Tuesday, January 27, 2009

Employments leaving work

It is natural, in a blog dealing with management issues, to deal also with employees who leave. I admit, that I always was too frightened to write a post on this A live blog is not a book on the shelf. I knew that no matter when I will decide to write about leaving employees, the timing would be bad. Once, an employee decided to leave; some other time, someone did not fit in and we announced that s/he should leave. Even if not all these situations are relevant, I may put the existing employees under pressure, just by writing such a post, fearing from some unannounced plans.
Yet, I believe there is place for such a post, as the blog tries to examine all aspects of management. Therefore, I sat and started writing.

There are three types of situations of leaving employees: There are employees who retire; there are employees who leave in order to work in some other organization; and, there are employees who we decide to dismiss. An organization who nurtures a close relationship between the organization and the employees, hurts when the employees leaves, no matter what the circumstances are. An uncomfortable feeling exists among everyone: The employer, the employee who is leaving, and all surrounding employees.

Yet, different emphasis should be put in each of the three types of leaving employees:

When an employee retires, the main risk, organizationally speaking, is loss of knowledge. An employee, who retires, in most cases, has spent many years within the organization. In most cases the knowledge s/he has accumulated, is unique and valuable. It is true, that within the many years of this employee with others in the organization, s/he had built relationships. However, toward this coping, both the leaving employee and his/her friends in work, have time to adjust. From the day we join an organization, we know, that the day will come, and we will retire. Nowadays, that people live longer, and turn older later, many people wait for this opportunity of retirement and plan carefully their second life, after retirement. The emphasis, as has already been noted, is on knowledge retention. The organization has to prepare itself and manage a well order process: deciding what knowledge will be prioritized for retention; deciding what will be documented, and how; deciding what will be accessible to all in an organizational website; deciding what will be transferred to other employees through conversations; deciding whether one employee will fill all job components, or will the role be divided down and passed to several employees. Such a process should be managed. The responsibility of the direct manager of the leaving employee, includes: Initializing the process, prioritizing what knowledge is to be kept, and more important, what knowledge can be dismissed (one can never pass all knowledge). The manager has to decide who will take in place (one or more); how soon should the process start before the employee leaves; and, when the knowledge transfer takes place, to see that it actually happens in the right quality and pace.

We should not degrade the complexity and importance of this process. We are speaking about employees who work many years in the organization, and knowledge retention is not as simple as we wish. Knowledge transfer will not happen by itself. We must understand, that if we even do everything possible, the expertise is lost, and parts of the knowledge remain, The objective of a knowledge retention process, is too retain, as much as possible of the knowledge. In many cases, the manager is not aware enough, and knowledge transferring takes place, but not in the right pace or effectiveness. There are written methodologies how to handle this issue, and I will not elaborate about the "how", just say- it must be done.

There are organizations in which the retiring employees turn to be consultants after they leave. In many cases, these employees earn more as consultants, and managers have to understand that this is not a healthy situation, as these employees tend to keep their knowledge to themselves in the years toward retirement. Our dependency grows bigger every generation.

There are employees, who leave the organization, on their own will. It is very common, as we witness nowadays, changing careers and changing places of work. Yet, organizations feel uncomfortable from these moves. The employees who stay in the organization, feel that maybe, outside there are better opportunities, and maybe they are mistaken for staying. The managers find it hard to accept. I once had a manager who was insulted from every employee who decided to leave her. After their decision to leave, she remembered mainly their faults, and we all have faults, even if we do a good job. Israel is a rather small country, and in such a market, people probably meet again in conferences, exhibitions, as suppliers or customers. In some cases, they even find themselves working together again, in some other place. Also if not, the manager has to know to control his/her feelings even if they feel betrayed from the move. Business-like behavior and no expression of positive feelings are the best in this situation. Even if the employee left after the organization has won a new project depending on this employee; even if there was an understanding with this employee on a planned promotion, leaving others behind. Behave business-like and express no bas feelings. Do not say any bad word, not even to the other managers. Of course not to other employees. Difficult, but recommended.
In this situation, knowledge has to be transferred, but it usually is much easier than in cases of retirement.

