Missing Link: Individual Efforts And Organizational Performance
Organizations live or die based on the actions and efforts of the people who bring them to life through their work. Leaders and employees instinctively know this to be true yet regularly struggle to see the connection between what they do on the job every day and the firm’s ultimate success or failure. At its extreme, this lack of connection between individual efforts and organizational outcomes lead many to conclude that their job is meaningless! Unfortunately, when more than a third of workers believe this to be true and books about Bullshit-Jobs become best sellers, it is clear that connect individual efforts with organizational outcomes is a difficult challenge. Moreover, it collectively costs organizations $125 to $190 billion dollars a year in lost productivity and turnover costs as employees burnout, disengage, and refrain from exerting their best efforts.
This is, of course, not unique to business organizations. A quick Google search on “Social Loafing,” the tendency of individuals to feel less connected to group outcomes and exert less effort, will return more than 2,340,000 results and provide examples from education (group assignments) to recreation (Tug of war). It plays out in both acts of omission such as social loafing, in which productive efforts are withheld, and through acts of commission in which energy and effort are expended at the individual level that are ultimately counterproductive at higher levels.
In 1833, the British economist William Forster Lloyd wrote about this phenomenon by exploring what would become known as the Tragedy of the Commons. Lloyd provided an example in which a shared resource of communal grazing land (the commons) would be exhausted through over-utilization by individual herdsman rationally seeking to maximize their own utility. It makes sense for individuals to graze their cattle as much as possible on shared land. However, when this is repeated by multiple individuals the over-grazing harms the health of the land and decreases the total number of cattle it can support. In the 1968, professor Garrett Hardin revived academic interest in the Tragedy of the Commons as a theoretical model that would ultimately be used to help academics, politicians, and business leaders to understand the phenomenon of individual action feeling disconnected from collective outcomes. It was used to inform researchers, philosophers, and policy makers working on a wide variety of issues in which individual choice determine higher order impacts such as:
The choice of individuals to smoke and its impacts on public health outcomes
Pollution and emissions from individuals and independent firms and their environmental impact
More recently, the choice of individuals to wear masks, get vaccines, and social distance and their effects on public health
It is incredibly difficult to create and maintain meaningful connections between individual action and collective outcomes over time. Organizational and system-level outcomes that are clearly understood and compelling do not automatically translate to individual motivation. We need look no further than our local news headlines to see this in action. We know that masks reduce viral spread when adoption rates are high. While high tech and medical grade equipment can filter out the virus, the majority of masks are much lower tech. However, even low-tech mask are effective public health tools. Despite not screening viruses out of the air that a user breathes in, they effectively slow down the air that infected people breath out which reduces both the viral load that they contribute to the air around them and the distance that that their exhalations travel.
We also know that the newly developed Covid-19 vaccines are safe and impressively effective against the virus, including the known variants, drastically reducing the rate of spread in immunized populations relative to un-vaccinated ones. Yet despite these well-known public health outcomes, roughly one third of the US population reports wearing a mask in public only some of the time with 16% indicating that they hardly ever or never do so. Similarly, a recent Monmouth University study showed that one in four Americans say they are unwilling to get vaccinated against the virus. As with any decision that subverts desirable group outcomes, individuals have their own motivations for refusing to wear masks or get vaccinated.
It’s tempting to debate the validity of the motivations behind counter-productive decisions made by individuals. However, the larger insight is that in any group, organization, or population of sufficient size, there will always be a percentage of its members who make choices or exert effort in ways that subvert the outcomes and ideals that it strives for. No matter how motivated its membership or effective its leaders are, it is impossible for successful groups and organizations to free themselves from this phenomenon entirely. And yet, that is exactly what effective leaders must strive to do for their organization! The good news is that leaders’ inability to eliminate the issue does NOT prevent them from making improvements. Strengthening the connection between individual efforts and organizational outcomes is central to effective leadership. That work is never finished, but it always makes a difference.
