Everyone agrees: It’s a good thing for organizations to be authentic.

Where folks disagree, though, is why organizations should be authentic.

Deep down, we know that authenticity is valuable. But when we try to talk about “why our organization should be more authentic” and convince others to pursue authenticity, our conversations can get pretty confusing.

We often aren’t clear about our logic and which one(s) we’re using. Worse, when we choose a logic that is wrong for the audience we want to convince, pursuing authenticity can actually look like a waste of the organization’s time.

There are two arguments for organizational authenticity: one based on trust, and one based on uniqueness.

Logic #1: Authenticity Leads to Trust

Authenticity is valuable because authenticity invites stakeholders’ trust.

Stakeholders feel safer trusting an authentic organization because being authentic makes an organization’s behaviors become more predictable, reliable, and more trustworthy. Thus, authenticity is valuable because it makes it possible for stakeholders to trust the organization.

Logic #2: Authenticity leads to Unique Contribution

Authenticity is valuable because organizations that act authentically create a more accurate and more abundant expression of their unique values, capabilities, and purpose.

Being authentic effects the type and quality of the products, services and experiences that an organization offers. Because acting authentically draws forward the indigenous qualities inside the organization, an authentic organization creates behaviors, products and services that are specific and unique to that organization.

What authentic organizations create, in terms of products, services and experiences, are less easy to substitute and more likely to be special. Thus, authenticity is valuable because it establishes a distinctiveness that, relative to other organizations, makes relationships with the authentic organization more significant to stakeholders.

Kumbaya or Competitive Advantage?

Both the Logic of Trust and the Logic of Unique Contribution make real sense, but one logic is more ‘business-like’ than the other.

To put it bluntly, the “trust” logic for authenticity has a kind of ‘Kumbaya’ feel to it, and treats authenticity as a quality that’s “nice to have” but not necessarily mission-critical.

In contrast, the logic of ‘unique contribution’ has a ‘bottom-line impact’ because authenticity is the only way to generate sustainable competitive advantage. Thus, for an organization that wants to maximize its impact and achieve its purpose, being authentic is critical to success.

Is Kumbaya or Competitive Advantage more compelling to your stakeholders?

A few weeks ago I met with some of the members of The Community Roundtable to talk with them about strategies for sustaining authenticity in their online communities. Rachel Happe started us off by asking each manager to share his or her definition of authenticity and understanding of why being authentic would be good for an organization.

To a person, the managers believed that being authentic was valuable because it leads to trust. Each of them (and each of their organizations) is striving for a more trusting and trustworthy organizational culture. The logic of uniqueness and the conversation about competitive advantage didn’t come up as readily, and I was glad to have the chance to explore the issues with this group.

Both trust and uniqueness are important arguments for organizational authenticity.

Trust is absolutely something that every organization should pursue. But trust is not the central reason for being authentic. The central reason for being authentic is to sustain our organization’s uniqueness and to put that uniqueness to work to achieve the organization’s purpose.

We need to talk more about how authenticity leads to sustainable uniqueness and why authenticity is critical to an organization’s success.

The idea that these managers were advocating for more authenticity but relying only on one logic — and the ‘kumbaya’ one at that — made me realize that we/I need to talk more about how authenticity leads to sustainable uniqueness. We need to talk more about why authentic is critical to an organization’s success.

And, it made me wonder:

• Have we been under-utilizing the logic that organizational authenticity leads to unique contributions?

• Have we been under-appreciating organizational authenticity not only as a virtue in and of itself, but as an engine for creating stakeholder value?

• Are there other reasons for pursuing organizational authenticity that we’ve also overlooked?

I’d love your thoughts.

See also:
Is Authenticity the key to being “Meaningfully Different”?
Beyond Positioning: Establishing Authentic Optimal Distinctiveness
Can an organization be too different?: The Strategic Value of Optimal Distinctiveness

Images: Vans Authentic from Flatspot FSPT and FlatspotCollections

There’s a great photo in the New York Times (May 19, 2011) of a whitepaper chart created to manage the Delta-Northwest Merger’s Long and Complex Path.

The chart is full of of post-its, probably more than 200 of them. Each post-it reflects a point where the systems and processes of the organizations need to be integrated, and the assorted colors represent the type of operational system where the integration task is to be solved.

Notwithstanding the low tech-ness of their process, this post-it chart is an amazing view of what it takes to put together two very different, very distinctive companies.

