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Executive Times |
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2005 Book Reviews |
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Joy at
Work: A Revolutionary Approach to Fun on the Job by Dennis W. Bakke |
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Rating: ••• (Recommended) |
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Click on
title or picture to buy from amazon.com |
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Righteous Former CEO of
AES, Dennis Bakke, provides a combination of memoir
and advice in his new book, Joy at
Work: A Revolutionary Approach to Fun on the Job. Bakke
can come across as stubborn and somewhat righteous in his exploration of the
importance of affirming and practicing values in the workplace because of the
importance of those values, not because such practice leads to specific
results. At times, Bakke seems naïve, and at other
times, he comes across as honest and firm in his methods and practices. Much
of what Bakke created at AES has been dismantled
since his departure following declines throughout the energy sector following
the collapse of Enron. To some degree, Joy at Work is Bakke’s
defense of his methods. Here’s an excerpt, from the beginning
of Chapter 5, “Scorekeeping, Accountability, and Rewards,”
pp. 109-113: My view on accountability may be the least understood part of
my vision of a better workplace. Freedom is the key to joy at work, but
getting feedback on performance and taking responsibility for results are
also crucial. Scorekeeping is tracking what happens as a result of decisions
and actions. Accountability means taking responsibility for outcomes. I have
noted that keeping score is important to the success and enjoyment of games.
The same is true in workplaces. During
my only face-to-face meeting with Peter Block, who influenced me greatly
with his writing on stewardship, accountability, and empowerment, we got into
a discussion of how best to judge the performance of subordinates. He told me
he had once been an advocate of “annual reviews” in which the boss would meet
with a subordinate and go over the previous year. One day, in a moment of
reflection, Block imagined calling his wife into his office at home. “Sit
down, honey. It’s time for your annual review.” The absurdity of this
imaginary session prompted him to change his mind about reviews. He realized
that the relationship between supervisor and subordinate should be closer to
a partnership of equals. He suggested a process within organizations that
starts with the subordinate doing an extensive self-review. The leader’s role
in this approach is much diminished from that of the typical supervisor-led
review. The boss becomes primarily a commentator, questioner, encourager,
and, to a lesser extent, an evaluator. I
decided to try a variation of this approach with my senior team. Fourteen of
us gathered at the home of one of the team members. One by one, each of us
reviewed our own performance during the previous year. Most people outlined
their successes, failures, and problems, as well as their goals for the year
ahead. In nearly every case, four or five would offer a comment or question
something the person had said. Sometimes they reinforced the person’s
self-assessment; other times they suggested a problem or an accomplishment
that had not been mentioned. We
held this type of session annually until I left the company. It became one of
my favorite evenings with the senior team. There was not, of course, perfect
honesty. Light did not shine on every issue. It was much too general for
those who preferred specific quantifiable goals, but it was enormously
valuable in other ways. It honored each individual as an important member of
the team, regardless of title or status or compensation. It allowed us to
show our respect for one another. It brought us closer together as a group.
At the same time, I got a good sense of how people thought they had
performed—and whether their self-assessments squared with the views of their
colleagues. I
was a full participant in these discussions. I reviewed my own performance
and chipped in comments about my colleagues. I took notes and afterward wrote
a report summarizing the reviews. That report was submitted to the board of
directors and to the compensation committee, which found it helpful when
evaluating organizational changes and setting compensation. Doing annual
reviews in a team setting was far more revealing and effective than having
bosses do individual assessments of their subordinates. As Rob Lebow and Randy Spitzer wrote in Accountability:
Freedom and Responsibility Without Control, “Too often, appraisal
destroys human spirit and, in the span of a 30-minute meeting, can transform
a vibrant, committed employee into a demoralized, indifferent wallflower who
reads the want ads on the weekend. ... They
don’t work because most performance appraisal systems are a form of judgment
and control.” This
approach did not always translate well in other countries. Paul Hanrahan, the humble, courageous, and gifted leader who
became CEO of AES when I left, was leading our China business when I started
this approach to annual reviews. He mentioned to some of his Chinese
colleagues that he was heading back to the home office for a self-review of
the year. Did they have any suggestions? They were horrified. “Self-criticism
is very dangerous,” they said, remembering the experience of their parents
not many years before under communism. “Don’t brag about your great
successes. They will not believe you, and your credibility will be destroyed.