The most difficult situation, as I see it, is when we as managers, fire an employee. Sometimes such a situation is a necessity, whether because of economic circumstances or because the employee is not the right man for the right job. Certain issues should be addressed in this case:
First, we as managers must consider whether to enable the leaving employee stay in the office after the announcement, or do we disconnect him/her immediately asking them to take their belongings and leave. The answer is complicated and varies from one situation to another. It depends if the employee works in connection with customers and how the immediate leaving will influence the organizations connection with them; it depends how unique is the knowledge the employee carries and how critic is the knowledge retention process. It depends on the risk of knowledge theft by the leaving employee; and it depends, on how immediate leaving will ease the departure, or make it harder.

Another important issue to be addressed is how to prepare an employee to this traumatic situation?
There is no doubt that every dismissed employee experiences a trauma, at some level. I was once dismissed, and I believe this a situation that I will not ever forget. Above the insult, work is our major source of income and stability. Without work, most employees cannot continue. When we here such an announcement of loosing our job, we feel as in an earthquake. What can I suggest as an employer? When possible, prepare the employee before. If the circumstances are of someone less suitable for the job, speak about it a few times with the employee, urging him/her to improve explaining implications of not improving. If they improve- everyone wins. Even if not, at least we partly prepared them for the coming. I do admit, this is not as easy as it may sound. I find people having a hard time passing the message. They try to be nice to the person, with whom they are speaking with and tend to soften the message, leaving the employee with a different understanding. The receiving person, on the other hand, also may misunderstand the message even if things are said, again, as it is not a pleasant message. I do not have solutions for all cases. I just think that passing the message and preparing the employee towards the announcement of him/her leaving. If I did not speak myself with the employee about leaving, I call to say good-bye and good luck. I find this behavior very important and assisting.

Another issue when we dismiss an employee, is how to communicate the leaving to customers and suppliers. How do we communicate it to other employees? Also here, I must admit, there is no one simple answer, but one leading thought: We must be honest, while keeping the employee's honor. It is important to communicate something true, yet leave respect. We can give part of the details, yet we must speak. Customers will understand.

It is important to communicate the announcement to all other employees, almost immediately. I do this, by writing an email at the end of the day in which the announcement took place, A formal, yet supportive email, speaking about the circumstances, and expressing my real sad feelings.
We must remember, that things that we do not communicate, will be passed by rumors. It is also better if we pass the message and leave as less as we can in the open.
In rare situations, I even spoke about the situation with groups of employees, taking advantage of existing staff meetings, enabling people to share their feelings. It all depends on the situation.

The last question to do with this issue concerns knowledge transfer. Most dismissed employees will not find it appealing to help the organization preventing the knowledge loss, and to transfer on what they know. As this move is a planned one, part of the planning has to speak with the direct managers of the intended to leave employee, and decide how to handle the critic knowledge, parts of it shared even before the announcement takes place.

The issues are out there, they are not simple, and therefore I find myself writing such a long post.
If I have to sum it all in one sentence- knowledge to the organization, honor and sensitivity to the employee.


Tuesday, January 13, 2009

Organizational Structure

Henri Fayol, a French management theoretician, defined, already in 1916, fourteen management principles that have turned to a well-known list for all managers. Among the list are principles of rewarding, the management chain, the fraternity of the group, and more. One of these principles, that we find discussed also by many other management theoreticians, is the principle, that every employee has one manager instructing him and in charge of him. This sounds as a very natural principle; multiplicity of managers for a single employee can confuse him, can decrease efficiency (caused by holes in time when each manager is partial in charge) and can raise organizational political problems when conflicts develop. The list of potential problems is long, and it is reasonable therefore, that organizations were based many years on a hierarchical structure.