One Post-It = Two Different Cultural Expressions

Each post-it note reflects not only an integration task, but a point where the cultures and identities of these two companies are made concrete. Each post-it shows a place where the culture of one organization is different from the culture of the other. To resolve each of these integration tasks, the merger team has to decide which behavior, which system and which characteristic with be chosen for the ‘new’ merged culture, and which behaviors, systems and characteristics will be rejected.

While one spokesperson notes that these amount of work to resolve these details is ‘boring’, I see it as rather fascinating. That’s because opportunities for the merger team to create a distinctive, merged organizational culture exist at each of these points. The merger team needs to chose one concrete expression over the other.

What matters is not only which behavior is chosen, but also why it is chosen, and what that behavior is supposed to express.

Take this very subtle distinction, from Jad Mouawad’s detailed article:

Delta always thought of itself as the gracious host. Hence its flight attendants poured the requested drinks.

Northwest was the practical carrier; its attendants just handed over the can.

Distinctiveness => “Signature Moves”

When I talk with organizations about how they demonstrate what makes them distinctive, I often mention the concept of a ‘signature move’.

A signature move is a behavior that demonstrates — through its particular style– a quality that is important to how the organization defines itself.

The beverage delivery gesture is a perfect example– the same task, “delivering a beverage” is performed differently. And at each organization, that slightly different performance communicates something deeper and more meaningful about who the organization really understands itself to be.

These differences in ‘who the organizations are’ reflect how the carriers hoped (at one time) to differentiate themselves from each other and create a competitive advantage in the eyes of potential customers.

In the ideal airline industry …

Ideally, some customers would prefer the gracious culture of Delta, while others would prefer the practical culture of Northwest, all because the concepts of “gracious” and “practical” were concretely expressed in authentic behaviors by the organization and its representatives.

These signature moves, demonstrated throughout the organization, construct the distinctive identity that should differentiate the firm from competitors.

In a world where airtravel customers felt that they had positive reasons to choose one airline over another, the cumulative distinctions created by these different behaviors could have created a competitive advantage for one airline over the other.

In the actual airline industry…

However, in customers’ practical experience of these airlines, the subtle differences in style and culture were overwhelmed by the profound and disappointing similarity of bad service at both airlines. Neither the graciousness of Delta nor the practicality of Northwest made enough of a difference to set either organization apart as distinctive.

Which, of course, points to the weakness of depending on distinctiveness alone to make your organization competitive or attractive.  Distinctiveness only matters if you can deliver a decent product or service. The details matter, certainly, but only once the core business is competent.

See also:
Beyond Positioning: Establishing Authentic Optimal Distinctiveness

Is Authenticity the key to being “Meaningfully Different”?

Snippet of image by Seth W. Feaster/The New York TImes, in its full glory at The New York Times.

Rethink the conventional ‘meaning’ of Twitter Lists.

Now that Twitter lists have been rolled out more broadly, it’s possible for many/most of us using Twitter to create lists of those whom we follow (great– easier than Tweetdeck!). It is now also possible for us to see which Twitter lists how many Twitter lists we’ve been put on by others.

This second feature– seeing where how often *you* are listed, has immediately become the new twitter high.

But it is downright disturbing to imagine that “the number of twitter lists you are on” has “become a new barometer of cool” (via @chrisheuer). Sure, we all want to be cool, but being on a lot of lists (or not) doesn’t tell us whether we’re cool– it just tells us that for some of the folks who list us, we’re tucked into a category of other Tweeters quite like us. Consider:

Being on many Twitter Lists is NOT “a barometer of cool” — it’s a measure of ease of Categorization.

Easy to categorize => Similar to others => Easy to ‘list’

If many people you follow are the same kind of voice, have the same domain of expertise, or are from the same circle, it will be easy and useful to cluster them together on a list.

However, not every person you follow is similar enough to other people you follow to warrant their being placed on one of your Twitter lists. For example, @ikepigott is one of the only ‘free market’ advocates I follow, so I’m not putting him on a list. Does that mean he is unimportant? Uncool? No– it just means he doesn’t fit in a category that is ‘big enough’ for me to list.

Similarly, I follow @CaliYost– but what list will I put her on? Work-Life Fit experts? (sure) Tween parenting advisers? (okay) Women Business Owners? (fine) Inspiring people on Twitter? (that too). So, whatamIgonna have? @CaliYost on 4 different lists? She’s hard to put into just one category, and having her on many lists seems neither efficient nor necessary.