Don’t talk about our problems or take responsibility for mistakes because
they will blame you and you will get fired.” “What do you suggest?” asked
Paul. “Try using lots of statistics. Statistics are good,” was their sincere
and very concerned reply. If you have ever listened to a Chinese leader’s
speech, you will realize how widespread this simple advice must be. After
In Search of Excellence was published, many organizations, including
AES, asked themselves some tough questions. What are we trying to achieve?
Where do we want to be in five years? What kind of place do we want to
become? What is the bottom line? The search for answers revitalized countless
large organizations—companies, nonprofits, and governments—and helped them
achieve higher levels of performance. At
AES, the primary reason we existed was to help the world meet its electricity
needs. To track our progress, we started calculating the number of people
who were served by our facilities. By the year 2000, AES served the electricity needs of more than 100 million
people—not bad for a company that had only been in existence for two decades. But
offering an important service or serving large numbers of customers does not
mean that a company will be deemed a success. Increasingly, success is
defined by purely economic measures, especially shareholder “value”—as if a
company’s highest purpose were pumping up its stock price. What
about stock price as a measure of performance? Few non-investors believe it
says much about actual performance, especially in the short term. It’s worth
remembering, too, that it’s a yardstick that can be applied only to publicly
traded corporations. This is a small minority of the universe of organizations
that need a way to judge their performance. But despite its shortcomings,
stock price is not only used as a measure of success but often the primary
one. Even Jim Collins uses stock-price gains to separate the “good” companies
from the “great” ones in his book Good to Great. I
do not recommend using stock-price changes, either up or down, as a
significant measure of performance, even economic performance. Stock price
puts far too much emphasis on one stake-holder—the shareholder—and is driven
by external factors that have little to do with internal economic
performance. Its use leads to poor decisions by people who work in the
organization, and, as I will argue later, it distorts the real purpose of a
company and discourages a more balanced approach to measuring success. Cash
flow, income, and balance sheets are more reliable economic measures, but
even these can be presented in a way that blurs the overall performance of a
company. The
scoreboard for tracking success at AES was designed to buck this trend. Roger
Sant first suggested that compensation for senior
leaders be based half on whether an executive advanced the organization’s
values and principles and half on technical performance, which included
protecting the environment, meeting safety standards, developing new
business, and hitting ambitious targets for earnings and growth. I suggested
that this “50/50” design be adopted
by all leaders and teams throughout the organization. A good way to see what
an organization really stands for is to examine the criteria used to
determine executive compensation. You quickly find out whether companies put
their money where their values are. We
evaluated performance on “technical factors” in a straightforward way. We
kept track of emission rates of pollutants at every plant. We compared these
emission rates with the limits specified in our permits. We also compared
them with the emissions of similar plants operated by U.S. companies, even if
the plant was in South America or Asia. We established a process of regular
internal audits by task forces. Similarly, we tracked all safety incidents
and accidents. Results were compared with those of U.S. companies in our
industry. A rigorous internal audit process was also in place to review our
safety record. Financial
performance was tracked using Securities and Exchange Commission standards
and generally accepted accounting principles. Even before going public in 1991, the company adopted accounting
and financial reporting standards that conformed to those used by publicly
traded companies. In addition to independent audits by a major public
accounting firm, AES organized task forces to do internal audits. We
had the hardest time measuring success in business development. While we
certainly celebrated “wins” and mourned “losses” in creating business
opportunities, it was difficult to assess in a timely fashion the long-term
value of new undertakings. For example, it sometimes took four or five years
to determine whether a new project was an economic success. Timely evaluations
of noneconomic aspects of new businesses were
troublesome as well. Judging
performance on our values and principles was more subjective and required
greater creativity. In the first place, we had a difficult time finding a
basis of comparison. No other organization put as much weight on these
factors as we did. Among the companies that did stress values, few had
methods for determining whether individual employees were practicing them.
Because our values were so central to the way we did business, we had to come
up with a tool for evaluating our employees. Executives looking to differentiate
themselves and their organizations may find some useful ideas on the pages of
Joy at
Work. Few workplaces operate the way Bakke
describes, but if many of the outcomes Bakke
describes in this book are accurate, those executives looking to support a
motivated and happy workforce will want to adopt his approach. Steve Hopkins,
June 25, 2005 |
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Buy Joy at
Work @ amazon.com |
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ã 2005 Hopkins and Company, LLC The recommendation rating for
this book appeared in the July 2005
issue of Executive Times URL for this review: http://www.hopkinsandcompany.com/Books/Joy
at Work.htm For Reprint Permission,
Contact: Hopkins & Company, LLC • E-mail: books@hopkinsandcompany.com |
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