Conversation 10: What Makes the Wheels Turn

Just to be sure we understand each other, would you like to summarize what we’ve discussed so far?

So far we’ve said that:

Life is change.

Everything alive is a system composed of subsystems.

When there is change the subsystems do not change synchronously. That creates gaps that are manifested in what we call “problems.” We have to decide what to do about problems and not to decide is to decide.

Decisions have to be implemented or it is as good as if there was no decision made.

Deciding and implementing decisions is what management is all about, whether we call it management or leadership or governing or parenting. It is all one and the same. We need to manage change.

To manage anything, we must make good decisions and implement them using minimal energy and resources.

How well we manage, lead, or govern depends on how good our decisions are and how efficiently we implement them.

A good decision requires that four roles, or imperatives, be fulfilled: (P), to (P)rovide the needed service; (A), to (A)dminister for efficient service; (E), the (E)ntrepreneurial role, to position for the changing future; and (I), to (I)ntegrate the organization.

These roles are necessary and sufficient to make organizations effective and efficient in the short and long term.

An organization that is both effective and efficient in the short and long term is healthy. But that is not enough. The system must have also interdependency based on common interests.

The purpose of management, leadership, government, or parenting is to see that the (PAEI) roles are performed, and that there is common interest, that the system is healthy. If the system is a business, a byproduct of being healthy is being profitable in the short and long term. If it is a country, it will have a sustainable society and economy. If we are talking about a family, being healthy will result in a well-integrated, functioning family.

Since no individual can be a perfect (PAEI), we need a complementary team.

An organization that is both effective and efficient in the short and long term is healthy.

In a complementary team there will necessarily be conflict because it is composed of differences in style.

To make the conflict constructive, we need to learn from each other’s disagreements. For this to occur we need mutual respect.

We can predict whether a decision will be a good one if we know whether it was devised by a complementary (PAEI) team that operated with mutual respect.

To implement decisions, we need capi: coalesced authority, power, and influence. We need to build a coalition of the people necessary to implement the decision. Implementation is always faster if propelled by integrated self-interests.

Implementation is always faster if propelled by...

Integrated self-interests?

Try again, please.

By common interests? But what is the difference? Is common interest not the same as integrated self-interest?

No. Integrated self-interests are short-term oriented. Common interests have a bigger picture, a higher purpose. It is much tougher to get common interests without a higher purpose.

That makes sense.

Who should be the people involved in decision making?

First, those who have the authority to approve a decision. Second, those who will carry out the decision in the field; they have the power. Third, the people with the technical and professional knowledge needed; those with influence. We need to create common interests among them if we want to have the decision effectively implemented.

Excellent summary.

This is all well and good, but something has been bothering me since our last conversation. How did the myth of the perfect (PAEI) manager come about in management theory? It seems like a fundamental error.

The mistake lies in the way management theory is researched. The best characteristics of many different people are chosen through research to create a model. But such a model is really just a fanciful collage that does not and cannot exist. We are all human beings with strengths and weaknesses. None of us is perfect. I attribute that error to the manner by which research is conducted. Moreover, management theory was first developed in the United States where the culture is individualistic. Naturally, they personalized the whole process of management into one individual, the Leader.

Okay, the perfect (PAEI) leader does not exist, but are we not trying to develop one?

Are you referring to business school graduates who believe they have all the answers? I have criticized business schools for this failure at the International Academy of Management. The problem is that we train individuals. They are not trained to seek input from those who complement them and could help them make good decisions. They receive no training in uniting people with different interests, even though they need the cooperation of those peo- ple to carry out decisions. The implementation process is also a source of conflict. We need to examine that as well.

Let us go there now.

We’ve said that in order to implement decisions efficiently we need a commonality of interests between the necessary parties involved in implementation: a win-win climate, whether it is achieved by integrating self-interests or identifying common interests derived from a higher purpose.

Stylistic differences can be synergistic when mutual respect creates a learning environment.

I can see that in a marriage. The spouses might start with a common interest of building a family, but over time they develop different needs and start to go their separate ways.

The same happens in business. After some time the different partners have different interests: One has children who want to join the business, the other wants to retire and sell his shares. In this case, change means a change of interests.

What do we do? What requires a mere contribution from you may require a total commitment from me. I may not want to do what is in your interest. I am the pig in your earlier story.