Just because you are categorizable to some people doesn’t mean you are more valuable, or less valuable. It just means that it makes sense to group you with other people. And that is fine, but it is not a measure of ‘cool’.

In fact, it may be that NOT being on a lot of lists is also a measure…. a measure of your uniqueness.

I only follow ONE @Heartfeldt. She’s the only feminist/leader/author/grow-up-to-be-like-her friend I have (though, someday, I hope there will be more leaders of her ilk on Twitter).

Likewise, I only follow ONE @Bob_Bruner. He’s the only colleague/finance professor/dean/person-with-William-Blake-quote-on-office-wall that I follow (though, I wish there were more finance professors like him).

What if you are the only person like you that other people follow?

What if you are not on a lot of lists, and yet you have followers?

That, dear twerpson, means that you are unique. You are providing a special voice. Your tweets stand out, because you cannot be easily categorized.

To me, that uniqueness is what’s “cool”.

Related Posts:

Is Twitter is Really Changing Comcast’s Culture?: 7 Signs to Look For
Tweet Yourself Like The Person You Want To Be
Don’t Let Personal Branding Stifle Your Authentic Voice

Image: Seeds of Summer by Daz Smith on Flickr

Can your organization’s core values make it easier for you to extend yourselves onto social media effectively?

For some organizations, absolutely yes. Consider the opportunity for one Jewish organization as it considers its social media strategy.

Last week I had the chance to work with a group of non-profit Jewish professionals in charge of youth community outreach for the Union for Reform Judaism (URJ). They invited me to run a workshop on Community & Branding, with an emphasis on tactics for being more authentic as they extend themselves into social media.

When I work with organizations attempting to express themselves authentically with social media, often the first challenge is understanding how using social media effectively will compromise or confront their organization’s core values and standard operating procedures. As anticipated in the elective I taught at Darden in 2000 to 2002 on Leading in the Digital Economy, and now becoming clear to social media experts and early-adopting organizations, the movement towards ‘interwebbed’ interaction through social media challenges some long-held notions about control, command, and hierarchy.

For any organization looking to become a more “social organization”, the values, attitudes, and behaviors necessary for success in online interaction (within the organization and across the organization’s boundaries) can contradict values that  implicitly and explicitly guide them.

This might not be the challenge facing the Union for Reform Judaism.

Values supporting a Social Media Strategy

As I learned more about this particular part of the larger organization and considered their list of shared values, several of these values seem (to me) to align with the shift in values that transparency, inside-outside interaction, supporting the ‘customer’ on social media calls for.

Of the URJ’s values (outlined on the NFTY.com site), these appear to be to be particularly well-suited to a social media strategy:

COMMUNITY – KEHILAH
The need for community to provide an outlet for the individual needs of all Jews

PARTNERSHIP – SHUTAFUT
The need and desire to work together to foster each individual’s connection and commitment to ensuring the vibrancy of our movement

PLURALISM –- KOL YEHUDIM
The acceptance and encouragement of alternate modes of Jewish experience

SELF – TIKKUN MIDDOT –
The understanding that we are to be a light unto the nations by fostering an environment where every individual can meet and exceed their potential as Jews and citizens of the world

Community

Emphasizing and enacting the value of Community is precisely what social media is about… ‘all’ the URJ needs to do is to recognize that by providing online community for their clients and participating in the larger Jewish online community they are putting this core value into action. While it may be that some of the attitudes and practices that go with face-to-face community building need to be adapted to online community building and participation, this will require only adjustment in tactics, not in core values.

Partnership

Emphasizing and enacting the value of Partnership seems like another direct application of URJ values to the Jewish youth who are online. They not only need to work to become partners with each youth client, but also to become partners with the communities that these Youth are already part of. Enacting the value of partnership, the URJ has a built-in, positive posture towards connecting person to person, community to community and person to community.

Pluralism

Emphasizing and enacting the value of Pluralism could help the URJ accept and respond to the generational differences between how their clients (e.g., Reform Jewish youth) understand and use social media and how the URJ as an organization might want to use social media. This value could help them establish a posture of understanding and adapting to these preferences, rather than enforcing or propounding a particular kind of relationship between social media, youth and the URJ organization.

Self-Growth

Emphasizing the value of Moral Self-Growth asks the URJ to start with the ‘self’ as a resource for finding moral balance, sustaining good character, and being part of the community. And where better to focus their efforts for self-growth, as individuals and as an organization, than on their own authenticity?

