to appear together and answer questions when those bosses met to work on a solution. In many cases, the requirement of systematically documenting the conflict and efforts to resolve it—because it forced people to make such efforts—led to a problem being resolved on the spot, without having to be kicked upstairs. Within weeks, this process resulted in the resolution of hundreds of issues that had been stalled for months in the newly merged organization.
Ensure that managers resolve escalated conflicts directly with their counterparts.
Let’s return to the three salespeople at Matrix who took their dispute over pricing to their respective bosses and then met again, only to find themselves further from an agreement than before. So what did they do at that point? They sent the problem back to their bosses. These three bosses, each of whom thought he’d already resolved the issue, decided the easiest thing do would be to escalate it themselves. This would save them time and put the conflict before senior managers with the broad view seemingly needed to make a decision. Unfortunately, by doing this, the three bosses simply perpetuated the situation their salespeople had created, putting forward a biased viewpoint and leaving it to their own managers to come up with an answer. In the end, the decision was made unilaterally by the senior manager with the most organizational clout. This result bred resentment back down the management chain. A sense of “we’ll win next time” took hold, ensuring that future conflict would be even more difficult to resolve.
It’s not unusual to see managers react to escalations from their employees by simply passing conflicts up their own functional or divisional chains until they reach a senior executive involved with all the affected functions or divisions. Besides providing a poor example for others in the organization, this can be disastrous for a company that needs to move quickly. To avoid wasting time, a manager somewhere along the chain might try to resolve the problem swiftly and decisively by herself. But this, too, has its costs. In a complex organization, where many issues have significant implications for numerous parts of the business, unilateral responses to unilateral escalations are a recipe for inefficiency, bad decisions, and ill feelings.
The solution to these problems is a commitment by managers—a commitment codified in a formal policy—to deal with escalated conflict directly with their counterparts. Of course, doing this can feel cumbersome, especially when an issue is time-sensitive. But resolving the problem early on is ultimately more efficient than trying to sort it out later after a decision becomes known because it has negatively affected some part of the business.
In the 1990s, IBM’s sales and the delivery organization became increasingly complex as the company reintegrated previously independent divisions and reorganized itself to provide customers with full solutions of bundled products and services. Senior executives soon recognized that managers were not dealing with escalated conflicts and that relationships among them were strained because they failed to consult and coordinate around cross-unit issues. This led to the creation of a forum called the Market Growth Workshop (a name carefully chosen to send a message throughout the company that getting cross-unit conflict resolved was critical to meeting customer needs and, in turn, growing market share). These monthly conference calls brought together managers, salespeople, and frontline product specialists from across the company to discuss and resolve cross-unit conflicts that were hindering important sales—for example, the difficulty salespeople faced in getting needed technical resources from overstretched product groups.
The Market Growth Workshops weren’t successful right away. In the beginning, busy senior managers, reluctant to spend time on issues that often hadn’t been carefully thought through, began sending their subordinates to the meetings—which made it even more difficult to resolve the problems discussed. So the company developed a simple preparation template that forced people to document and analyze disputes before the conference calls. Senior managers, realizing the problems created by their absence, recommitted themselves to attending the meetings. Over time, as complex conflicts were resolved during these sessions and significant sales were closed, attendees began to see these meetings as an opportunity to be involved in the resolution of high-stakes, high-visibility issues.
Make the process for escalated conflict resolution transparent.
When a sales conflict is resolved by a Matrix senior manager, the word comes down the management chain in the form of an action item: Put together an offering with this particular mix of products and services at these prices. The only elaboration may be an admonishment to “get the sales team together, work up a proposal, and get back to the customer as quickly as possible.” The problem is solved, at least for the time being. But the salespeople—unless they have been able to divine themes from the patterns of decisions made over time—are left with little guidance on how to resolve similar issues in the future. They may justifiably wonder: How was the decision made? Based on what kinds of assumptions? With what kinds of trade-offs? How might the reasoning change if the situation were different?
In most companies, once managers have resolved a conflict, they announce the decision and move on. The resolution process and rationale behind the decision are left inside a managerial black box. While it’s rarely helpful for managers to share all the gory details of their deliberations around contentious issues, failing to take the time to explain how a decision was reached and the factors that went into it squanders a major opportunity. A frank discussion of the trade-offs involved in decisions would provide guidance to people trying to resolve conflicts in the future and would help nip in the bud the kind of speculation—who won and who lost, which managers or units have the most power—that breeds mistrust, sparks turf battles, and otherwise impedes cross-organizational collaboration. In general, clear communication about the resolution of the conflict can increase people’s willingness and ability to implement decisions.
During the past two years, IBM’s Market Growth Workshops have evolved into a more structured approach to managing escalated conflict, known as Cross-Team Workouts. Designed to make conflict resolution more transparent, the workouts are weekly meetings of people across the organization who work together on sales and delivery issues for specific accounts. The meetings provide a public forum for resolving conflicts over account strategy, solution configuration, pricing, and delivery. Those issues that cannot be resolved at the local level are escalated to regional workout sessions attended by managers from product groups, services, sales, and finance. Attendees then communicate and explain meeting resolutions to their reports. Issues that cannot be resolved at the regional level are escalated to an even higher-level workout meeting attended by cross-unit executives from a larger geographic region—like the Americas or Asia Pacific—and chaired by the general manager of the region presenting the issue. The most complex and strategic issues reach this global forum. The overlapping attendance at these sessions—in which the managers who chair one level of meeting attend sessions at the next level up, thereby observing the decision-making process at that stage—further enhances the transparency of the system among different levels of the company. IBM has further formalized the process for the direct resolution of conflicts between services and product sales on large accounts by designating a managing director in sales and a global relationship partner in IBM global services as the ultimate point of resolution for escalated conflicts. By explicitly making the resolution of complex conflicts part of the job descriptions for both managing director and global relationship partner—and by making that clear to others in the organization—IBM has reduced ambiguity, increased transparency, and increased the efficiency with which conflicts are resolved.
Tapping the Learning Latent in Conflict
The six strategies we have discussed constitute a framework for effectively managing organizational discord, one that integrates conflict resolution into day-to-day decision-making processes, thereby removing a critical barrier to cross-organizational collaboration. But the strategies also hint at something else: that conflict can be more than a necessary antecedent to collaboration.
Let’s return briefly to Matrix. More than three-quarters of all cross-unit sales at the company trigger disputes about pricing. Roughly half of the sales lead to clashes over account control. A substantial number of sales also produce disagreements over the design of customer solutions, with the conflict often rooted in divisions’ incompatible measurement systems and the concerns of some people about the quality of the solutions being assembled. But managers are so busy trying to resolve these almost daily disputes that they don’t see the patterns or sources of conflict. Interestingly, if they ever wanted to identify patterns like these, Matrix managers might find few signs of them. That’s because salespeople, who regularly hear their bosses complain about all the disagreements in the organization, have concluded that they’d better start shielding their superiors from discord.
The situation at Matrix is not unusual—most companies view conflict as an unnecessary nuisance—but that view is unfortunate. When a company begins to see conflict as a valuable resource that should be managed and exploited, it is likely to gain insight into problems that senior managers may not have known existed. Because internal friction is often caused by unaddressed strains within an organization or between an organization and its environment, setting up methods to track conflict and examine its causes can provide an interesting new perspective on a variety of issues. In the case of Matrix, taking the time to aggregate the experiences of individual salespeople involved in recurring disputes would likely lead to better approaches to setting prices, establishing incentives for salespeople, and monitoring the company’s quality control process.