However, in the past years new needs develop questioning the correctness and fitness of the classical hierarchical organization structure for all purposes and for all circumstances. As many workers are knowledge workers, an important parameter influencing both on the needs and on the implacable solutions.
Knowledge workers are workers that knowledge takes a significant place in their activities. Developing the knowledge is a central component of their professionalism.

How does such a worker learn and develop his knowledge? Knowledge develops through personal experience, through team working, and by having a guiding manager pushing one up:
Personal experience exists, independent of the organizational structure. If we want to leverage it, it is preferable that the experience is diverse.
Working in teams enables us to learn from our colleagues who may have different education, skills and characteristic. The organizational structure does have influence on teams in which each employee is assigned.
The manager and his ability to guide are surely influenced from the organizational structure.
All three are intensified when the organizational structure is not hierarchical, when the worker has an opportunity for more diverse activities, taking part in several teams (including different people) and working with several managers, each manager adding his observation.

Based on these, I have set, several years ago, a heterarchy organizational structure, in the company, which I manage. The Internet defines a heterarchy organizational structure as a form of organization resembling a network or fishnet, where authority is determined by knowledge and function. Such a structure resemble the matrix known organizational structure (also called "M-form"), but is rather loose. It is a network, but not as strict as the classical matrix having employees assigned to two well-defined dimensions of managers. I have adopted this structure, and it may seem like cognitive dissonance, but I see its advantages every day.

The managers in my company each have a different combination of education, experience, skills and character, all relevant to the profession in which we specialize. In each project, we decide ad-hoc, which manager will lead and who will be included in the team of work. We will always recommend part time participation, enabling the team workers to continue their participation on other projects at the same time.

In practice, this project assignment method brings to a situation, in which every employee experiences diverse activities, is assigned to several teams, in which he learns and shares every time, his knowledge with different people. Furthermore, the professional manager varies from project to project, and the employee benefits learning from the experience of various managers (usually more senior).

Six month after I ruled this organizational structure, I found out its name (the heterarchical organizational structure) and learned that a researcher, named Hedlund, wrote an article, already in 1994, claiming that knowledge based units, as R&D, should be managed according to this structure. Hedlund defined principles for heterarchical management, and coined this method "the N-FORM", N standing for novelty, or new.
The novelty of this model compared the classical M-FORM, is:

  1. Combination of issues and people in the N-FORM, compared to defined distribution in the M-FORM.
  2. Temporary constellations of people and units in the N-FORM, instead of stable fix organizational structure in the M-FORM.
  3. Importance of staff in "low" organizational levels and importance of dialog between functions and groups in the N-FORM, rather than managing the interface in high management levels, in the M-FORM.
  4. Wide organization communication in the N-FORM, instead of top-down communication in the M-FORM.
  5. A role of catalysts and architects of communication infrastructure, defined for the higher management, preserving the investment in knowledge in the N-FORM, rather than guiders, controllers, monitors and resource allocation definers in the M-FORM.
  6. A heterarchical organizational structure.

How do I protect my employees from confusion, inefficiency and organizational politics? I admit there is no full answer, but these challenges are addressed by assigning one (managerial) manager for each employee, to whom this employee reports regarding vacations and sickness, with whom s/he consults with when some high-level conflict rises, and with s/he speaks when they need to share their thoughts or feelings.

As everything in life, there are no advantages without disadvantages. In order to help the suggested method actually work, good work-team between the managers must exist. They must know how to cooperate; moreover, they must show good will. When good will is missing, the difficulties grow bigger, and the advantages are not as promising.

When managers work in cooperation, everyone benefits. The employee benefits from improving development of knowledge and professionalism, as to the diversity in all dimensions described; the organization benefits improved quality.

For the time being, I am an exception in this method of management. It is interesting to know how organizations will structure their knowledge-based units ten years from today.
Until then, let us wait with patience.