As each individual URJ staffer puts his or her Jewish values into action, and as the URJ organization as a whole reflects on who they are together, they will be more effective at using social media to express their authenticity. Moreover, any obstacle that comes their way, whether it is something personal like a discomfort with sharing authority or something collective like a discomfort with sharing authority, can be approached first by returning to the question “How can we be true to our values as Jews and as a URJ organization as we respond to this challenge?”

Espoused Values to Enacted Values

Of course, as an outsider (neither a member of the URJ nor a Jew myself) I can’t say know how well the organization holds itself to these values. The URJ, like most organizations, may experience a gap between what they espouse and what they actually enact in their behavior.

However, the URJ has an advantage, in that the challenges of working effectively with social media to connect with their clients/community will invite them to put their organization’s values into action. incorporating social media into their current outreach and internal practices gives the URJ a chance to close any gaps between the values they espouse and what values they enact.

‘Simply’ (in quotes because it isn’t easy) by working to be better Reform Jews and challenging themselves to be authentic in each of their social media forays, these non-profit professionals can both reinforce their organization’s shift to being more social and engage & enact their organizational- and personal – values.

Social Media as an invitation to Authenticity

Most organizations struggle in their approach to social media, often because the values that undergird social media practice conflict with some of the values that are fundamental to the organization. Not necessarily so with the URJ…

There seems to be a promising overlap between the opportunities of adopting new technology, the necessary transformation of the organization, and the pursuit of the organization’s collective purpose. Instead of being challenged to change their core values, the URJ is instead inviting itself to be more Authentic. This seems like a positive and powerful strategy for incorporating social media.

Photos from National Federation of Temple Youth stream on Flickr

Here’s your chance to see someone in the brandividual role taking action, over time, in the face of a big challenge.

When I gave my talk about The Rise of Brandividuals at last week’s Corporate Reputation Conference, I used the example (well-known in social media circles) of @scottmonty of Ford Motor Company to illustrate what makes brandividuals effective. Now, thanks to Christopher Barger (and a hat tip to Chris Brogan for the idea) we can watch how a brandividual helps an organization and its stakeholders handle a tough social, reputational, and organizational transformation.

All you have to do is follow @cbarger on Twitter .

(If you aren’t already on Twitter, it’s easy to join. If @cbarger (and @cvharquail ) are the only folks you want to follow on Twitter, you can just subscribe to the tweetstream with RSS and use your RSS reader to catch up whenever you want. [If you have no idea what I'm talking about but you're interested in learning, email me and I'll help you get started.])

Like @scottmonty, @cbarger is the official Director of Social Media and GM’s Director of Global Communications Technology. In contrast to @scottmonty, @cbarger has only a tenth of the number of Twitter followers– although that may change if/as GM stakeholders and assorted interested individuals start to follow GMs actions by following @cbarger on Twitter.

Christopher Barger has a sophisticated understanding of how social media can play a role in crafting an organization’s reputation and relationships with stakeholders, although he may not be as well known as Scott Monty. It’s also not entirely clear to me that Barger is a "brandividual " per se. Christopher Barger’s personal brand may only be relevant in social media circles… we’ll have to see what kind of ‘personal brand’ he has among car fans & GM stakeholders.

What should we be looking for as we scan @cbarger’s Twitter stream? Let’s look for transparency, personal expression & interpretation of situations, and fair brokering between individual stakeholder concerns and the GM party line.

And as a bonus…

Thanks to GM’s bankruptcy filing yesterday, this is a "two-fer"– we can watch a brandividual in action AND an organization coping with profound challenges and an undeniable impetus for change.

Let us know what you see. …

For more insight, see:

General Motor’s Christopher Barger Gives Great Rundown On GM’s Social Media Progress by Jon Cass, a corporate social media expert who follows the auto industry.

The social mind of a corporate marketer (podcast)

Blogging at Big Blue, Part 1, by Dan Greenfield. How Barger got his start in social media.

Apologies to the National Coalition for Dialogue and Deliberation, but I’ve stolen your great presentation to the Obama Administration’s Open Government Directive group. I’m applying it to decision-making processes within authentic organizations…. Tell me how well you think it works.

In previous posts about layoffs, alternatives to layoffs, and organizational decision-making processes, I’ve argued that transparency, participation and a democratic approach are important for building confidence in and commitment to the decisions made. But,

What does it really mean to have an open process for decision-making within an organization?

