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Stuck in the middle

Breaking some rules to get something important accomplished

By Ian Hendry

How comfortable are you working in the grey zone? I ask this question because last week someone came to see me and, nod nod, wink wink, whispered, “I’m operating in the grey zone.”

Not knowing to what the person was referring, I responded, “Really, and who exactly gave you permission to do that?” and an executive’s name was provided and the instruction to operate in that manner seemed to make good business sense.
You may be familiar with the term “skunkworks,” which refers to a small group of people who work on a project in an unconventional way. The group's purpose is to develop something quickly, with minimal management constraints.

Working in the grey zone is somewhat akin to that. In this case, the idea is that permission is given to break some rules in order to get something important accomplished.

The concern for any CHRO, of course, is that others in the organization learn that exceptions have been made and ask the question “Can we be given the same permissions?”

I would hazard a guess that many managers knowingly operate in the grey zone and turn a blind eye to many things that contravene company rules. How many managers, caught after a breach occurs, suddenly become master sergeant Schultz (from the TV show Hogan's Heroes) impersonators using the catchphrase "I know nothing! I see nothing! I hear nothing!”

It seems to me that, more frequently than not, CHROs are caught in the middle.

So I have been thinking quite a lot about operating in the middle, albeit without breaking company rules. For example, I am a great proponent of corporate agility — an ability to rapidly respond to change.

In the technology world, many of us have introduced the agile mindset to our workforce, since a non-linear, iterative methodology often enables work to be done better and faster. Contrast that with a waterfall mindset that places a high order on control, where tasks are fixed and stages are carefully set and measured.

When confused employees ask me “Are we operating in 'agile' or 'waterfall' because I am really confused?” I answer with a “yes.” The payments industry today, like a number of industries, is faced with disruptive change.

This demands instances where we adopt an agile methodology and, in some cases, where control and predictability are vital, we need to diligently follow a waterfall approach. It is not either/or. We need to be both equipped and adept at both mindsets.

This week we focused on structure and hierarchy at our monthly meeting at the National Club. Most of us grew up in hierarchies, where the leaders make the decisions and employees seek approval before acting beyond normal role responsibilities.

These are somewhat like check-points akin to waterfall. Zappos on the other hand, and I think it is a fascinating pursuit, have instituted a radical change in structure — holacracy. I’ve heard holacracy explained as “the leader abdicates, managers become irrelevant and space opens up for people to operate in the best interest of the organization, collaborating with colleagues under the constitutional framework.”

The process exercises the power, not one person. This collaborative, iterative approach can be likened to an agile mindset. As we think about structures, right now we seem to be constantly reading about sizeable downsizings, and well-known consulting firms are undertaking major assignments to reduce costs by flattening organizations.

Somewhere in between hierarchies and flat organizations, there is something called flatarchies. They have strong elements of hierarchy, but also use ad-hoc teams as necessary.
As long as the strategy is well-defined, I have always thought one of the primary roles of a CHRO is to find ways to get work done in the most proficient and competent way possible. Understanding the benefits of different structures is important.

The old chestnut that performance appraisals don’t work — a story that has become tedious because of its age and constant repetition —  is getting its annual attention.

We read about killing the ratings. Leading-edge organizations are re-inventing performance management and introducing different designs. We might all concede that current systems can be improved because most of us are lousy at goal-setting, we do not make employees sufficiently accountable and we shy away from candid conversations.

Addressing these weaknesses and introducing more frequent check-ins with better-trained managers might well improve the process, but somewhere in our talent mapping, succession planning and bonus decisions, some element of ranking must occur.

Whatever approach we take, flexibility is key and we can see hybrid approaches to mindsets, structures and performance processes being the right solutions. It seems to me that, in our current world, black or white is rarely the case, and we live in the in-between grey zone a lot of the time.

Did you know the term "black and white" originated in the 18th century in England and was a reference to the occasional birth of a black sheep into a flock of white sheep? Black wool was considered commercially undesirable because it could not be dyed. Given its undesirability, are there any black sheep in your organization? If so, is that good or bad? And the answer is also “yes.”

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Ian Hendry

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