Now if experience tells us this is so (and certainly Alfie Kohn’s research showed that one thing that bonuses and other rewards don’t do is to lead to long-term improvement) how should we read the statements that have been made by the top British Institutions that if they don’t pay large bonuses their top earners will go and work for European or American Companies.

Put these two ideas together (Greedy People and Go Elsewhere) and a super strategy for British Companies would be to – wait for it – stop paying bonuses.

Bonuses might attract top earners but experience (with the credit crunch etc) is telling us that these top earners do not benefit their organisations  IN THE LONG TERM (and therefore do not benefit any of their stakeholders in the long term either).

So are there some British Companies out there brave enough to stop paying ‘performance related’ bonuses and to see what happens? The consequences could be very good! Not a loss at all but a gain.

All the greedy earners who don’t care a stuff about the customers, will go to the competitors (hooray I hear from all those people who have suffered from all this miss-selling), leaving space for a new type of entrepreneur to take up these jobs within companies – (those with an innerpreneur mindset). Would not it be good for the long-term success of financial institutions for example if all the work was done by employees wanting to do the very best they can to give good service for past, current and future customers. Unfortunately as Kohn showed many years ago, big ‘carrots’ move the focus away from the service. The focus in the bonus culture is “what do I need to do today to make my carrot bigger (and also give me bragging rights to the biggest carrot)”. The focus should be of course be “what do I need to do today to really help my customer?”

So should not our politicians be suggesting that bonuses simply STOP in order to make our Institutions better? This then leaves one question. If such an organisation goes on to make increased profit in a ‘no bonus for performance’ model, how do all the employees get to share in this success as an intended consequence? (Answers not on a postcard, but please post your suggestions here)

What is a fair way to keep the focus on customer service, and to share in the benefits that accrue from being a truly long-term customer-focussed (as opposed to a bonus-focussed) company?

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The concepts and research from the “new sciences” challenge our current thinking (theories-in-use) and challenge some sacred beliefs and ethos about how best to do good business. Creation companies (whether they realise it or not) embrace new psychology and new science ideas. This thinking is in line with other iconoclast thinkers of our time such as, Russell Ackoff (Systems Thinking), Edward de Bono (Design Thinking), Mihaly Csikszentmihalyi Flow Thinking), and Eric Jensen (Brain-Based Thinking)

Let’s look at some of the major differences between  Compliant and Creation Companies:

COMPLIANT Companies tend to have the following characteristics:

• Leadership Style that is Command and Control
• Order maintained by Policies and Rules
• Competitive Internal Departments leading to sub-optimisation
• Focus on Activity and the need to work faster, and measuring the things that can be easily measured but may not be that important
• Asking people to improve but not giving them the method or means by which to do so (carrots and sticks offered rather than a method for improvement)
• Lack of Trust (Old Psychology suggests that people cannot be trusted -extrapolated from the 1% or less who can never be trusted)
• A Blame (and Fear) Culture. Asking, “who went wrong”  (If things are not working, look for what the people are doing wrong and then give them a rollicking). Little opportunity to learn in a Blame Culture
• People (particularly the leaders) confuse models with reality
• The valued thinking is “Expert Mind”
• Risk Avoidance
• Black and White Thinking (shades of grey are discouraged)

The focus of Compliant Companies is on “conformance”. Compliance is maintained through the rules and structures, the management mechanism is mainly command and control, there is a blame culture for mistakes. Conformance (to standards and best practice) is a cultural principle.

The focus of Creation Companies differs, in that the people have guiding principles rather than rules, there is a noticeable freedom from command-and-control mechanisms, there is a no-blame culture, and there is continuing positive change and joy in the work.

End Piece: And of course Creation Companies will know about and understand the factors that encourage humans to be creative. The next posts in this series look at some additional to creativity ‘Identifying and Nurturing Personal Creativity’ and ‘The Circumstances for Creativity’. The real Creation Companies are also likely to be very aware that the reward culture sabotages creativity and also the consequences of paying large bonuses to make things happen (unfortunately they make the wrong things happen and select the wrong people to best do the intended work)

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