Is it just getting everyone together in the big conference room to listen to some presentations, ask a few questions, and not argue with the conclusions? Or is it using lots of great tools , like Dotmocracy? Or is it something bigger?

Obama has advocated that government processes reflect "Transparency, Participation and Collaboration". These are important, big-picture guiding values, and they need to be be translated into more specific principles that can be put into practice by designing an effective decision making process.

Listen to the real experts on open processes

There are experts out there, lots of them, who specialize in creating conversations between groups engaged in deep, entrenched bitter conflict, among assemblies of individuals trying to coalesce into movements, and within communities that need to be heard by their government. These experts have gotten together to product the Seven Core Principles for Public Engagement. The immediate goal is to encourage the Obama administration to craft its open government initiative in ways that reflect these principles. The longer-term intent is to create a basis for other efforts to engage individuals in serious dialogue about important issues.

The Core Principles are kind of the ‘lowest common denominator’ of group conversations that are authentic and embracing of differences. Check out the Seven Principles, below …

The Seven Core Principles for Public Authentic Engagement

In practice, people emphasize or apply these principles in many different ways, and often embrace additional principles. These seven principles reflect the common beliefs and understandings of those working in the fields of public engagement, conflict resolution, and collaboration.

1. Careful Planning and Preparation
Through adequate and inclusive planning, ensure that the design, organization, and convening of the process serve both a clearly defined purpose and the needs of the participants.

2. Inclusion and Demographic Diversity
Equitably incorporate diverse people, voices, ideas, and information to lay the groundwork for quality outcomes and democratic legitimacy.

3. Collaboration and Shared Purpose
Support and encourage participants, government and community institutions, and others to work together to advance the common good.

4. Openness and Learning
Help all involved listen to each other, explore new ideas unconstrained by predetermined outcomes, learn and apply information in ways that generate new options, and rigorously evaluate public engagement activities for effectiveness.

5. Transparency and Trust
Be clear and open about the process, and provide a public record of the organizers, sponsors, outcomes, and range of views and ideas expressed.

6. Impact and Action
Ensure each participatory effort has real potential to make a difference, and that participants are aware of that potential.

7. Sustained Engagement and Participatory Culture
Promote a culture of participation with programs and institutions that support ongoing quality public (organizational) engagement.

Why are these principles important?

At first glance, the principles are simple and unsurprising… but look again.

What’s striking to me is the wisdom that is condensed into what appear to be very simple principles. In practice, very few managers think about how the decision making process — not just the decision itself — can create something important and lasting. The process can get you a decision, and it can also generate such things as "democratic legitimacy", meeting everyone’s needs (not just those of the organization), and making sure that everyone is away that the process can actually make a difference.

I was tipped off to these Core Principles by Pamela Zivari, at Network for Peace through Dialogue. The Network for Peace through Dialogue is a non-profit organization dedicated to connecting grassroots communities, both local and global, in order to identify and research common issues and solutions in the areas of making peace and promoting just action.

I bet that if we looked closely at the processes where even the choice of layoffs leads to increased trust, commitment and contribution by organizational members, such as the process at Beth Israel Hospital, we’d find most of these principles in action.

Are they as simple to use as they seem? Are these principles something that we can borrow from non-profits and apply effectively to business organizations? What do you think….

Here’s a neat podcast interview with Paul Levy, CEO of Beth Israel Deaconess Medical Center, whose leadership approach to the need for dramatic cost-cutting we considered in the post Finding a leadership opportunity in alternatives to layoffs.

This podcast interview offers a few additional insights, in part because the interviewer Catherine Bell asks some smart questions. It’s worth a listen, just to get a sense of the ‘man behind the leadership legend’.

Here are a few top notes from the interview:

"It’s striking to me that this (process) is considered unusual, because to me it’s so commonsensical."

• Using his transparent and highly participative process, Levy and the BIDMC employees were able to reduce a predicted 600 layoffs down to under 150 layoffs. Pretty good especially for the 450+ who still have jobs at the Medical Center.

• Levy is a little surprised that he hasn’t been contacted by many other leaders who might want to try this model — just one or two so far.

• Levy also hasn’t seen many other organizations use a transparent approach for reducing the actual number of layoffs. He thinks this is odd- "You want to engage people in the kids of changes…. people on the front lines … often have suggestions about how to run things more efficiently & effectively– why wouldn’t you want to listen to them?

