The Sweetness of Freedom

Today marks a special day. This day in history, 31 years ago, a trusted mentor of mine landed in the US. He didn’t have much money in his bank account, but he craved the freedom and since then has forged his own path. While this story feels especially personal, it’s not all that uncommon.

For those of you who have been studying MBM for awhile, you’ve seen the arguments about free societies: people are better off — they tend to live longer, healthier, and happier lives. That’s true, but it’s incomplete. When individuals are free to pursue their own goals and objectives, have true ownership over their actions and thoughts, and enjoy the fruits of their accomplishments, they are more likely to feel the true joy of being oneself. For those of you familiar with Abraham Maslow’s work, it’s that elusive self-actualization. The depth of what one can experience in a free society can’t be expressed in numbers or data.

In a free society, individuals get to answer questions about why and how they should work. They determine what to consume and what the save. Individuals get to forge their own path. Perhaps John Tomasi says it best:

The particular pattern of decisions one makes in response to these questions about working often goes a long way to defining what makes one person’s life distinct from the lives of other people. A society that denied individuals the right to make decisions regarding those aspects of their working experience would truncate the ability of those people to be responsible authors of their own lives. Indeed, denied these fuller freedoms…, citizens would no longer be authors of their own lives. Decisions about matters that affect them intimately would have been taken out of their hands and decided for them by others (quoted from “Why Note Capitalism?” by Jason Brennan).

I don’t want you to think that I believe free societies are perfect. They are not. No society full of flawed human beings ever will be. However, in free societies individuals have a chance of crafting their own versions of what good (or even great) looks like. In other societies, only a very few have that opportunity and it usually comes at the price of great sorrow for others.

So on this day when my friend and mentor arrived in the US ready to grasp the opportunities in front of him, I hope you take a moment to reflect on the beauty of what free societies offer. The material benefits are good but they are only a fraction of the true prosperity free societies generate.

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Ownership

Often when discussing the idea of ownership and property rights in a classroom setting, it seems silly — almost too straightforward. Most people in a theoretical sense will agree that people take better care of what they own than what they don’t own. Then for some reason it starts to break down. Ask a typical person what to do about a diminishing precious resource and many will be quick to advocate laws, regulations, rules and even government take over.

Yet if you study history, you’ll see that often the opposite is true – give individuals property rights and the resource is preserved. The most vivid stories are ones about environmental issues, like the elephants in Africa. A more recent example is of the rainforests in Brazil. Here’s an excerpt from a recent paper:

The best way to protect rainforests is to keep people out, right? Absolutely not. The best way to keep the trees, and prevent the carbon in them from entering the atmosphere, is by letting people into the forests: local people with the legal right to control what happens there.

It makes sense if you understand private property rights and what owning something does. For most people, the sense of ownership encourages a natural desire to preserve for the future, cultivate and foster growth, and generally to care for something as if it was an extension of oneself.

Let’s play with translating these ideas into the organization for moment. Of course employees don’t technically own the organization’s resources. Employees can have a sense of ownership over what they do and the equipment they work on. Most people are okay with things like designated computers or specific tools for each individual. Yet, when it comes to that very-precious-something, I think it’s easy to fall back into detailed rules (just as it’s easy to say let’s regulate something). When you look throughout your work group, is there something that you need to take a closer look at to see if there’s a way to establish ownership instead of using a detailed set of rules? Is there something you consider very precious to the group that could possibly be dealt with in another way — a way that establishes ownership?

Ownership isn’t a cure-all by any stretch. However, like property rights are a key ingredient for free societies, so is ownership a key ingredient to applying MBM. How have you seen ownership make things run more smoothly at work? Leave your examples in the comments.

Thanks to Gary P. for sending along the article about the rainforests! 

 

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So you’re new to MBM… What now?

Lately I’ve been in a lot of meetings with people who are new to MBM. When I say new to MBM, I mean people who have worked in an MBM organization from a couple of days to up a year or so. I draw the line around a year because for most people after a year they’ve been exposed to the major MBM performance management tools (RR&Es, performance reviews, compensation reviews, coaching, etc). There’s something about seeing a full cycle of this that helps people put it all together.

The most frequently asked question from folks who are new to MBM has got to be this: “What can I do to learn more about MBM?” See some of my thoughts below (please note this is not meant to be a “must do” list, but simply some ideas). I know many of our readers have some thoughts on this, so please add to my list in the comments.

  • Study some of the basics. Read the Guiding Principles with a close eye. Use the Science of Success as a reference tool. Get curious about whatever MBM tools you use regular (ex: MBM Framework, DMF, etc).
  • Discuss MBM with your colleagues. You don’t have to be an expert in MBM to toss around ideas, look for examples, and dissect what principles to use in a given situation.
  • Find a mentor. A good MBM mentor doesn’t have to be someone on an MBM Team. It’s someone who you can bounce ideas off of, be intentional about discussing MBM regularly, and is far enough down the road on MBM learning that they can give you some guidance.
  • Ask lots of questions to your supervisor, HR folks, the MBM Team, colleagues and folks who’ve been around MBM for awhile. I have yet to encounter someone in an MBM company who isn’t willing to spend some time helping another person learn (Guiding Principle of Knowledge). I’ve even go so far as to cold-call people in other MBM organizations to ask questions, and my questions have always been received with a genuine willingness to help. Just make asking questions a habit.
  • Get comfortable with the ambiguity. Because MBM is based on principles, there are going to be many situations where many approaches could work or there may not be a clear sign to do this specific thing or do that specific thing. Even as you learn more about MBM, the ambiguity never goes away — getting used to it early can help smooth the path as your MBM knowledge/application evolves.