That is how conflict can become destructive. Those who have the authority to decide can be undermined by those with power. They can make a sham out of decisions by simply not implementing them properly. They can undermine decisions to protect their interests. In the same way, those with authority may make decisions that are clearly in their own interest at the expense of the interests of those with power.

Whenever there are diverse interests among those who are needed to implement a decision, the political process of securing implementation can be lengthy and expensive. It may demand a lot of managerial energy.

So there are actually two sources of conflict: One is miscommunication— we interpret the same words or body language differently, we process information and make decisions differently—and the other is divergent interests, which lead to lack of cooperation.

Right. Either we don’t understand each other because we have different styles and/or we have conflicting interests.

We solved the problem of conflicts that stem from differences in decision-making styles: Stylistic differences can be synergistic when mutual respect creates a learning environment. But how do we make conflict constructive when we’re working with divergent interests?

First, accept reality. Only when you accept that there is conflict can you harness it. Notice I said you have to harness conflict, not resolve it. Don’t try to fight or eliminate conflict, make it functional. Make it work for you.

But you just said that having a win-win climate all the time is utopian.

Yes. The people involved in implementation realize that a win-win climate does not occur in the short term, but they see that it will exist in the long term. This sort of long-term belief is the basis of many good marriages. When there is long-term commitment, one partner will give in today and the other will give in another time. It evens out eventually.

You mean you have to start with commitment? It still sounds utopian. If I acquiesce in order to overcome a short-term conflict of interests, I must trust that the other party will reciprocate in the future. I must trust that my short-term sacrifice will be good for me in the long term. If I don’t trust the people with whom I have a conflict, why should I believe they will cooperate over the long term? If I don’t believe they’ll cooperate later, why should I cooperate now?

Obviously, you won’t give in at all unless you believe the favor will be returned. Thus, to implement decisions, mutual respect is not enough. We must also have mutual trust. We have to trust that over the long term we will both benefit. Only then will we be willing to cooperate in the short term in spite of the short-term conflicts of interest.

For decision making we need colleagues—not necessarily people who agree with us, but people whose disagreement we learn from. As we said earlier, a colleague is someone with whom you are in confrontation all the time, but you welcome it because you learn from it.

For implementation, on the other hand, we need friends. A friend is someone who shares our interests. He will not stab you in the back because stabbing you will hurt him as much as you. You share interests, and because you share interests implementation is swift.

In Hebrew the word for friend is haver, which comes from the root meaning to be connected: HVR. Since you are connected, what happens to you happens to your friend as well. Francis Bacon said a friend is a person who halves your sorrow and doubles your happiness, through empathy and shared interests.

You should surround yourself at work with people who are your colleagues and, at the same time, are your friends. They disagree with you and you learn from those disagreements, but they share your interests so those disagreements benefit both of you. That is how a marriage should be too. Although your spouse does not always agree with you, there is total agreement on one thing: The interests of the family are common.

I think I can predict whether that decision in the envelope will be implemented!

First, did those needed for implementation participate? Could we get the people needed for capi together?

What then?

Do they trust each other?

If you want to implement decisions efficiently, you must make sure that all the people you need for implementation have common interest in implementing the decision, if not in the short term, then in the long term. There must be a win-win climate, a symbiotic relationship such as the one friends have over time. That is why friends are proud of how long they have been friends. Their mutual trust has overcome many tests and conflicts.

I see: Since, at least in the short term, there is probably going to be a conflict of interests, there must be mutual trust that in the long term things will work out and interests will be mutually satisfied.

Right. Say I invite you to dinner. I pay for it. You win, I lose. But what will happen next time we go out to dinner? Who pays now? You see, in the short term there is a conflict of interests, but in the long term it gets compensated. For that to happen you must have faith that your sacrifice will be reciprocated.

In English we say life is give and take. In other languages, though, like Arabic, Turkish, and even modern Greek, it is said differently: life is take and give. There is a difference. In give and take there is trust. You give and trust that it will come back, and later you will take. When you say life is take and give it means that there is no trust. You want to take first to be sure you do not lose, and only then do you give.

In those societies where they say life is take and give there is no trust. What made America successful is its culture of trust. (You will see later why trust and respect are important factors for economic success.)