At Johnson & Johnson, an organization that has a highly decentralized structure, conflict is recognized as a positive aspect of cross-company collaboration. For example, a small internal group charged with facilitating sourcing collaboration among J&J’s independent operating companies—particularly their outsourcing of clinical research services—actively works to extract lessons from conflicts. The group tracks and analyzes disagreements about issues such as what to outsource, whether and how to shift spending among suppliers, and what supplier capabilities to invest in. It hosts a council, comprising representatives from the various operating companies, that meets regularly to discuss these differences and explore their strategic implications. As a result, trends in clinical research outsourcing are spotted and information about them is disseminated throughout J&J more quickly. The operating companies benefit from insights about new offshoring opportunities, technologies, and ways of structuring collaboration with suppliers. And J&J, which can now piece together an accurate and global view of its suppliers, is better able to partner with them. Furthermore, the company realizes more value from its relationship with suppliers—yet another example of how the effective management of conflict can ultimately lead to fruitful collaboration.
J&J’s approach is unusual but not unique. The benefits it offers to provide further evidence that conflict—so often viewed as a liability to be avoided whenever possible—can be valuable to a company that knows how to manage it.
Posted at: http://hbr.org/2005
Business today is largely run by teams and populated by authority-averse baby boomers and Generation Xers. That makes persuasion more important than ever as a managerial tool. But contrary to popular belief, the author asserts, persuasion is not the same as selling an idea or convincing opponents to see things your way. It is instead a process of learning from others and negotiating a shared solution. To that end, persuasion consists of four essential elements: establishing credibility, framing to find common ground, providing vivid evidence, and connecting emotionally. Credibility grows, the author says, out of two sources: expertise and relationships. The former is a function of product or process knowledge and the latter a history of listening to and working in the best interest of others. But even if a persuader’s credibility is high, his position must make sense–even more, it must appeal–to the audience. Therefore, a persuader must frame his position to illuminate its benefits to everyone who will feel its impact. Persuasion then becomes a matter of presenting evidence–but not just ordinary charts and spreadsheets. The author says the most effective persuaders use vivid–even over-the-top–stories, metaphors, and examples to make their positions come alive. Finally, good persuaders have the ability to accurately sense and respond to their audience’s emotional state. Sometimes, that means they have to suppress their own emotions; at other times, they must intensify them. Persuasion can be a force for enormous good in an organization, but people must understand it for what it is: an often painstaking process that requires insight, planning, and compromise.
At the end of a thoughtful article on the future of nuclear war, Wiesner and York (1) concluded that: “Both sides in the arms race are …confronted by the dilemma of steadily increasing military power and steadily decreasing national security. It is our considered professional judgment that this dilemma has no technical solution. If the great powers continue to look for solutions in the area of science and technology only, the result will be to worsen the situation.”
I would like to focus your attention not on the subject of the article (national security in a nuclear world) but on the kind of conclusion they reached, namely that there is no technical solution to the problem. An implicit and almost universal assumption of discussions published in professional and semipopular scientific journals is that the problem under discussion has a technical solution. A technical solution may be defined as one that requires a change only in the techniques of the natural sciences, demanding little or nothing in the way of change in human values or ideas of morality. In our day (though not in earlier times) technical solutions are always welcome. Because of previous failures in prophecy, it takes courage to assert that a desired technical solution is not possible. Wiesner and York exhibited this courage; publishing in a science journal, they insisted that the solution to the problem was not to be found in the natural sciences. They cautiously qualified their statement with the phrase, “It is our considered professional judgment… .” Whether they were right or not is not the concern of the present article. Rather, the concern here is with the important concept of a class of human problems which can be called “no technical solution problems,” and, more specifically, with the identification and discussion of one of these.
It is easy to show that the class is not a null class. Recall the game of tick-tack-toe. Consider the problem, “How can I win the game of tick-tack-toe?” It is well known that I cannot, if I assume (in keeping with the conventions of game theory) that my opponent understands the game perfectly. Put another way, there is no “technical solution” to the problem. I can win only by giving a radical meaning to the word “win.” I can hit my opponent over the head, or I can drug him; or I can falsify the records. Every way in which I “win” involves, in some sense, an abandonment of the game, as we intuitively understand it. (I can also, of course, openly abandon the game–refuse to play it. This is what most adults do.) The class of “No technical solution problems” has members. My thesis is that the “population problem,” as conventionally conceived, is a member of this class. How it is conventionally conceived needs some comment. It is fair to say that most people who anguish over the population problem are trying to find a way to avoid the evils of overpopulation without relinquishing any of the privileges they now enjoy. They think that farming the seas or developing new strains of wheat will solve the problem–technologically. I try to show here that the solution they seek cannot be found. The population problem cannot be solved in a technical way, any more than can the problem of winning the game of tick-tack-toe.
What Shall We Maximize?
Population, as Malthus said, naturally tends to grow “geometrically,” or, as we would now say, exponentially. In a finite world this means that the per capita share of the world’s goods must steadily decrease. Is ours a finite world?
A fair defense can be put forward for the view that the world is infinite; or that we do not know that it is not. But, in terms of the practical problems that we must face in the next few generations with the foreseeable technology, it is clear that we will greatly increase human misery if we do not, during the immediate future, assume that the world available to the terrestrial human population is finite. “Space” is no escape (2).A finite world can support only a finite population; therefore, population growth must eventually equal zero. (The case of perpetual wide fluctuations above and below zero is a trivial variant that need not be discussed.) When this condition is met, what will be the situation of mankind? Specifically, can Bentham’s goal of “the greatest good for the greatest number” be realized? No–for two reasons, each sufficient by itself. The first is a theoretical one. It is not mathematically possible to maximize for two (or more) variables at the same time. This was clearly stated by von Neumann and Morgenstern (3), but the principle is implicit in the theory of partial differential equations, dating back at least to D’Alembert (1717-1783).
The second reason springs directly from biological facts. To live, any organism must have a source of energy (for example, food). This energy is utilized for two purposes: mere maintenance and work. For man, maintenance of life requires about 1600 kilocalories a day (“maintenance calories”). Anything that he does over and above merely staying alive will be defined as work, and is supported by “work calories” which he takes in. Work calories are used not only for what we call work in common speech; they are also required for all forms of enjoyment, from swimming and automobile racing to playing music and writing poetry. If our goal is to maximize population it is obvious what we must do: We must make the work calories per person approach as close to zero as possible. No gourmet meals, no vacations, no sports, no music, no literature, no art. … I think that everyone will grant, without argument or proof, that maximizing population does not maximize goods. Bentham’s goal is impossible.
In reaching this conclusion I have made the usual assumption that it is the acquisition of energy that is the problem. The appearance of atomic energy has led some to question this assumption. However, given an infinite source of energy, population growth still produces an inescapable problem. The problem of the acquisition of energy is replaced by the problem of its dissipation, as J. H. Fremlin has so wittily shown (4). The arithmetic signs in the analysis are, as it were, reversed; but Bentham’s goal is still unobtainable. The optimum population is, then, less than the maximum. The difficulty of defining the optimum is enormous; so far as I know, no one has seriously tackled this problem. Reaching an acceptable and stable solution will surely require more than one generation of hard analytical work–and much persuasion. We want the maximum good per person; but what is good? To one person it is wilderness, to another, it is ski lodges for thousands. To one it is estuaries to nourish ducks for hunters to shoot; to another it is factory land. Comparing one good with another is, we usually say, impossible because goods are incommensurable. Incommensurables cannot be compared. Theoretically this may be true; but in real life incommensurables are commensurable. Only a criterion of judgment and a system of weighting are needed. In nature the criterion is survival. Is it better for a species to be small and hideable, or large and powerful? Natural selection commensurates the incommensurables. The compromise achieved depends on a natural weighting of the values of the variables.