These are very broad. I’m hoping for some reader comments to add to this list. Even if it’s a specific question you asked, something you read or a type of conversation you had, let’s get some good ideas out there for folks trying to learn more about MBM in their early days with an MBM organization.

 

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Learning from Stories: James Bond and How Swiss Watches Survived

I think we can learn a lot about MBM® from stories and case studies – even stories that don’t happen in MBM organizations. A colleague of mine sent me a great story about disruptive innovation. It’s told in the form of a slide show you can click through at your own pace and to whet your appetite, it does in fact (as promised in the post title) involve James Bond.

So here’s my challenge to you:

  • Click on the link below and page through the story.
  • As you go through the story, think about what MBM lessons we can take from it – including any mental models that you see illustrated in the story.
  • Leave a comment (or two) with what you see.
  • If you know of a good business story with some possible MBM learnings, send it to me (or leave a link in the comments).

Here’s the link to the story. Thanks to Pablo for sending it along! I hope we can all learn something from it.

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Leadership

Leadership never seems to go out of style. Type “leadership” into any search engine and you’ll get everything from the latest blog post from an MBA student to a CEO’s manifesto to that latest sports figure memoir to who knows what. Ask 100 people to define leadership and you’ll like get 75 different answers.

One question I get fairly often is, “What makes a good leader in an MBM organization?” I don’t have a tidy answer, but here are a few things I’ve discovered are at least minimum requirements for being a good leader in an MBM organization:

  • Applying the five dimensions. If you have an MBM Framework, look at the column labeled MBM Five Dimensions and that’s a good start for some things a leader must do.
  • Holding people accountable – I know this is technically covered in the MBM Framework, but it’s a specific area that leaders must be better at than a typical employee. If leaders don’t hold people accountable (both in a positive sense and a negative sense), then this whole MBM thing just doesn’t work.
  • Consistency with MBM Guiding Principles. Leaders have to walk the walk and talk the talk. It’s not enough to just demonstrate, leaders need to be willing and able to identify and articulate when others are being consistent with MBM Guiding Principles.
  • Some level of commitment to understanding the ideas of a free society. How can you truly apply to an entire organization MBM if you don’t understand some of the fundamentals of a free society?

Those are just some high level thoughts for you. I’ve encountered a number of leaders with a variety of personality traits and personal styles that have the ability to do all of these things, so I want to steer clear of personalities and focus on behaviors and values and beliefs. What do you think makes a good leader in an MBM organization?

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Prices Convey Knowledge

As a graduate student, I spent many hours in a computer lab writing code to run statistical models (yes, it was almost as awful as it sounds). One afternoon, after hours of doing battle with my code, I picked up my plastic soda bottle and walked over to the trash and recycling cans. I stood for a moment between the two cans and then threw the bottle into the trash. A student nearby snorted. I asked if she had a problem. She said she did have a problem because I didn’t recycle my bottle, even though the recycling bin was “right there.”

Little did she know that I was an economics student who had a dedicated and intellectually honest environmentalist for a professor. Here’s a taste of some of his research.

 

 

You see one of the many problems with the way we currently recycle is that there’s no price mechanism to tell me what is worth recycling and what is not worth recycling. If I knew my empty bottle was worth 5 cents, I would have the knowledge I need to know it’s worth recycling. If I knew no one was willing to pay for my bottle, then I would know it was trash. If you look at the data, the majority of household level recycling isn’t worth it (some exceptions are shown in the video). Without prices, I have to rely on (costly) studies that cannot be up-to-the-minute. This is just one of many examples of how prices convey knowledge and when you take the knowledge away it gets difficult. Without that knowledge there is more waste than there would be otherwise.

In MBM®, we try to take a concept from free societies – like prices—and translate it into our organization. The idea of prices is one of those concepts we can’t take one-for-one into the company (imagine how awful it would be negotiate prices with your co-workers every time you needed to work together). Instead, we want to take the essence of what prices do for a free society. Prices convey knowledge. They send signals that allow us to make better decisions. If you want to get the essence of prices into your organization, you want to ensure that people have appropriate measures that help them make decisions. You want to make sure that people have the appropriate knowledge to eliminate waste and know what is valued.

What has your experience with knowledge seeking and sharing been? Do you have an example where certain measures helped people make better decisions? What else about prices would you want to bring inside the organization?

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Bureaucracy

Below is a video telling the story of a person with an entrepreneurial spirit that is crushed by bureaucracy. As you listen to the story, think about how it translates into the organization.

 

What are some ways we can eliminate bureaucracy inside the organization? What are some signals a process or procedure isn’t useful? What are signs your culture has become bureaucratic?

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How would you coach?

Below is a made up situation that represents known misunderstandings or misapplications of MBM®. Use the comments to leave your thoughts about how you would coach in this situation.

Sarah is a member of a branding team. She’s asked for you to help her with her RR&Es and has brought a draft of her RR&E Summary Document. You noticed on her summary document, one of her roles is “Brand Manager for Zepher” and an associated responsibility is “Manage Zepher Brand.”

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How to Fight Global Poverty

Here's a video with some great reminders about how amazing free societies are and why MBM(R) is based on the ideas of a free society.

 

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How would you coach?

Below is a made up situation that represents known misunderstandings or misapplications of MBM®. Use the comments to leave your thoughts about how you would coach in this situation.

William comes to you in a panic. He says, “We have to come up with a talent strategy pronto. My team doesn’t have all the capabilities we need. Of the six listed in the new vision statement, I think we have 3 at best.” 

 

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