Why are employee engagement scores today the lowest they’ve ever been? Why are seven out of 10 employees not engaged on the job? Because people can’t elevate their behavior in an informed acquiescence organization. The world is not going to get any less connected or less exposed. Our connections and exposure will accelerate, and our children will out-navigate us. We’d better expose them to the values of self-governance; they’ll need it.
Look at it from an evolutionary perspective. Blind obedience was a great improvement on anarchy. The Allies won World War II with, by and large, a blindly obedient army. But no one could win a major war with that kind of army today; things happen too fast. In the 1970s, 1980s, and 1990s, informed acquiescence was a much-needed improvement. But it, too, is inadequate today. In a system of informed acquiescence, a valued employee will leave when someone offers him or her more salary. But in a company with self-governance, employees have many more reasons to stay and deeper reasons to be loyal.
The same is true with customers. If the only reason you buy from Netflix, for example, is price, the minute the company raises the price, you’re out of there — as we saw when 800,000 or so subscribers bolted overnight.
Let me net this out: In an interconnected world, the nature of a company’s connections with its people and customers is exposed. If the only reason you work for a company is a paycheck, you will leave when you are offered a bigger one. If the only reason you buy from a company is price, you’ll switch your loyalties if someone else sells a similar product. Leaving and switching are easy. Companies that create richer, deeper, more loyal and enduring connections will create sustainable advantage.
S+B: Do you see companies acting on this insight?
SEIDMAN: Yes. I run a growing company; our revenue is an indicator. Businesses are hiring LRN to work on their culture. In the past, when I talked to CEOs about ethics and behavior, they would typically say, “This is important. Speak to my general counsel or chief risk officer.” Today, they’re asking, “How do we get to be the best?” They need help because many of them are stuck in the “valley of C.”
S+B: What is that?
SEIDMAN: When I was a teaching fellow at Harvard College, I realized that there was a paradox in the way people made progress in mastering knowledge. The students who typically got As had mastered the material and integrated it into their being. Some could even teach the class. I called this the “hill of A.” The B students had acquired a basic level of knowledge; they were at a lower level, on the “hill of B.” But the C students were, in many cases, closer to real mastery than the Bs. It’s just that they were confused. They had fallen into what I came to call the “valley of C.” As they move from basic competence to true mastery, they struggle with confusion, and their grades go down. It looks like they have lost their way, but they’re actually improving.
All journeys toward acquiring knowledge are curvilinear — indirect, often involving a step back to take two forward.
An organization’s journey to self-governance is similarly curvilinear. Being an informed acquiescence company is like being on the hill of B. You get some success. But then when you want to go further toward self-governance, it first feels like you’re going backward. You have traveled down and entered the valley of C, which is unavoidable, and your challenge is to keep from getting stuck there.