Man must imitate this process. There is no doubt that in fact he already does, but unconsciously. It is when the hidden decisions are made explicit that the arguments begin. The problem for the years ahead is to work out an acceptable theory of weighting. Synergistic effects, nonlinear variation, and difficulties in discounting the future make the intellectual problem difficult, but not (in principle) insoluble. Has any cultural group solved this practical problem at the present time, even on an intuitive level? One simple fact proves that none has: there is no prosperous population in the world today that has, and has had for some time, a growth rate of zero. Any people that has intuitively identified its optimum point will soon reach it, after which its growth rate becomes and remains zero. Of course, a positive growth rate might be taken as evidence that a population is below its optimum. However, by any reasonable standards, the most rapidly growing populations on earth today are (in general) the most miserable. This association (which need not be invariable) casts doubt on the optimistic assumption that the positive growth rate of a population is evidence that it has yet to reach its optimum.
We can make little progress in working toward optimum population size until we explicitly exorcize the spirit of Adam Smith in the field of practical demography. In economic affairs, The Wealth of Nations (1776) popularized the “invisible hand,” the idea that an individual who “intends only his own gain,” is, as it were, “led by an invisible hand to promote . . . the public interest” (5). Adam Smith did not assert that this was invariably true, and perhaps neither did any of his followers. But he contributed to a dominant tendency of thought that has ever since interfered with positive action based on rational analysis, namely, the tendency to assume that decisions reached individually will, in fact, be the best decisions for an entire society. If this assumption is correct it justifies the continuance of our present policy of laissez-faire in reproduction. If it is correct we can assume that men will control their individual fecundity so as to produce the optimum population. If the assumption is not correct, we need to reexamine our individual freedoms to see which ones are defensible.
Tragedy of Freedom in a Commons
The rebuttal to the invisible hand in population control is to be found in a scenario first sketched in a little-known pamphlet (6) in 1833 by a mathematical amateur named William Forster Lloyd (1794-1852). We may well call it “the tragedy of the commons,” using the word “tragedy” as the philosopher Whitehead used it (7): “The essence of dramatic tragedy is not unhappiness. It resides in the solemnity of the remorseless working of things.” He then goes on to say, “This inevitableness of destiny can only be illustrated in terms of human life by incidents which in fact involve unhappiness. For it is only by them that the futility of escape can be made evident in the drama.” The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be expected that each herdsman will try to keep as many cattle as possible on the commons. Such an arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land. Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of social stability becomes a reality. At this point, the inherent logic of the commons remorselessly generates tragedy.
As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, “What is the utility to me of adding one more animal to my herd?” This utility has one negative and one positive component.
1) The positive component is a function of the increment of one animal. Since the herdsman receives all the proceeds from the sale of the additional animal, the positive utility is nearly +1.
2) The negative component is a function of the additional overgrazing created by one more animal. Since, however, the effects of overgrazing are shared by all the herdsmen, the negative utility for any particular decision-making herdsman is only a fraction of –1.
Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another; and another… But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit–in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all. Some would say that this is a platitude. Would that it were! In a sense, it was learned thousands of years ago, but natural selection favors the forces of psychological denial (8). The individual benefits as an individual from his ability to deny the truth even though society as a whole, of which he is a part, suffers.
Education can counteract the natural tendency to do the wrong thing, but the inexorable succession of generations requires that the basis for this knowledge be constantly refreshed. A simple incident that occurred a few years ago in Leominster, Massachusetts, shows how perishable the knowledge is. During the Christmas shopping season the parking meters downtown were covered with plastic bags that bore tags reading: “Do not open until after Christmas. Free parking courtesy of the mayor and city council.” In other words, facing the prospect of an increased demand for already scarce space. the city fathers reinstituted the system of the commons. (Cynically, we suspect that they gained more votes than they lost by this retrogressive act.)
In an approximate way, the logic of the commons has been understood for a long time, perhaps since the discovery of agriculture or the invention of private property in real estate. But it is understood mostly only in special cases which are not sufficiently generalized. Even at this late date, cattlemen leasing national land on the western ranges demonstrate no more than an ambivalent understanding, in constantly pressuring federal authorities to increase the headcount to the point where overgrazing produces erosion and weed-dominance. Likewise, the oceans of the world continue to suffer from the survival of the philosophy of the commons. Maritime nations still respond automatically to the shibboleth of the “freedom of the seas.” Professing to believe in the “inexhaustible resources of the oceans,” they bring species after species of fish and whales closer to extinction (9).
The National Parks present another instance of the working out of the tragedy of the commons. At present, they are open to all, without limit. The parks themselves are limited in extent–there is only one Yosemite Valley–whereas population seems to grow without limit. The values that visitors seek in the parks are steadily eroded. Plainly, we must soon cease to treat the parks as commons or they will be of no value to anyone. hat shall we do? We have several options. We might sell them off as private property. We might keep them as public property, but allocate the right to enter them. The allocation might be on the basis of wealth, by the use of an auction system. It might be on the basis of merit, as defined by some agreed-upon standards. It might be by lottery. Or it might be on a first-come, first-served basis, administered to long queues. These, I think, are all the reasonable possibilities. They are all objectionable. But we must choose–or acquiesce in the destruction of the commons that we call our National Parks.
In a reverse way, the tragedy of the commons reappears in problems of pollution. Here it is not a question of taking something out of the commons, but of putting something in–sewage, or chemical, radioactive, and heat wastes into water; noxious and dangerous fumes into the air, and distracting and unpleasant advertising signs into the line of sight. The calculations of utility are much the same as before. The rational man finds that his share of the cost of the wastes he discharges into the commons is less than the cost of purifying his wastes before releasing them. Since this is true for everyone, we are locked into a system of “fouling our own nest,” so long as we behave only as independent, rational, free-enterprisers.
The tragedy of the commons as a food basket is averted by private property, or something formally like it. But the air and waters surrounding us cannot readily be fenced, and so the tragedy of the commons as a cesspool must be prevented by different means, by coercive laws or taxing devices that make it cheaper for the polluter to treat his pollutants than to discharge them untreated. We have not progressed as far with the solution of this problem as we have with the first. Indeed, our particular concept of private property, which deters us from exhausting the positive resources of the earth, favors pollution. The owner of a factory on the bank of a stream–whose property extends to the middle of the stream, often has difficulty seeing why it is not his natural right to muddy the waters flowing past his door. The law, always behind the times, requires elaborate stitching and fitting to adapt it to this newly perceived aspect of the commons.
The pollution problem is a consequence of population. It did not much matter how a lonely American frontiersman disposed of his waste. “Flowing water purifies itself every 10 miles,” my grandfather used to say, and the myth was near enough to the truth when he was a boy, for there were not too many people. But as the population became denser, the natural chemical and biological recycling processes became overloaded, calling for a redefinition of property rights.
How To Legislate Temperance?
Analysis of the pollution problem as a function of population density uncovers a not generally recognized principle of morality, namely: the morality of an act is a function of the state of the system at the time it is performed (10). Using the commons as a cesspool does not harm the general public under frontier conditions because there is no public, the same behavior in a metropolis is unbearable. A hundred and fifty years ago a plainsman could kill an American bison, cut out only the tongue for his dinner, and discard the rest of the animal. He was not in any important sense being wasteful. Today, with only a few thousand bison left, we would be appalled at such behavior.