For a symbiotic, friendly, win-win climate, you must have mutual trust. The way to transform potentially destructive conflict into constructive conflict is to create a nurturing, symbiotic environment. Symbiotic means the parties perceive that a proposed change will eventually work for the benefit of all involved.

If there is mutual trust, you and I will perceive the mutual benefit of change and allow it to happen. Without mutual trust, there will be lots of resistance.

I know what four questions I should ask before opening the envelope.

What are they?

Were the four (PAEI) roles performed? Was there a complementary team?

Second, was there mutual respect in making the decision?

Third, did the team have capi?

Fourth, did they trust each other?

The principle is good, and the questions are right, but there is more to it. It is not easy to have a complementary team of (PAEI) styles and, at the same time, have capi. To discuss how to make that happen let us go back to the beginning of our conversations.

Oh no. Why is life so complicated?

Life is not complicated. It is very complicated to make things simple.

The Importance of Love and the Sequence of Organizational Therapy

We said change is here to stay and has been here forever. Change generates problems because change causes disintegration (subsystems do not change together). If all problems are caused by disintegration, we already have discovered the therapy...

Integration.

Right. Integration is a function of Mutual Trust and Respect, and the highest degree of integration is love.

You mean to say there cannot be love without Mutual Trust and Respect?

Yes, I do.

But why is love the ultimate integration?

For two people to benefit from one another, one has to give and the other has to reciprocate. With mutual trust, there can be a lag in the exchange. In a loving relationship there is no lag time between giving and getting paid back: The giving is the taking.

For example, when you take your kids to the circus, do you take them because you trust they will pay you back when you are old and feeble? Or do you do it for the pleasure of seeing them giggle, laugh, clap, and rejoice? Love is when you don’t keep an account of what you do for the person you love, when you give because the giving itself enriches you—the more you give the richer you are. In the history of mankind there are those who could give totally, endlessly, engulfed in total love: the Buddha, Moses, Jesus Christ…

Mother Teresa?

Or volunteers who help people with AIDS, or who help the homeless, or a diligent worker, or a truly dedicated employee or manager. They are all givers and the more they give, the more they love, and the closer they get to the biggest giver of them all—God. We all have the potential to give. We are all made in God’s image by allowing ourselves to love and give. The ultimate trust is trusting the universe, God—whether we think of it as the God of the Jews, Hindus, or Christians, or the tao—a higher consciousness.

Giving to others for the purpose of enriching ourselves happens when we love as a parent loves the children he takes to the circus. Without love we’ll feel miserable sitting at the circus. We’ll get upset when we see these kids clapping their little hands about something we think is quite frivolous while we left all that work undone at the office.

When a manager is given an organization to lead, she should create and nurture a win-win climate, a symbiotic environment based on Mutual Trust and Respect, and if she can, do so to the degree that it approaches love.

Leaders should have a common purpose in creating this environment, nurturing the spiritual core of the organization. Love your fellow workers. Love your clients. Love the product you are selling. The more love in the system the more Mutual Trust and Respect, the more inte- gration, the easier is to change, and thus the easier is to succeed in a changing environment. What do you think made Steve Jobs so successful? He was in love with the product, with the design, with its functionality. He was passionately in love, and the customers reciprocated, voting with their dollars.

Here’s the way it would look on our master diagram.

DIAGRAMA

Now, you try to put it all together.

Conflict is a byproduct of change. It can be destructive or constructive depending on whether Mutual Trust and Respect exist.

Mutual respect is necessary so conflicts of styles can be constructive, so we can learn from each other’s differences and make better decisions.

Mutual trust is necessary so we can perceive that a win-win climate will exist in the future. Then the people involved will cooperate in implementing decisions in the present.

When all of the above occurs, we have constructive, not destructive, conflict.

I want to repeat: I know what questions to ask before opening the envelope. Did the team analyzing the problem have capi, were all the (PAEI) styles represented, and was there Mutual Trust and Respect in reaching the diagnosis and the solution?

Yes, you understand it well.

During the French Revolution the slogan was liberté, égalité, fraternité. It fits well into our diagram. Liberté is on the left side, the freedom to speak, which is the foundation of respect. Egalité fits on the right side with common interests.