Asked if he’s experienced any downside to this transparency, Levy says (I paraphrase) that to splay out the problem for the world to see, copy, pass along, etc. could feel difficult. … Who wants to broadcast the extent of their financial troubles and what they’re doing to fix them? However, it’s also not competitively interesting information that others could use to steal business from BIDMC. In fact, hospitals probably have a lot to learn from one another.

The data has to be public to help employees acknowledge the problem as well as to help generate solutions. A leader needs to use transparency with data to establish creative tension between an audacious goal and where you are now. The creative tension established by that gap helps the organization focus on the problem and also track progress.

Transparency is central to all leadership situations at BIDMC Levy is currently using a similarly transparent approach for the Medical Center’s process for eliminating preventable harm to patients, and Levy started with this transparency collective problem solving when he faced a turnaround situation when he first arrived at BIDMC. Levy argues that transparency is not just for big problems, but is also important for day-to-day operations.

An under-celebrated insight?

Transparency has been successful because:

"Everything we’ve done, has been framed along the underlying values of the people in the organization and the major mission of the organization. … For the most part, people say thank you for being so open."

The key with transparency, according to Levy:

• Give good news plus bad news
• Be sincere open and honest.

Transparency in 11 Words! It’s as simple as that. (The interview, originally on the Harvard site but impossible to find there, can be accessed here on BNet. )

Let’s say you’ve been convinced by the argument against layoffs and the recommendations for trying alternatives to layoffs. You’ve looked at a few of the Honor Roll organizations and decided to take that next step…

As you prepare to act, consider this additional option. Can you find a way to make alternatives into layoffs something more than just a cost cutting method? Can you expand your goals, so that alternatives are tactics for something larger than preservation?

Can executives pursue alternatives to layoffs in a way that (1) builds on on what defines the organization and (2) builds employees’ and leaders’ commitment?

In a word, yes. Here’s a role model to inspire you:

Paul Levy, President and CEO of Beth Israel Deaconess Medical Center (BIDMC) in Boston has engaged his entire organization in the effort to find alternatives to layoffs, through a process that should inspire other executives to take this big step. Paul Levy’s process demonstrates how alternatives to layoffs can be a leadership opportunity. The process through which these alternatives are considered and implemented can actually strengthen and grow an organization.

Levy’s plan was brought to national attention by journalist Kevin Cullen, in an article in last Thursday’s Boston Globe/Boston.com. As Cullen writes, and as Levy recounts in his own blog post Update on the economy and its effect on BIDMC , on Friday, March 6th, Levy held a trio of Town Meetings for the employees at BIDMC. In these meetings, Levy explained the overall financial situation for the hospital and solicited ideas from employees about how they and the hospital could close the gap between projected costs and revenues. Levy explained:

Our focus has to be on reduction of personnel costs, our major operating expense. Here are some ideas to start the discussion: Eliminate the 3% pay raise for people who would ordinarily receive it starting April 1. (To compensate, in the future, new raises could start with the people who have anniversary dates of April 1 and after.). Reduce future earned time accruals by one or two days per year. Forfeit one or two days of past accruals of earned time. Permit certain floors or units to avoid layoffs by voluntarily taking pay cuts equivalent to the dollars that would be saved by the layoffs in that floor or unit. Ask people to take furloughs, unpaid leaves of absence for several days.

But the bottom line is the bottom line. If you don’t like these ideas, please help us come up with others.

What lessons can executives take away from this example?

Let’s start with what Levy did for this meeting alone:

Levy shared financial data during the meeting itself, and also in budget updates before the meeting and in blog posts related to the meeting. Turns out that Levy began sharing information about the hospital’s financial struggle back in November (three months earlier) when he brought the issue to the attention of BIDMC employees.

1. Tell employees the truth about the problem. Give them data and facts.

Levy gave employees the opportunity to think about the organization in general, as well as specifically about their own work unit or department. Employees were encouraged to consider what they as individuals feel they can give up. Then, he set up a trio of meetings in a "town hall" format, so that employees could ask questions.

2. Invite employees to generate ideas.

Levy created an online forum for employees to engage with each other. Employees have been using this forum to propose and work out the details of various tradeoffs. They have been sharing ideas, explanations, and arguments for and against different recommendations. The forum has also given employees some room to vent and to bond with each other.

3. Create opportunities for employees to explore and evaluate possible options.

In addition to these steps, Levy did something more — and we have to look back into the history of his relationship with employees at BIDMC to see it. To craft the process for considering alternatives to layoffs, Levy built on a history of previous challenges at the Medical Center.