In passing, it is worth noting that the morality of an act cannot be determined from a photograph. One does not know whether a man killing an elephant or setting fire to the grassland is harming others until one knows the total system in which his act appears. “One picture is worth a thousand words,” said an ancient Chinese; but it may take 10,000 words to validate it. It is as tempting to ecologists as it is to reformers, in general, to try to persuade others by way of the photographic shortcut. But the essence of an argument cannot be photographed: it must be presented rationally–in words.
That morality has system-sensitive escaped the attention of most codifiers of ethics in the past. “Thou shalt not . . .” is the form of traditional ethical directives which make no allowance for particular circumstances. The laws of our society follow the pattern of ancient ethics and therefore are poorly suited to governing a complex, crowded, changeable world. Our epicyclic solution is to augment statutory law with administrative law. Since it is practically impossible to spell out all the conditions under which it is safe to burn trash in the backyard or to run an automobile without smog-control, by law we delegate the details to bureaus. The result is administrative law, which is rightly feared for an ancient reason–Quis custodiet ipsos custodes?–“Who shall watch the watchers themselves?” John Adams said that we must have “a government of laws and not men.” Bureau administrators, trying to evaluate the morality of acts in the total system, are singularly liable to corruption, producing a government by men, not laws.
Prohibition is easy to legislate (though not necessarily to enforce); but how do we legislate temperance? Experience indicates that it can be accomplished best through the mediation of administrative law. We limit possibilities unnecessarily if we suppose that the sentiment of Quis custodiet denies us the use of the administrative law. We should rather retain the phrase as a perpetual reminder of fearful dangers we cannot avoid. The great challenge facing us now is to invent the corrective feedbacks that are needed to keep custodians honest. We must find ways to legitimate the needed authority of both the custodians and the corrective feedbacks.
Freedom To Breed Is Intolerable
The tragedy of the commons is involved in population problems in another way. In a world governed solely by the principle of “dog eat dog”–if indeed there ever was such a world–how many children a family had would not be a matter of public concern. Parents who bred too exuberantly would leave fewer descendants, not more, because they would be unable to care adequately for their children. David Lack and others have found that such a negative feedback demonstrably controls the fecundity of birds (11). But men are not birds, and have not acted like them for millenniums, at least.
If each human family were dependent only on its own resources; if the children of improvident parents starved to death; if, thus, overbreeding brought its own “punishment” to the germ line–then there would be no public interest in controlling the breeding of families. But our society is deeply committed to the welfare state (12), and hence is confronted with another aspect of the tragedy of the commons.
In a welfare state, how shall we deal with the family, the religion, the race, or the class (or indeed any distinguishable and cohesive group) that adopts overbreeding as a policy to secure its own aggrandizement (13)? To couple, the concept of freedom to breed with the belief that everyone born has an equal right to the commons is to lock the world into a tragic course of action.
Unfortunately, this is just the course of action that is being pursued by the United Nations. In late 1967, some 30 nations agreed to the following (14):
The Universal Declaration of Human Rights describes the family as the natural and fundamental unit of society. It follows that any choice and decision with regard to the size of the family must irrevocably rest with the family itself, and cannot be made by anyone else.
It is painful to have to deny categorically the validity of this right; denying it, one feels as uncomfortable as a resident of Salem, Massachusetts, who denied the reality of witches in the 17th century. At the present time, in liberal quarters, something like a taboo acts to inhibit criticism of the United Nations. There is a feeling that the United Nations is “our last and best hope,” that we shouldn’t find fault with it; we shouldn’t play into the hands of the arch-conservatives. However, let us not forget what Robert Louis Stevenson said: “The truth that is suppressed by friends is the readiest weapon of the enemy.” If we love the truth we must openly deny the validity of the Universal Declaration of Human Rights, even though it is promoted by the United Nations. We should also join with Kingsley Davis (15) in attempting to get Planned Parenthood-World Population to see the error of its ways in embracing the same tragic ideal.
Conscience Is Self-Eliminating
It is a mistake to think that we can control the breeding of mankind in the long run by an appeal to conscience. Charles Galton Darwin made this point when he spoke on the centennial of the publication of his grandfather’s great book. The argument is straightforward and Darwinian.
People vary. Confronted with appeals to limit breeding, some people will undoubtedly respond to the plea more than others. Those who have more children will produce a larger fraction of the next generation than those with more susceptible consciences. The difference will be accentuated, generation by generation.
In C. G. Darwin’s words: “It may well be that it would take hundreds of generations for the progenitive instinct to develop in this way, but if it should do so, nature would have taken her revenge, and the variety Homo contracipiens would become extinct and would be replaced by the variety Homo progenitivus” (16).
The argument assumes that conscience or the desire for children (no matter which) is hereditary–but hereditary only in the most general formal sense. The result will be the same whether the attitude is transmitted through germ cells, or exosomatically, to use A. J. Lotka’s term. (If one denies the latter possibility as well as the former, then what’s the point of education?) The argument has here been stated in the context of the population problem, but it applies equally well to any instance in which society appeals to an individual exploiting a commons to restrain himself for the general good–by means of his conscience. To make such an appeal is to set up a selective system that works toward the elimination of conscience from the race.
Pathogenic Effects of Conscience
The long-term disadvantage of an appeal to conscience should be enough to condemn it; but has serious short-term disadvantages as well. If we ask a man who is exploiting a commons to desist “in the name of conscience,” what are we saying to him? What does he hear? –not only at the moment but also in the wee small hours of the night when, half asleep, he remembers not merely the words we used but also the nonverbal communication cues we gave him unawares? Sooner or later, consciously or subconsciously, he senses that he has received two communications, and that they are contradictory: (i) (intended communication) “If you don’t do as we ask, we will openly condemn you for not acting like a responsible citizen”; (ii) (the unintended communication) “If you do behave as we ask, we will secretly condemn you for a simpleton who can be shamed into standing aside while the rest of us exploit the commons.”
Everyman then is caught in what Bateson has called a “double bind.” Bateson and his co-workers have made a plausible case for viewing the double bind as an important causative factor in the genesis of schizophrenia (17). The double bind may not always be so damaging, but it always endangers the mental health of anyone to whom it is applied. “A bad conscience,” said Nietzsche, “is a kind of illness.”
To conjure up a conscience in others is tempting to anyone who wishes to extend his control beyond the legal limits. Leaders at the highest level succumb to this temptation. Has any President during the past generation failed to call on labor unions to moderate voluntarily their demands for higher wages, or to steel companies to honor voluntary guidelines on prices? I can recall none. The rhetoric used on such occasions is designed to produce feelings of guilt in noncooperators. For centuries it was assumed without proof that guilt was a valuable, perhaps even an indispensable, ingredient of the civilized life. Now, in this post-Freudian world, we doubt it. Paul Goodman speaks from the modern point of view when he says: “No good has ever come from feeling guilty, neither intelligence, policy, nor compassion. The guilty do not pay attention to the object but only to themselves, and not even to their own interests, which might make sense, but to their anxieties” (18).
One does not have to be a professional psychiatrist to see the consequences of anxiety. We in the Western world are just emerging from a dreadful two-centuries-long Dark Ages of Eros that was sustained partly by prohibition laws, but perhaps more effectively by the anxiety-generating mechanism of education. Alex Comfort has told the story well in The Anxiety Makers (19); it is not a pretty one. Since proof is difficult, we may even concede that the results of anxiety may sometimes, from certain points of view, be desirable. The larger question we should ask is whether, as a matter of policy, we should ever encourage the use of a technique the tendency (if not the intention) of which is psychologically pathogenic. We hear much talk these days of responsible parenthood; the coupled words are incorporated into the titles of some organizations devoted to birth control. Some people have proposed massive propaganda campaigns to instill responsibility into the nation’s (or the world’s) breeders. But what is the meaning of the word responsibility in this context? Is it not merely a synonym for the word conscience? When we use the word responsibility in the absence of substantial sanctions are we not trying to browbeat a free man in a commons into acting against his own interest? Responsibility is a verbal counterfeit for a substantial quid pro quo. It is an attempt to get something for nothing.