A common mistake made by senior leaders is that they attempt to improve organizational outcomes using strategies developed at the individual level. Such leaders may engage deeply in motivational theory, recognition and rewards programs, and varying techniques designed to get their people to comply and do what the leader wants them to do in service to the larger organization. While these efforts often bear some fruit, their impacts are usually limited. However, the mistake is not that such efforts are being made, but that they are being done at the wrong level within the organization. That work is most effectively done by managers and direct supervisors.
To improve organizational results, senior leaders must focus their efforts on organizational strategies. They must work on firm-level factors at the same organizational level as the outcomes they seek to accomplish. Forsyth and Burnette touch on several such remedies in their chapter on Group Processes in R. F. Baumeister & E. J. Finkel (Eds.) book, Advanced social psychology: The state of the science.
Senior leaders must articulate and clarify the mission: The mission articulates the results that organizations must strive to produce in the present in order to make progress toward the firm’s larger vision. Without a clear and compelling understanding of the mission, an organization’s members have no way to measure whether they are contributing value to the collective effort or undermining it.
Paint the vision: A firm’s vision is designed to communicate why the mission matters. It paints a picture of what it looks like when the firm hits the mark and accomplishes its mission. Lackluster visions and poor communication can leave employees uncertain about why the organization does its work. If they don’t know why the organization’s work matters, there is little hope of them understanding how their own work contributes to it. Senior leaders are responsible for communicating a clear vision to provide employees with the opportunity to understand how the company’s vision is contingent on the outcome of their work.
Tie the identify the team to the mission and vision: The mission and vision must not collect dust in a drawer between annual planning cycles. It is the job of senior leaders to ensure that they are alive and well every day of the year. They must go beyond slogans to activate the mission & vision as a part of “who we are.” They must use them as the basis for determining responsibilities, evaluating the performance of their direct reports, and holding leaders accountable for doing the same throughout the organization.
Orchestration: Senior leaders are uniquely positioned to keep their business in synch by seeking out and eliminating friction between the different parts of the organization. When employees must routinely wait for information, resources, or materials to do their job, it sends a message that their contribution is not essential. Likewise, when employees see outcome of their work unused or sit idle with other internal works-in-progress it shows them clearly that they are not on the firm’s critical path to organizational success.
Create Systems: To orchestrate consistently, senior leaders cannot rely on circumstance or situational decision-making. They must build accountability systems and rely on them to help them think ahead about what is needed, assign clear and distinct responsibilities to their direct reports, and secure the resources necessary for their people to succeed. Furthermore, they must see to it that such role clarity and management by accountability is incorporated and practiced by users of the system at every level of the organization.
Make each person’s contribution identifiable: Accountability systems give leaders the tools they need to see and acknowledge the product of employee’s work. They also serve to eliminate opportunities for free-riding to remain unseen. When employees know their work will be evaluated, they also know their work is being seen. The knowledge that one’s contribution will be noticed and evaluated is a necessary precondition for believing one is making a contribution to the larger organization that is worth noticing.
Connect the dots: People have been shown to be more productive in groups when they personally value the group's goal and believe that their contribution is important. Once a leader has done the work to make sure each person’s contribution is identifiable, they should not assume that the employee will automatically understand how that contribution impacts the firm’s overall outcomes. Make the importance of their work clear and meaningful by explicitly drawing the connection between what they do and how the firm achieves its mission and vision.
Doing this work day in and day out is difficult and demanding work but the tools and experience are available to do it well. For example, it has been almost 30 years since W. Warner Buke and George Litwin published their Causal Model of Organizational Performance and Change in the Journal of Management. Researchers and practitioners now have three decades of experience putting that knowledge and practice to work.
Senior leaders are responsible for organizing and orchestrating incremental and transformational change in service to an ever evolving ideal. They are both a participant, team captain, and coach in a race with a constantly moving finish line. If that sounds exhausting, it certainly can be. Especially for those without access to knowledgeable guidance and support. If you are a senior leader, you will encounter challenges that you didn’t expect, and see things that you never imagine when you started the journey. The journey will be long, but it will be worth it if you are up for the challenge. You can do it. We can help.
Let’s get to work!
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