Building on history

Over seven years ago, when Levy first took the wheel at BIDMC, one of his first acts was to send a letter to all employees. As Levy remembers it (in a blog post from January 2007)

When I arrived, the hospital was in dire financial straits, morale had plummeted, and there was an associated exodus of doctors, nurses, patients, and community support … (Levy quotes from the email he sent out on his first day) :

"This is a wonderful institution, representing the best in academic medicine: exemplary patient care, extraordinary research, and fine teaching. However, the place is in serious trouble, and we are going to have to work very hard during the next few months if we are to secure our future as a non-profit academic medical center. …

One clear recommendation will be a reduction of staff throughout the hospital. While the exact number is not yet clear, several hundred positions will be eliminated to bring our level of staffing down to what can be supported by our clinical volumes. Layoffs are distasteful, uncomfortable, and scary, but we will carry them out as humanely as possible and treat people with respect and dignity. The many people who remain will be part of a more efficient medical center, and one that will be able to continue to carry out our important mission." (January 7, 2002)

Building on a foundation of trust and shared success

There is even more information about Levy’s leadership approach and about how he and the employees of BIDMC innovated themselves out of a serious financial situation, in a multimedia HBS case about Levy’s first six months. This case was co-written by my colleague Michael Roberto, management professor & blogger. Reflecting on Levy’s current actions, Michael writes on his blog:

We learned from our study that Levy had a number of distinctive leadership capabilities. Perhaps most importantly, he earned the trust of his workforce, and he built collective ownership for his turnaround plan. (emphasis mine) Those qualities enabled him to lead a very successful implementation of the plan, returning the hospital to positive cash flow after many years of heavy losses.

The trust that was created seven years ago, and the shared success from that recovery, help to make this turnaround look achievable.

Levy and the Medical Center are also building on their organization’s identity. Check out this sentence from BIDMC’s mission statement:

The mission of the Beth Israel Deaconess Medical Center is to serve our patients compassionately and effectively, and to create a healthy future for them and their families. Our mission is supported by our commitment to personalized, excellent care for our patients; a workforce committed to individual accountability, mutual respect and collaboration; and a commitment to maintaining our financial health. (emphasis mine)

Building on a shared identity: A commitment to financial health

I’m guessing, though I don’t know for sure, that this commitment to maintaining the Medical Center’s financial health was made explicit back in 2002. Because  the collective responsibility for the organization’s financial health is built into a core statement of the organization’s identity, the process that Levy has initiated not only makes sense but also is authentic.  And, this shared identity makes it appropriate to ask members themselves to make personal (financial) contributions to the collective effort to keep each other employed.

For Levy, trying alternatives to layoffs is not a new idea; it’s a practice that has worked successfully for him, in this organization, before. Moreover, approaching these alternatives in an open process that involves employees in generating, choosing and implementing alternatives isn’t new either — this process is similar to the process through which Levy lead the BIDMC to achieve financial stability seven years ago. So maybe for Levy and the BIDMC, their approach this time is really a return to ‘best practices’ and ‘core competencies’.

Even for organizations that don’t have a similar shared history, shared trust and shared identity, alternatives to layoffs can be a leadership opportunity. Managers, executives and leaders who have not built this competency, this level of trust or these relationships with employees shouldn’t assume that, without this foundation, it’s not worth trying alternatives to layoffs. After all, it was through their approach to a similar situation, albeit one that was less global, that Levy and the employees of BIDMC created the foundation they can build upon now.

Alternatives to layoffs are more than just a way to cut costs without cutting jobs. In addition to reducing costs, these alternatives– rightly unfolded– can help to build the organization and employees’ commitment to the organization.

That’s the picture from the executive’s point of view. How do the employees feel about this approach to finding alternatives to layoffs? Does this feel like real "leadership"?  Check out the 65+ comments on Levy’s blog, and the 718+ comments on the Boston.com article, to hear from the employees themselves.

Hat tip to Cali Yost for alerting me to the Globe article, to Michael Roberto for reminding me of the HBS case, and to Kevin Cullen and The Boston Globe for highlighting this act of collective leadership at BIDMC.

1. Ensure that management’s work serves a higher purpose.
Management, both in theory and practice, must orient itself to the achievement of noble, socially significant goals.

2. Fully embed the ideas of community and citizenship in management systems.
There’s a need for processes and practices that reflect the interdependence of all stakeholder groups.