If the word responsibility is to be used at all, I suggest that it be in the sense Charles Frankel uses it (20). “Responsibility,” says this philosopher, “is the product of definite social arrangements.” Notice that Frankel calls for social arrangements–not propaganda.
Mutual Coercion Mutually Agreed upon
The social arrangements that produce responsibility are arrangements that create coercion, of some sort. Consider bank-robbing. The man who takes money from a bank acts as if the bank were a commons. How do we prevent such action? Certainly not by trying to control his behavior solely by a verbal appeal to his sense of responsibility. Rather than rely on propaganda we follow Frankel’s lead and insist that a bank is not a commons; we seek the definite social arrangements that will keep it from becoming a commons. That we thereby infringe on the freedom of would-be robbers we neither deny nor regret.
The morality of bank-robbing is particularly easy to understand because we accept complete prohibition of this activity. We are willing to say “Thou shalt not rob banks,” without providing for exceptions. But temperance also can be created by coercion. Taxing is a good coercive device. To keep downtown shoppers temperate in their use of parking space we introduce parking meters for short periods, and traffic fines for longer ones. We need not actually forbid a citizen to park as long as he wants to; we need merely make it increasingly expensive for him to do so. Not prohibition, but carefully biased options are what we offer him. A Madison Avenue man might call this persuasion; I prefer the greater candor of the word coercion.
Coercion is a dirty word to most liberals now, but it need not forever be so. As with the four-letter words, its dirtiness can be cleansed away by exposure to the light, by saying it over and over without apology or embarrassment. To many, the word coercion implies arbitrary decisions of distant and irresponsible bureaucrats; but this is not a necessary part of its meaning. The only kind of coercion I recommend is mutual coercion, mutually agreed upon by the majority of the people affected.
To say that we mutually agree to coercion is not to say that we are required to enjoy it, or even to pretend we enjoy it. Who enjoys taxes? We all grumble about them. But we accept compulsory taxes because we recognize that voluntary taxes would favor the conscienceless. We institute and (grumblingly) support taxes and other coercive devices to escape the horror of the commons. An alternative to the commons need not be perfectly just to be preferable. With real estate and other material goods, the alternative we have chosen is the institution of private property coupled with legal inheritance. Is this system perfectly just? As a genetically trained biologist I deny that it is. It seems to me that, if there are to be differences in individual inheritance, legal possession should be perfectly correlated with biological inheritance–that those who are biologically more fit to be the custodians of property and power should legally inherit more. But genetic recombination continually makes a mockery of the doctrine of “like father, like son” implicit in our laws of legal inheritance. An idiot can inherit millions, and a trust fund can keep his estate intact. We must admit that our legal system of private property plus inheritance is unjust–but we put up with it because we are not convinced, at the moment, that anyone has invented a better system. The alternative of the commons is too horrifying to contemplate. Injustice is preferable to total ruin.
It is one of the peculiarities of the warfare between reform and the status quo that it is thoughtlessly governed by a double standard. Whenever a reform measure is proposed it is often defeated when its opponents triumphantly discover a flaw in it. As Kingsley Davis has pointed out (21), worshippers of the status quo sometimes imply that no reform is possible without unanimous agreement, an implication contrary to historical fact. As nearly as I can make out, automatic rejection of proposed reforms is based on one of two unconscious assumptions: (i) that the status quo is perfect; or (ii) that the choice we face is between reform and no action; if the proposed reform is imperfect, we presumably should take no action at all, while we wait for a perfect proposal. But we can never do anything. That which we have done for thousands of years is also action. It also produces evils. Once we are aware that the status quo is action, we can then compare its discoverable advantages and disadvantages with the predicted advantages and disadvantages of the proposed reform, discounting as best we can for our lack of experience. On the basis of such a comparison, we can make a rational decision which will not involve the unworkable assumption that only perfect systems are tolerable.
Recognition of Necessity
Perhaps the simplest summary of this analysis of man’s population problems is this: the commons, if justifiable at all, is justifiable only under conditions of low-population density. As the human population has increased, the commons has had to be abandoned in one aspect after another.
First, we abandoned the commons in food gathering, enclosing farmland and restricting pastures and hunting and fishing areas. These restrictions are still not complete throughout the world.
Somewhat later we saw that the commons as a place for waste disposal would also have to be abandoned. Restrictions on the disposal of domestic sewage are widely accepted in the Western world; we are still struggling to close the commons to pollution by automobiles, factories, insecticide sprayers, fertilizing operations, and atomic energy installations.
In a still more embryonic state is our recognition of the evils of the commons in matters of pleasure. There is almost no restriction on the propagation of sound waves in the public medium. The shopping public is assaulted with mindless music, without its consent. Our government is paying out billions of dollars to create supersonic transport which will disturb 50,000 people for every one person who is whisked from coast to coast 3 hours faster. Advertisers muddy the airwaves of radio and television and pollute the view of travelers. We are a long way from outlawing the commons in matters of pleasure. Is this because our Puritan inheritance makes us view pleasure as something of a sin, and pain (that is, the pollution of advertising) as the sign of virtue?
Every new enclosure of the commons involves the infringement of somebody’s personal liberty. Infringements made in the distant past are accepted because no contemporary complains of a loss. It is the newly proposed infringements that we vigorously oppose; cries of “rights” and “freedom” fill the air. But what does “freedom” mean? When men mutually agreed to pass laws against robbing, mankind became more free, not less so. Individuals locked into the logic of the commons are free only to bring on universal ruin; once they see the necessity of mutual coercion, they become free to pursue other goals. I believe it was Hegel who said, “Freedom is the recognition of necessity.”
The most important aspect of necessity that we must now recognize, is the necessity of abandoning the commons in breeding. No technical solution can rescue us from the misery of overpopulation. Freedom to breed will bring ruin to all. At the moment, to avoid hard decisions many of us are tempted to propagandize for conscience and responsible parenthood. The temptation must be resisted because an appeal to independently acting consciences selects for the disappearance of all conscience in the long run and an increase in anxiety in the short.
The only way we can preserve and nurture other and more precious freedoms is by relinquishing the freedom to breed, and that very soon. “Freedom is the recognition of necessity”–and it is the role of education to reveal to all the necessity of abandoning the freedom to breed. Only so, can we put an end to this aspect of the tragedy of the commons.
Posted at: http://science.com/tragedy of the commons by Garrett Hardin
There has been speculation for many years about Salesforce introducing its own call center. The argument is that Salesforce drove the conversion of CRM to a cloud-delivered service and, now that call centers have also crossed the cloud chasm, it’s a logical expansion path for Salesforce. But there’s more here than just seeing two pieces of enterprise IT that have both “SaaS-ified”. After all, many other IT functions have followed that same path. There’s a special relationship between Call center and CRM. The former relies heavily on the latter and the two are getting deeper intertwined. In fact, some people have come to view the call center as simply one of many “front-ends” to CRM. CRM is eating the call center. (Hmmm, sounds like a good blog post title… )
The little-noticed announcement of “Lightning Voice” from Salesforce earlier this month gives another clue towards their strategy. More importantly, it reminds us that Salesforce already has many fingers in the call center pie.
