Every business thrives in meritocracy, synergy, and radical transparency
A little over a year ago, my dad, who was the president of a real estate company, passed away.
He set the direction. He made every decision. He developed its people. All of a sudden, without due notice, my mom and I had to take his place.
Thus, a few months ago, we engaged a team to help us manage change and transition into a new, better-built organization that can support our goals. ‘You underinvested in talent,’ our consultants pointed out. After we lost our founder, it’s time to put the right people in place.
The first time I read Principles by Ray Dalio a few years ago, I wasn’t quite sure what my role was in the company, taking on project to project without a particular designation that I had to give myself a catch-all position, Chief of Staff. Today, after reading the book for a second time, I’m now, in title and in principle, Operations Director, and I make at least 50% of executive decisions.
One of the underlying drivers of change is culture, which can make or break its ability to achieve its goals. Ray Dalio says people drive culture, and culture drives people. It’s a chicken and egg situation.
After reading the book, it’s clear that Dalio strongly advocates for three key values to be present in every organization. I nod my head to all, seeing how much we need them.
A system based on performance is a way to ensure an organization stays effective.
Our company never had a consistent performance review process in place. Because of that, we don’t have a basis for hiring, rewarding, and recognizing talent. The reverse is also true. It’s difficult to rationalize on paper why we need to let some people go, and for all we know, we might be doing so for the wrong reasons.
“A solid process lays the foundation for a healthy culture, one where ideas are evaluated by merit and not by job title.” — Eric Ries, The Lean Start-up
Without metrics and skills to measure contributions by, we end up rewarding people who make the biggest noise or people whose work we’re most familiar with. We give in to psychological misjudgments, which makes an unfair vetting process.
That needs to change. How?
First, we build awareness across all levels of the organization, starting from the top.
As executives, we should be first to admit our mistakes and be open to accepting feedback. We must know that no one has all the answers. The purpose of having teams is to harness the collective ability of the whole, which is greater than the sum of its parts. We should be willing to suspend judgment before making decisions until we hear different perspectives.
Second, we seek the help of believable people in solving problems. This means we account each one’s strengths and areas of expertise, qualified by their track record.
We define people’s strengths and group them with others who complement them. Then we measure, reward, and compensate based on these.
If we instill awareness and reinforce it through the way we do things — in processes, systems, and policies, we shape a culture that celebrates merit.
We can’t harness collective power if we work in silos.
In our company, people didn’t collaborate on solutions together. They had been so used to being told what to do that they waited even for instructions on who to meet with.
Worse, a tribal mentality kicks in. Some teams formed cliques and pointed fingers when something goes wrong. Victim mentality creates a destructive combination, slowing down the achievement of our goals.
How do we prevent this?
Again, we build awareness and help people understand why it’s important. We tear down the walls by setting shared goals and measuring their achievement. We share the rewards, too.
We add collaboration to their performance reviews. We grab every opportunity to reinforce these principles — during all-hands meetings, business reviews, and one-on-one conversations.
After all, a company holds one giant puzzle with each member holding a vital piece. Leadership’s role is to put the pieces together and keep them in place.
Effective communication is important in any relationship.
It’s healthy when two sides can be truthful about what needs to be said, disregarding the need to be overly polite, holding a long view of each other’s greater good.
What’s tough for an organization is when people prefer to avoid conflict, being passive-aggressive and saying ‘yes’ when they don’t fully agree. Perhaps they don’t feel they have the safe space to speak. Perhaps rejection for them is uncomfortable. But when tensions are left unaddressed, a cloud of judgment affects what people think and do. Because there’s no feedback loop, we rid people of opportunities to learn from mistakes that they don’t even know are points for improvement.
How do we avoid this?
We reinforce a growth mindset, where every interaction is a chance to learn. A big part of this is training on self development.
On the corporate side, we communicate that no one will be punished for being honest and for challenging ideas. We create an environment where people are encouraged to speak up and work together more effectively. We make people comfortable with having difficult conversations, with progress as the north star.