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My Company Is My Therapist

A new book argues that companies can thrive by focusing on the human development of their employees.

You’re probably intuitively familiar with the Peter Principle, even if you can’t quote it verbatim: “In a hierarchy, every employee tends to rise to his level of incompetence.” Unfortunately, Laurence J. Peter, the University of Southern California education professor who coined the term in 1969, didn’t offer a better alternative. And in the past 47 years, no one else has, either. (A trio of Italian professors did, however, win a 2010 Ig Nobel Prize for using game theory to prove it’s better to simply promote employees at random [pdf].)

But now there may be hope. What if your company were to embrace the Peter Principle? What if it could accept that eventually all employees will reach their level of incompetence, recognize when each employee has reached it, and then help people move beyond their own fallibilities? Would such a company succeed? This, in essence, is the beguiling thesis of An Everyone Culture: Becoming a Deliberately Developmental Organization (Harvard Business Review Press, 2016).

An Everyone Culture hails from what might be described as the Left Bank of the Charles River — its lead authors are Robert Kegan and Lisa Laskow Lahey, professors at Harvard’s Graduate School of Education, which is separated from the Harvard Business School by the river and a sharp divergence in worldview. Rather than seeking competitive advantage in a company’s products or strategy, as HBS professors would, Kegan, Lahey, and their colleagues believe an edge can be found in the ability of corporations to develop adults as humans.

Indeed, the authors argue that a highly evolved company, which they call a “deliberately developmental organization (DDO),” can incorporate the psychological advancement of employees into the work itself. Kegan and Lahey want us to imagine that “hardwiring development into your bottom line” could, in addition to boosting profitability and quality, impact the firm’s culture so that “in the regular daily operations of the company, [it will] be a continuous force on behalf of people overcoming their limitations and blind spots and improving their mastery of increasingly challenging work.”

Imagine “hardwiring development into your bottom line.”

This might sound like corporate utopianism — or, for those of a more cynical bent, dystopianism. But the authors develop the argument by parachuting us into three existing DDOs, all of which serve as highly effective, day-in-the-life case studies. Bridgewater Associates, perhaps the largest and most successful hedge fund in the world (with US$150 billion in assets and 1,500 employees), pursues “radical transparency” by recording every meeting and providing the audio files to everyone in the company. Decurion Corporation, a Los Angeles-based real estate development, acquisition, and property management company with 1,100 employees, holds “fishbowl” conversations: Attendees sit in a circle, arrayed around a smaller inner circle of people most involved in the issue at hand, and discuss subjects such as the stalled development of a customer loyalty program or an executive’s habit of “withdrawing her goodwill.” At Next Jump, Inc., an e-commerce company that runs reward programs for other corporations and has 200 employees, all new hires attend a three-week personal leadership boot camp in which they learn how to identify and address their “character weaknesses.”

Beyond detailing the ways in which the three companies operate, the book explains the theory of adult development that underpins a DDO, and describes its key attributes: “the depth of its developmental community (which we call home); the breadth of its developmental practices (which we call its groove); and the height of its developmental aspirations (which we call its edge).”

So, should your company become a DDO? And would you want to work for one?

The book includes a full chapter devoted to each of these questions. In regard to the first one, the authors believe the results of the companies they focused on point to a clear yes. In seeking to maximize employee potential, they write, Bridgewater, Decurion, and Next Jump have achieved a range of remarkable goals. They’ve figured out “how to increase retention, profitability, coaching support, readiness to learn, speed to promotability, [and] frankness in communication” while cutting back on political maneuvering, impression management, behind-the-back disparagement, and disengagement. They have learned “how to anticipate crises no one in the company has experienced and manage successfully through them; how to invent future possibilities no one has experienced and realize them.”

While they are willing to generalize from the particular experience of companies, the authors are less cavalier about arguing that every person will embrace the possibility of DDOs. From the outset, they repeatedly warn readers they are likely to have a visceral reaction to the idea of working in a DDO. “If you are, like most people, more wary of feeling vulnerable, ashamed, and unworthy — especially at work — you might find yourself feeling alarmed soon after you enter.” But for the few, the introspective and the bold, DDOs may make perfect sense. Such companies tend to be good destinations for the “rarer kind of person,” whom the authors describe as “valuing the experience of your own vulnerability and running right toward it.”

I’m definitely in the wary camp. It’s not so much that I’m worried about feeling vulnerable, ashamed, and unworthy — I’m used to that. But I would be wary of working in a DDO because I have a hard time believing that: (1) a corporation can always be trusted to look out for my best interests; (2) my psychological development is an employer’s business; or (3) bosses and coworkers are qualified to act as therapists.

But I could be wrong. It’s possible that the novelty and relative scarcity of DDOs makes them seem strange and alien. Perhaps if I were to convene a fishbowl session in which my colleagues could tell me, with radical transparency, their opinions of me and my work, I might become a more productive, more evolved human being.

Theodore Kinni
Ted Kinni

Theodore Kinni is a contributing editor of strategy+business. He also blogs at Reading, Writing re: Management.



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