Lightning Voice is CRM-Triggered Outbound Dialing
According to Salesforce Lightning Voice “will empower reps to connect with prospects faster with click-to-call, auto-logging of calls, and call forwarding to take calls from anywhere.” Sound familiar? It’s basically the pitch that is the core of many “sales enablement” companies like Inside Sales, Sales Loft, Velocify and Frontspin. Most of these products are tightly integrated with Salesforce since that’s what their customers use for CRM. So Lightning Voice is not just another competitor, it’s a competitor with a big advantage. (Also worth noting that Salesforce is a major investor in InsideSales.)
There is definitely a danger of stepping on partnership toes. In fact, that’s the dominant thought in two pieces covering Lightning by Lauren Horwitz of TechTarget.
1. In Salesforce Lightning platform plans, availability revealed, the subhead is “…it may encroach on Salesforce’s partner ecosystem.”
2. And in Salesforce Lightning upgrade may create winners and losers, Lauren writes:
Recent upgrades to Salesforce Lightning may benefit customers who can now build new apps — but how will it affect partners who have apps that tackle the same problems? I think Salesforce’s maneuvering around the different pieces of the call center puzzle is not accidental at all.
But No Inbound: Is it a Third Rail or Phase 2?
Note what was not in the announcement: inbound. Handling inbound calls is still the crown jewel of the call center vendors. Outbound has long been seen as a low-value feature that lots of players could peel away from the core call center offering. Inbound is what drives the sale of multi-million dollar call center systems.
Perhaps Salesforce is stopping short of offering inbound voice features out of deference to the many call center partners it has. Companies like InContact, LiveOps and Transera have invested heavily in Salesforce integration. It’s a partnership that works well: Agents sit in front of Salesforce-based consoles with the “screen-pops” driven by the inbound calls. Both the call center vendor and Salesforce get to sell a seat license per agent. Also on that list is TalkDesk, the superstar newcomer that has conquered the low-end of the market with a largely self-serve model (“Create a Call Center in 5 Minutes”). Salesforce was a major participant in TalkDesk’s recent $21M round of funding. Another reason to avoid inbound is that it is more demanding to deliver. Inbound is mission critical for most companies. If your call center can’t accept calls, you could be losing sales or even customers every minute. If you can’t make outbound calls, consequences are less dire.
What’s Under the Hood?
As reported by Re/code’s Arik Hesseldahl, Lightning Voice is powered by Twilio. Guess who is a major investor in Twilio? Yep, Salesforce. And guess what powers Talkdesk? Twilio. What to make of all this? Perhaps Salesforce is watching TalkDesk to see if a Twilio-powered call center can really scale up. If it does, Lightning Voice could expand into inbound functionality and – boom – every call center vendor is under major threat: Avaya, Cisco, Genesys, Aspect, Five9, InContact, Interactive Intelligence. (Their combined call center revenues add up to around $4B annually.) When companies deploy a new call center, a big part of the process is CTI integration – getting the call center software and CRM software to work together so that the agent’s get the right info. For many VARs, this is what pays the bills. As Paul Fischer points out this could all get streamlined with Lightning Voice. So there’s another constituency that is threatened.
The Power of a Platform
Companies like TalkDesk and NewVoiceMedia have built call center businesses on top of Twilio, which has allowed them to grow very quickly. They bypassed the years and millions of dollars that the previous generation of companies had to invest in building all the core technology of a call center. But that’s a double-edged sword. If they can do it, so can others. And no one is better positioned to do that than Salesforce. The big takeaway here is the power of a platform and API for voice. No matter what happens, Twilio is the big winner. This is why Cisco bought Tropo (formerly part of Voxeo), and it’s why Avaya is placing such a big emphasis on their new Engagement Development Platform (EDP).
Posted at http://fonolo.com/blog/salesforce by SHAI
The Oklahoma City bombing was a domestic terrorist truck bombing on the Alfred P. Murrah Federal Building in downtown Oklahoma City, Oklahoma, the United States on April 19, 1995. Perpetrated by Timothy McVeigh and Terry Nichols, the bombing killed 168 people, injured more than 680 others, and destroyed one-third of the building. The blast destroyed or damaged 324 other buildings within a 16-block radius, shattered glass in 258 nearby buildings, and destroyed or burned 86 cars, causing an estimated $652 million worth of damage. Extensive rescue efforts were undertaken by local, state, federal, and worldwide agencies in the wake of the bombing, and substantial donations were received from across the country. The Federal Emergency Management Agency (FEMA) activated eleven of its Urban Search and Rescue Task Forces, consisting of 665 rescue workers who assisted in rescue and recovery operations. The Oklahoma City bombing was the deadliest terrorist attack on American soil until the September 11 attacks six years later, and it still remains the deadliest incident of domestic terrorism in United States history.
Within 90 minutes of the explosion, McVeigh was stopped by Oklahoma Highway Patrolman Charlie Hanger for driving without a license plate and arrested for illegal weapons possession. Forensic evidence quickly linked McVeigh and Nichols to the attack; Nichols was arrested, and within days, both were charged. Michael and Lori Fortier were later identified as accomplices. McVeigh, a veteran of the Gulf War and a U.S. militia movement sympathizer, had detonated a Ryder rental truck full of explosives parked in front of the building. His co-conspirator, Nichols, had assisted with the bomb’s preparation. Motivated by his dislike for the U.S. federal government and angry about its handling of the Ruby Ridge incident in 1992 and the Waco siege in 1993, McVeigh timed his attack to coincide with the second anniversary of the deadly fire that ended the siege at the Branch Davidian compound in Waco, Texas.
The official investigation, known as “OKBOMB”, saw FBI agents conduct 28,000 interviews, amass 3.5 short tons (3,200 kg) of evidence, and collect nearly one billion pieces of information. The bombers were tried and convicted in 1997. McVeigh was executed by lethal injection on June 11, 2001, and Nichols was sentenced to life in prison in 2004. Michael and Lori Fortier testified against McVeigh and Nichols; Michael was sentenced to 12 years in prison for failing to warn the United States government, and Lori received immunity from prosecution in exchange for her testimony.
As a result of the bombing, the U.S. Congress passed the Antiterrorism and Effective Death Penalty Act of 1996, which tightened the standards for habeas corpus in the United States, as well as legislation designed to increase the protection around federal buildings to deter future terrorist attacks. On April 19, 2000, the Oklahoma City National Memorial was dedicated on the site of the Murrah Federal Building, commemorating the victims of the bombing. Annual remembrance services are held at the same time of day as the explosion occurred.
As a little boy, I loved pirates. We often lived near the ocean and I had a number of pirate books, which I still have, that sparked my imagination. I was smitten by Disney’s Peter Pan and enjoyed recently the pure entertainment of the Pirates of the Caribbean series. But, honestly, I never thought I could learn a lesson or two about leadership and management from these lawless reprobates.
17th Century Sea Bandits. Peter Leeson in his wonderful paper An-arrgh-chy: The Law and Economics of Pirate Organization teach us how 17th-century pirates, or sea bandits as they were called in the day, managed their ships. It helps to remember that the only way we communicated and traded with the rest of the world in those days was by ship. Most of the ships on the seas were merchant, explorer, naval, pirate, or privateer ships. And with the exception of some explorer ships, only the pirate ship was managed in a cooperative way that benefited the whole crew. Most merchant ships were ruled by captains, whose primary job was to maximize the profit for the absentee ship owners, like some businesses today. These captains were usually incented to maximize profit and, therefore, sometimes abused and cheated their crews.