3. Reconstruct management’s philosophical foundations.
To build organizations that are more than merely efficient, we will need to draw lessons from such fields as biology, markets, democracies, and theology.

4. Eliminate the pathologies of formal hierarchy.
There are advantages to natural hierarchies, where power flows up from the bottom and leaders emerge instead of being appointed.

5. Reduce fear and increase trust.
Mistrust and fear are toxic to innovation and engagement and must be wrung out of tomorrow’s management systems.

6. Reinvent the means of control.
To transcend the discipline-versus-freedom trade-off, control systems will have to encourage control from within, rather than constraints from without.

7. Redefine the work of leadership.
The notion of “the” leader as a heroic decision maker is untenable. Leaders must be recast as social-systems architects who work to enable innovation and collaboration.

8. Expand and exploit diversity.
We must create a management system that values diversity, disagreement, and divergence as much as conformance, consensus, and cohesion.

9. Reinvent strategy making as an emergent process.
In a turbulent world, strategy making must reflect the biological principles of variety, selection, and retention.

10. De-structure and disaggregate the organization.
To become more adaptable and innovative, large entities must be disaggregated into smaller, more malleable units.

11. Dramatically reduce the pull of the past.
Existing management systems often mindlessly reinforce the status quo. In the future, they must facilitate innovation and change.

12. Share the work of setting direction.
To engender commitment, the responsibility for goal setting must be distributed in a process where share of voice is a function of insight, not power.

13. Develop holistic performance measures.
Existing performance metrics must be recast because they give inadequate attention to the critical human capabilities that drive success in the creative economy.

14. Stretch executives’ timeframes and perspectives.
Discover alternatives to compensation and reward systems that encourage managers to sacrifice long-term goals for short-term gains.

15. Create a democracy of information.
Companies need holographic information systems that equip every employee to act in the interests of the entire enterprise.

16. Empower renegades and disarm reactionaries.
Management systems must give more power to employees who have their emotional equity invested in the future rather than in the past.

17. Expand the scope of employee autonomy.
Management systems must be redesigned to facilitate grassroots initiatives and local experimentation.

18. Create internal markets for ideas, talent, and resources.
Markets are better than hierarchies are at allocating resources, and companies’ resource allocation processes need to reflect this fact.

19. Depoliticize decision making.
Decision-processes must be free of positional biases and exploit the collective wisdom of the entire organization.

20. Better optimize trade-offs.
Management systems tend to force either-or choices. What’s needed are hybrid systems that subtly optimize key trade-offs.

21. Further unleash human imagination.
Much is known about what engenders human creativity. This knowledge must be better applied in the design of management systems.

22. Enable communities of passion.
To maximize employee engagement, management systems must facilitate the formation of communities of passion.

23. Retool management for an open world.
Value-creating networks often transcend the firm’s boundaries and can render traditional power-based management tools ineffective. New management tools are needed to build complex ecosystems.

24. Humanize the language and practice of business.
Tomorrow’s management systems must give as much credence to timeless human ideals such as beauty, justice and community as they do to the traditional goals of efficiency, advantage, and profit.

25. Retrain managerial minds.
Managers’ traditional deductive and analytical skills must be complemented by conceptual and systems-thinking skills.

Here’s a nifty psychological tidbit for you, from the social research site ContextsDiscoveries , that triggers an interesting organizational question ….

It’s not just life experiences that affect mental health, but also how they are resolved. While African Americans tend to have more negative events, they also tend to have more resolutions, thus giving them more positive mental health.

If African Americans tend to be more successful at resolving negative life events, then would "Black" organizations — organizations whose cultures reflect the values, norms and practices of Black Americans — be more successful at coping with negative organizational experiences?

As the authors explain:

“We noted that personal enhancement and growth may occur because successful resolutions often involve a new behavioral or cognitive response that is added to the individual’s armamentarium of coping skills, and because the experience contributes to one’s perception of self as the kind of person who can effectively deal with such difficulties—-a perception that will tend to motivate rather than undermine future coping efforts.

It’s not just acquiring an additional coping skill, but establishing an identity as ‘the kind of person / or organization that can cope with tough situations. Hmm.

That would be a nifty competitive advantage.

Citation:
“Major Life Events: Their Personal Meaning, Resolution, and Mental Health Significance”, John R. Reynolds & Jay R. Turner, Journal of Health and Social Behavior, June 2008, p223-237.