Why we cannot learn a damn thing from Semco, or Toyota

Niels Pflaeging (@NielsPflaeging)

September 14, 2015

From linkedin.com

The future of work is already here. Not only in the minds of some outstanding thinkers, high-minded idealists, quirky innovators and lofty utopians – or people like you who are reading this blog! No, the future of work and organizational leadership is tangible. It is out there in the real world: You can find it in the practice of a few dozen extraordinary, pioneering organizations that have cracked the code, solved the puzzle, removed all doubt. I’m talking about  the Toyotas  of this world. The W.L.Gores, the Southwest Airlines, the Googles, the Handelsbankens, the Semcos. Companies like these have been doing things differently for 20, 30, 40 or even 50 years, in the case of Toyota. Yeah, we heard all that before! you say? Then I ask you: And what have we really learned from these incredibly great companies?

For over 15 years, I have researched, thought, spoke and written about what I like to call  organizational transformation . By that I mean the transition  from pyramid to peach ,  from centralization to de-centralization ,  from top-down management to outside-in leadership . I have written entire books and papers filled with the stories of the Toyotas of this world. I have explained their cases and described their unusually smart practices, their principles and discoveries on the way of transformation. I have documented, analyzed and put into context their unique characteristics. Many other authors and experts have done similar stuff. However: I cannot honestly claim that these highly impressive case stories have  worked  for my audiences or clients as much as I would have hoped. Sure, people feel somewhat  inspired  and  motivated  when hearing about the amazing things that happen at Valve, Zappos, Netflix, MorningStar, Favi or DaVita. And when they learn about how much management stuff they might previously have considered inevitable simply doesn’t exist within those pioneer organizations.

At some point, however, I stared asking myself why these wonderful firms have not succeeded in persuading others to follow their example. Why has almost nobody dared to follow in their footsteps? The following anecdote about Ricardo Semler, owner and chief visionary of the trail-blazing  democratic  Brazilian company Semco may illustrate the problem: A few years ago, after two international bestselling books and some 20 years of traveling the international  speaker´s circuit , Semler got so frustrated about nobody following the example set by his company (apart from one small Indian firm) that he took every single copy of his books he had at his home, including all translations, into the garden – and set them ablaze.

To be sure: Everyone is amazed by those few exceptional organizations They are WOW!, right? But that another company follows their lead seems to be a different matter, entirely. That doesn’t happen very often, if at all. It is no coincidence that we are constantly calling these firms  outliers ,  radicals ,  ground-breaking ,  extraordinary , or  exotic . We remind ourselves that they are somehow not from this world. They stake out land that appears unknown and foreign to us.  That would never work for us here,  we say.  We’re just not ready for that.  Or  I could never swing that with my team.  and  We went to visit them and had a look; it sure was fascinating, but their approach is just not right for us.  How often have I heard those kinds of comments. The most horrific quote of all being:  It’s a long, long road to really get there

For a long time, this seemed to be a contradiction to me. On the one hand, the world of the pioneers really exists – like some continent of copious vegetation. In most people’s perception, however, there seems to be no way of entering that secret garden. That land of milk and honey remains out of reach, and foreign, too. In the meanwhile, pioneers like Toyota, Gore, Sweden´s Handelsbanken or Germany´s dm-drogerie markt keep telling us that there is, really, nothing magic about what they are doing!

And then it hit me. The trouble with embracing the examples of Semco, Toyota and other pionieers like them may have nothing to do with the pioneering organizations themselves. Nor with what other people think about them – those  other people  being the majority of bosses, managers, company owners and employees. Managers may neither lack the courage to transform, nor are they likely to be all scared about the losing control, or the unknown. Maybe, I thought, maybe we cannot learn from pioneers like Semco or Toyota because the good example is not the point!

What I mean is this: When talking about organizational leadership, even the best example just doesn’t help! At least not as long as one, almost magic ingredient for change, or transformation, is missing. And that magic ingredient is our image of human nature, the way we think about people around us, and what drives them. Not just the trust we place in other people is key, but whether we trust them to be self-motivated, driven by the need for self-fulfillment, and capable of self-organizing within boundaries and team settings. One of my heroes, organizational scientist Douglas McGregor was the first to figure out the power of that crippling, and misleading image of human nature that we hold in our heads and hearts about other people, around 55 years ago. McGregor then coined it  Theory X . The puzzling truth is that, after all this time, the mistaken idea of Theory X thinking still firmly remains part of our belief systems. Even through Theory X works against our best interest, in keeping our organizations stuck in command-and-control mode, driven by top-down, tayloristic management.

What we should have learned from McGregor and from his denouncement of the Theory X prejudice, is that neither managers nor employees are the problem when it comes to org change and transformation. The problem is our thinking, really. Our flawed assumption about what makes other people tick. About how the physics of motivation, leadership and change work. Theory X makes us believe that  first our people have to change, and then we can change the system . And that is precisely upside-down. The habit of mistrust that is Theory X feeds from our observing other people´s behavior within given contexts. As long as we operate in command-and-control mode, people will usually show obedient, dependent, or even idiotic behavior. Only once we change the system away from command-and-control, people can develop intelligently aligned behavior patterns, such as those associated with self-organization, empowerment and entrepreneurial responsibility. The problem is that each of us individual keeps thinking:  Yeah, yeah, I got that, things could be way better. But my peers, colleagues and bosses obviously haven’t gotten it at all – just look at how they behave! Until they change, we cannot change anything!  Until we overcome this pattern of thinking, which I call the  individual-smarts-collective-stupidity trap , the world of alternative, superior org models and transformation will remain a distant dream of a better future.

In the meanwhile, ironically, it is actually possible that the pioneers of better org models may even hinder organizational progress and transformation, overall, by being turned into an case for stagnation for other organizations that are stuck in command-and-control.  Look, what happened at Semco and Toyota was possible only because they were already prepared to make it work! Because they had a different kind of human material there that made it all possible. We cannot do that here – our people are not prepared the way they were!  And so the good example becomes a barrier to change.

There is no bridge to the promised land of better, bolder, more agile and contemporary org leadership. No one will ever build a bridge there. And nobody really needs that kind of bridge at all. Because we can all beam ourselves there. Our organizations can be flipped into that land of milk and honey, within the twinkling of an eye, as soon we all stop thinking about other people as  Xers . We do not need more examples for this, we need to correct our thinking. As for Semco, Toyota and the likes: Their example remains noteworthy and potentially inspiring for all of us. Their wonderful stories and practices will remain impossible to emulate, however – as long as we keep carrying around fundamentally screwed-up notions about other people´s human nature.