Pirate Ship Industry. The golden age of piracy started in the late 1600’s and peaked between 1716 and 1722 when pirates really ruled the seas and maritime Admiralty Laws rarely controlled them. Leeson reports that 60 percent of the pirates were born in either England or America and 20 percent in the West Indies. Some pirates came from jobs on merchant ships where they had been abused by their captains. The actual number of pirates in the industry is hard to measure, but some “expeditions” had as many as 2,000 pirates, so they were a force to be reckoned with. The average ship crew size was between 80 and 120 and Blackbeard’s crew on Queen Anne’s Revenge had 300. Pirates like Bartholomew had a squadron of 4 ships with 500 men. Arguably the largest pirate organization was Captain Morgan, who commanded 37 ships and 2,000 men at his peak. He terrorized the Spanish Main, which was all the land surrounding the Caribbean Sea and the Gulf of Mexico. Recently, five of Captain Morgan’s ships were discovered on a reef off the coast of Panama. Against these kinds of ships and hoodlums, I can’t imagine how a merchant ship with only about 13-17 crew members or a small Royal Navy ship with a crew of 150 had much chance.
The Pirate Management Structure – Quartermasters and Captains. Had you asked me before I read Leeson’s article how I thought pirate ships were organized, I would have thought they were led by tough, mean captains who drove their crews hard with an autocratic and cruel hand. While I’m sure that did happen, we now know those captains didn’t last long – their crews captured and sometimes killed them. At the very least the captain was beaten and set adrift with his supporters in a small boat, often never seen again. Since pirates captured their ships, they owned them. There were no absentee-owners to satisfy. They were, as one historian described them, a “sea-going stock company.” And captains had to align their leadership with the crew’s goals, or they would be replaced. What evolved in successful pirate enterprises was a management structure with two leaders – the captain and the quartermaster, both elected by the crews
The Quartermaster. Quartermasters were the leaders the Pirates “trusted” most. This was the position that was really in charge whenever the ships weren’t in battle. Quartermasters fairly allocated provisions, selected (no room for all the loot) and distributed the loot, settled/adjudicated crew member disputes, and administered punishments. According to written records noted in Leeson’s article, “the Captain can undertake nothing which the Quarter-Master does not approve…he speaks for, and looks after the Interest of the Crew.
The Captain. Captains were responsible for planning and executing attacks on merchant ships and other battles. They were usually paid more than the crew, but often slept in the same areas as the crew and had the same provisions assigned to them.
The Constitution or Articles of Agreement. To control quartermasters, captains, and all crew behavior, pirates often had constitutions or “articles of agreement”. In addition to behavioral restrictions (no fighting, women, or gambling on board the ship) these agreements also described how booty would be shared and reinforced the pirate’s mantra of “no prey, no pay.”
Booty Splits. All captured booty was collected by the quartermaster and no crew members could keep anything for themselves or they faced brutal punishments. Injured crew members received generous payments before any booty was split, this was the workers’ compensation of the pirate era. A few key skill positions – advance scouts, carpenters, surgeons, captains, quartermasters – received payments and shares greater than the other crew members. Otherwise, all the booty was split evenly as prescribed in the Articles of Agreement.
How much did a pirate make? In one 1696 example, Henry Every’s pirates captured a fleet carrying a value of 600,000 pounds sterling in precious metals. Each pirate on this crew collected a share of 1,000 pounds, equivalent to more than 40 years of earnings for a merchant seaman who earned on average 12 pounds sterling per year. So, if you can live with the brutality of being a pirate – you had to rob, murder, and torture innocent sailors – as well as face certain hanging if caught, then a pirate’s life was definitely lucrative.
The Leadership and Management Lessons. I don’t mean to put pirates up on a pedestal, they were (and are) bad guys. However, I did take away three leadership/management lessons from reading this piece that provides the building blocks for any successful organization.
- Pirates understood they needed men with different talents to fulfill two, significant leadership roles – the captain and the quartermaster. One role was needed to make money and the other to manage the business. They knew the captain would be doing what Hayagreeva Rao refers to as “star tasks” and the quartermaster would be doing “guardian tasks.” Star tasks include strategic work like target identification, commanding during battle, and negotiating agreements with other pirates to form alliances or fix jurisdictions. Guardian tasks are more operational and include allocating arms, scheduling work routines, managing internal conflicts and administering discipline, distributing loot, and taking care of the injured.
- The pirates knew they needed a control system to assure success and protect themselves from themselves. Perhaps there can be honor among thieves if they agree to a code of operation.
- Common mission and goals will hold a group together as long as the system that supports them are fair.
This shows us how almost any group can build a successful organization if they figure out how to position these three building blocks. While it is sad today to see terrorists trying to build this same kind of organizations, it is encouraging to see that when all civilized nations work together we can splinter and collapse them – just like nations did to the pirates in the 18th century.
http://managementtechniquesfrom17th century pirates by Steve Wood (Steve Wood)
On October 3, 2009, according to a report published by U.S. Army historian Richard S. Lowry, Taliban fighters launched a coordinated attack on the outpost from three sides at about 06:00, capturing its ammunition depot. Some 300 fighters participated in the attack armed with a recoilless rifle, rocket-propelled grenades, mortars, machine guns, and small arms, badly outnumbering the International Security Assistance Force (ISAF) presence of about 85 U.S. Army, Afghan National Army and Latvian Army soldiers, and the 35 Afghan soldiers who abandoned their positions. It would later be known as the Battle of Kamdesh.
During the first three hours of the fight, the U.S. troops remained under intense mortar and small arms fire, before the Taliban fighters breached the compound and set fire to it. Romesha moved under heavy fire to reconnoiter the area and seek reinforcements from a nearby barracks, helping the ISAF forces to regroup and fight despite being targeted by a Taliban sniper. Romesha led the firefight to reclaim the depot, organizing a five-man team to counterattack while still under fire. He then neutralized one of the Taliban fighters’ machine gun teams. While engaging a second, he took cover behind a generator which was struck by a rocket-propelled grenade, and Romesha was wounded in the neck, shoulder, and arms by shrapnel. Despite being wounded, Romesha directed air support that killed an estimated 30 Taliban and then took out several more Taliban positions himself. He provided suppressive fire to allow three other wounded American soldiers to reach an aid station and then recovered several American casualties while still under fire. Romesha’s efforts allowed the troop to regroup and fight off a force superior in numbers. The fight lasted 12 hours, and eight American soldiers were killed, making the engagement one of the costliest for ISAF forces during the war. Nine soldiers were decorated with Silver Star Medals for the fight. Several days later, the ISAF forces withdrew from the post.
