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10 Min Read

Creating A Culture Where Employees Speak Up – An Interview With Sydney Finkelstein

David Hassell, Co-Founder and Executive Chairman of 15Five

Dr. Sydney Finkelstein is Professor of Management and Faculty Director of the Tuck Center for Leadership at Dartmouth College. He teaches courses on leadership and strategy, and has also published numerous books and articles including the best-seller, Why Smart Executives Fail.

I first learned of Professor Finkelstein’s work in August, when I watched this CNBC interview. He discusses a shift in the marketplace where large, successful businesses like GE have decided to move away from annual performance reviews. Due to our similar values and beliefs around business management and leadership, I immediately reached out for an interview and gained the incredible insights you read below:

The (Almost) Invincible Organization

Q: What can businesses do to make themselves less vulnerable to failure?

1) Creating a culture where people are encouraged to speak-up, gives permission for employees to contribute and discuss their work. This has numerous benefits including helping companies to win the war for talent. Employees are often unwilling to discuss mistakes because they don’t feel safe to share them. Successful leaders understand that mistakes happen, and they encourage employees to speak-up so that everyone can learn, adapt, and adjust in real-time.

2) Strategy (anyone making important decisions) is often not based on deep, disciplined analytical thinking. Assumptions behind a strategy need to be analyzed and assessed in detail. Executing on a strategy is not just about having a great idea, it’s about the implementation.

Creating a Transparent Company Culture

Q: What are the keys to creating an organization where people feel safe to speak up?

No matter the overall culture of the organization, every leader must do this on his or her team. Regardless of buy-in from the executives, every manager can put in place a set of standards, expectations and behaviors to encourage candor. Here is a great techniques that you can use:

Mistake of the Month Meeting. Leaders initiate by discussing what went wrong, what their role was in what went wrong, what was learned, and what was done to minimize damage. Model this behavior so that people speak up in real-time when there is something they disagree with. Transparency here can be bolstered by enrolling a close colleague to follow-up by sharing their own mistake.

This creates psychological safety, which has been studied in environments like airline cockpits and operating rooms. We all want supporting staff like nurses and co-pilots to speak up in real-time to the person with power and status, such as doctors and pilots. A mistake there could cost lives.

Managers who communicate with their teams every week, create more transparent cultures and improve workplace relationships. Learn More…

The Human Factor

Q: 15Five is a values driven company that believes in re-humanizing the workplace. How do the human factors of leaders impact strategy and overall organizational success?

Background and past experiences are going to have an impact on how we think about the world. This can often be filtered by our roles at a company, where the same issue will be viewed as a marketing problem by someone from that team, but an ops person will likely interpret it as an ops problem.

Emotions also play a gigantic role in how decisions are made and how organizations are run. People are uncomfortable discussing emotions in the workplace. But neuroscience tells us that emotions greatly influence how we think. This includes biases that we bring to the workforce. An example of this is when people overestimate the quality of their experience and the relevance of past behavior on a present situation.

Ask yourself and those around you when making a decision, why did we choose this data to share? Why is it relevant? What is not being shown here? What example is less relevant? Even things as seemingly obvious as data or information is subject to interpretation, and people will consciously or unconsciously choose things that will support their inherent preference.

What we’re talking about is human nature, and to say that it doesn’t play a role in how organizations work has got to be one of the craziest ideas I’ve ever heard.

Q: How can leaders look inside to see how their emotions are impacting their decision making?

How do people become more self-aware? Well, they have to work at it. We have to acknowledge that how we look at the world is biased and others have different perspectives. Try these tools to help get there:

– Conduct “pre-mortems”. In the process of making an important decision, analyze all the things that could have gone wrong as if they did. Write the article on the cover of the Wall Street Journal (that will hopefully never be printed) about how things went down the drain. Give visibility to the risks and look at ways to mitigate them.

– Diversity improves performance.  Diverse groups make better decisions than non-diverse groups. Have people from different backgrounds around the table on every dimension possible.

– Bring in outsiders. Get a different point of view from colleagues in different parts of the company or another company altogether. Go to a business school to get some executive education training. And when you network, find a couple of people that you trust who are unafraid to call you out on decisions.

The End of the Annual Review?

Q: Why are companies shifting away from the standard annual performance review, and towards agile weekly communication practices?

1) People think that they are better than they are at evaluating others, and think they’re fair at it. We have many biases that we are barely aware of.

2) Those being evaluated may not trust the people doing the evaluating. Trust is fundamental at every company.

3) Waiting for the end of the year to get feedback is not sensible. It occurs so far after the projects being evaluated, there’s no way people can remember the details. Feedback should be regular and ongoing throughout the year.

4) Promotion and compensation decisions get tied into performance evaluations. That’s not the way to coach people. Those decisions have to be made but should be done separate from feedback that is designed to have people improve.

We’ll all be better off when our performance processes are designed to improve performance, rather than just giving employees a grade. And the world of work will improve dramatically as leaders strive to become more self-aware and build cultures where employees feel safe to speak up. I am grateful for Professor Finkelstein and others who are improving the world of work by improving its leadership.

Follow Sydney on Twitter @sydfinkelstein to stay connected to what he’s thinking about and writing. His next book is Superbosses: How Exceptional Leaders Master the Flow of Talent.