Citation: Staff Sergeant Clinton L. Romesha distinguished himself by acts of gallantry and intrepidity at the risk of his life above and beyond the call of duty while serving as a Section Leader with Bravo Troop, 3d Squadron, 61st Cavalry Regiment, 4th Brigade Combat Team, 4th Infantry Division, during combat operations against an armed enemy at Combat Outpost Keating, Kamdesh District, Nuristan Province, Afghanistan on October 3, 2009. On that morning, Staff Sergeant Romesha and his comrades awakened to an attack by an estimated 300 enemy fighters occupying the high ground on all four sides of the complex, employing concentrated fire from recoilless rifles, rocket propelled grenades, anti-aircraft machine guns, mortars and small arms fire. Staff Sergeant Romesha moved uncovered under intense enemy fire to conduct a reconnaissance of the battlefield and seek reinforcements from the barracks before returning to action with the support of an assistant gunner. Staff Sergeant Romesha took out an enemy machine gun team and, while engaging a second, the generator he was using for cover was struck by a rocket-propelled grenade, inflicting him with shrapnel wounds. Undeterred by his injuries, Staff Sergeant Romesha continued to fight and upon the arrival of another soldier to aid him and the assistant gunner, he again rushed through the exposed avenue to assemble additional soldiers. Staff Sergeant Romesha then mobilized a five-man team and returned to the fight equipped with a sniper rifle. With complete disregard for his own safety, Staff Sergeant Romesha continually exposed himself to heavy enemy fire, as he moved confidently about the battlefield engaging and destroying multiple enemy targets, including three Taliban fighters who had breached the combat outpost’s perimeter. While orchestrating a successful plan to secure and reinforce key points of the battlefield, Staff Sergeant Romesha maintained radio communication with the tactical operations center. As the enemy forces attacked with even greater ferocity, unleashing a barrage of rocket-propelled grenades and recoilless rifle rounds, Staff Sergeant Romesha identified the point of attack and directed air support to destroy over 30 enemy fighters. After receiving reports that seriously injured Soldiers were at a distant battle position, Staff Sergeant Romesha and his team provided covering fire to allow the injured Soldiers to safely reach the aid station. Upon receipt of orders to proceed to the next objective, his team pushed forward 100 meters under overwhelming enemy fire to recover and prevent the enemy fighters from taking the bodies of their fallen comrades. Staff Sergeant Romesha’s heroic actions throughout the day-long battle were critical in suppressing an enemy that had far greater numbers. His extraordinary efforts gave Bravo Troop the opportunity to regroup, reorganize and prepare for the counterattack that allowed the Troop to account for its personnel and secure Combat Outpost Keating. Staff Sergeant Romesha’s discipline and extraordinary heroism above and beyond the call of duty reflect great credit upon himself, Bravo Troop, 3d Squadron, 61st Cavalry Regiment, 4th Brigade Combat Team, 4th Infantry Division and the United States Army.
Bristol Tennessee Essential Services is an electricity and fiber services utility company that serves 33,000 customers with only 68 employees. It offers the fastest internet available in the United States at 10 Gigabits per second, has implemented efficiencies that saved its customers approximately $70 million over the last 40 years, and has customer satisfaction levels approaching 100 percent on many products and performance measures.
- Reliability is a key performance measure and a key success factor for BTES. With new technologies and innovations, BTES continues to decrease outage minutes with a strenuous goal of fewer than 60 minutes per customer per year, which it has exceeded for the past three years. This benchmark far outperforms the industry, regional, and best-in-class averages (all 90-100 minutes). With the use of its innovative Automated Switching System, BTES saved its customers an additional 46 minutes per customer of outage time in 2016.
- Results for the Average Service Availability Index (ASAI), a key measure of BTES’s preparedness, have outperformed all utility, region, and class comparisons, achieving a rate of 99.99 percent from 2014 through 2016.
- BTES has continuously saved money for its customers, enabling them to keep approximately $70 million in their pockets over the last 40 years. The organization considers this measure a key financial success factor.
- The company’s employee retention rate has increased to 100 percent, while the industry benchmark is 91 percent and the national industry average is 82 percent.
- Service reliability, as measured by reducing electrical outages and by the national System Average Interruption Duration Index (SAIDI)—or the total number of minutes in which a customer’s service is interrupted divided by the total number of customers served by the utility company over the same period of time—has continuously improved and has outperformed the annual goal of less than 60 minutes, far outperforming industry, regional, and best-in-class averages (all 90–100 minutes).
- BTES has not had a lost workday in over a year, and over the last 35 years, only two safety-related incidents have resulted in lost work days for the company.
- BTES works to prevent outages through several preventative actions, and a database with causes of outages is maintained and discussed by employees at daily and weekly outage meetings. The company’s results for the Average Service Availability Index (ASAI), a key measure of BTES’s preparedness, have outperformed all utility, region, and class comparisons, achieving a rate of 99.99 percent from 2014 through 2016.
- BTES’s operating and maintenance expenses have consistently remained below those of other area power companies and other comparable sources. During the timeframe of 2012–2016, BTES operating and maintenance expenses per customer were favorably lower than other Tennessee Valley Authority (TVA) local power companies and all municipal average comparisons.
Customer Satisfaction and Engagement
- Due to efficiencies such as integration of the fiber optic system, energy-efficient home improvement loans, training at in-house seminars and trade shows, energy-efficient lighting and equipment, and continuous cost evaluation and control, BTES has saved money for its customers, enabling them to keep approximately $70 million in their pockets over the last 40 years. BTES considers its ability “to maintain the amount of money in customers’ pockets” to be a key financial success factor.
- To measure customer satisfaction, BTES uses the Customer Average Interruption Duration Index (CAIDI) data maintained by the American Public Power Association. From 2013 through 2016, BTES’s results for this index exceeded all utility, region, and class comparisons. Customer satisfaction levels with all BTES product lines (especially Internet, television, and electricity products) as well as customer service, the help desk, average outage time per customer, Internet performance, and cable television have been sustained over many years, with many levels approaching 100 percent and exceeding competitor, industry benchmarks, and best-in-class comparison levels.
- All customer feedback, both positive and negative, is tracked and reviewed weekly by the company, with all senior leaders involved, during the formal Continuous Improvement Team meeting. The feedback is analyzed for potential gaps, trends, and improvement opportunities. Improvement opportunities are identified, root causes are determined, and actions are taken to address customer concerns.
A Valued Workforce
- Employee engagement is measured through performance appraisals, retention, and attendance. The percentage of employees with perfect attendance is about 75 percent, far exceeding the industry average of just under 20 percent. Employee retention has increased to 100 percent, while the industry benchmark is 91 percent and the national industry average is 82 percent.
- Striving to provide the “best place to work” in the region, BTES demonstrates a commitment to building an effective workforce environment and to engaging and empowering the workforce. For example, BTES provides on-site exercise equipment for employees and retirees, access to information on healthy lifestyles and well-being, flu shots, and educational and advancement opportunities. BTES’s commercial-grade kitchen, which is brought online during extended area power outages and inclement weather, enables its support staff and leadership to produce meals for crews who are engaged in restoring power, further reducing the outage time experienced by customers.
- BTES uses its SMART (System Management and Resource Training) system, an online training portal, to communicate process standards, standard operating procedures, and process changes and improvements. Employees are expected to complete all assigned modules every quarter, and 100 percent of BTES’s workforce annually participates in workforce development opportunities.
Leadership Fostering a Culture for Success
- BTES’s family-oriented management team has shared accountability and is consistently focused on the organization’s vision “to be the best electric, Internet, telephone, and cable television provider.” Senior leaders operate with a high level of mutual trust and collectively hold each other accountable for achieving strategic objectives, action plans, and high performance in the organization’s key success factors of safety, reliability, and finance.
- BTES has built a culture of continuous improvement, which is fully deployed throughout the organization and is effective at identifying and rapidly improving performance. For example, the CAP-DO process (Check, Act, Plan, Do) encourages employees and teams to rapidly improve processes. Through the use of its Improvement Initiative Process (IIP), BTES treats all customer- and employee-related inputs as either an “OFI” (opportunity for improvement) or a “positive,” which provides consistency and rigor in data gathering from all departments and processes throughout the organization.
Superior Financial and Marketplace Results
- In its service area, BTES holds market shares of 100 percent for electrical services, 75 percent for Internet services, 60 percent for telephone services, and 70 percent for cable services. Those percentages for fiber-related services (Internet, telephone, and cable) have increased relative to the company’s competition.
- Bad debts have consistently remained under 0.1 percent for BTES, far outperforming the regional average of 0.17 percent.
- BTES has steadily increased its annual revenue to approximately $112 million and has consistently produced a positive net income for more than 40 years