Fraternité should be in the middle—it is love. Love is there when there is Mutual Trust and Respect, when we are both friends and colleagues, when we are free to speak, teach other, enrich each other with our differences and still have common interests. Look at the top of the diagram. The c of capi integrates api the way (I) integrates (P), (A), and (E). For love we bring c and (I) together. We are different in style and interests, but we are together, not in spite of our differences but because of them. We make things grow by cooperatively interacting and share the gains of that interaction.

Common interests sounds like socialism and diversity of styles sounds like democracy. Jointly it looks to me like your theory fits well with a socio-democratic agenda.

It does. I made a presentation to that effect to the General Secretary of the World Wide Secretariat of Social Democratic parties in the world.

Tell me now, what is more important, trust or respect?

Think about it. Can you trust people you don’t respect?

Yes, I can. Someone may not be as intelligent as I would like him to be, but I also know he wouldn’t deliberately hurt me.

Can you respect people you don’t trust? Only with great difficulty. If I don’t trust the people, I probably won’t listen to them either.

Exactly. Trust has to be established before respect can be established. That’s why we usually say “trust and respect” rather than “respect and trust.” Interestingly enough, I’ve noted that there is no happenstance in how people use words. Folk expressions are full of wisdom!

Your claim that trust has to precede respect has interesting repercussions. Can you give me an example?

Trust has to be established before respect can be established.

Look at what happened to the Soviet Union. Mikhail Gorbachev was pushing for glasnost and perestroika—that was how he was going to change the Soviet Union. Glasnost is on the left of our chart. It is to have political freedom, to have the right to dissent. Would you agree that freedom of speech is based on mutual respect? Perestroika was to re- structure economic interests, and interests are related to trust. He started with glasnost first, with freedom of speech, with mutual respect. That was a mistake because glasnost undermines political strength, which is necessary to carry through economic reforms. He started with respect rather than with trust.

I wrote him a paper when TIME magazine named him man of the year, warning him that the changes he wanted to carry out would cause destructive conflict, which is what happened.

The Chinese are doing it the right way, then.

I believe so. So is Nursulan Nazarbayev, the president of Kazakhstan. He is restructuring the economy while maintaining political power. Eventually he will have to release political power too or there will be unrest, so Nazarbayev started the transfer of political power in 2015 with the hundred steps program. In China, the signs of unrest have been present for years—Tiananmen Square is one example.

The two sides of the equation, the two sides of our map, have to be synchronized, but in the right sequence. Trust, then respect.

Does this sequence apply to personal life too?

It is true in a marriage as well. There is no respect unless there is trust first.

I wonder, exactly how do you manage an organization with Mutual Trust and Respect? Most aren’t managed that way, so your theory applies to only a handful of organizations in which trust and respect are an integral part of the culture.

Don’t just rely on MT&R, develop it.

The more change the more threat there is to a culture of Mutual Trust and Respect.

I have not stopped with the theory of Mutual Trust and Respect, I have worked out a process to change organizations so that they can produce the trust and respect they need. So they don’t just rely on MT&R, but develop it. It doesn’t happen just by talking about it. It takes commitment and hard work. Furthermore, when you develop such an organization, it doesn’t maintain that trust and respect for long unless you keep repeating the process that nurtures the desired culture. Every system tends toward entropy unless you put energy into it. The more change the more threat there is to a culture of Mutual Trust and Respect.

How do you convert an organization with no Mutual Trust and Respect into one that has both?

After fifty years of working with my Associates at the Institute, in thousands of companies of different sizes, in a variety of industries, in over fifty countries, I found out that there are four factors that produce Mutual Trust and Respect. These apply to any organization. We are now testing it in family therapy and on a macro level within a country.

What are those four factors?

MT&R is a function of having common vision and values, a functional and diversified (PAEI) structure, a collaborative decision-making process, and mature people who command and grant MT&R.

It makes sense that we would need common vision and values, but why is structure so important?

Organizational structure determines the distribution of responsibility, authority, and rewards. This distribution determines the differentiation of self-interests. Also, different tasks attract different kinds of people.

We have already established that we need all (PAEI) roles to be performed in an organization. We have established that there is no single individual who can simultaneously perform all four roles, thus, a complementary team is needed. For a complementary team we need a complementary structure. A functional structure should provide space for (P) activity sepa- rate from (E) activity, etc. We need (P) departments, (A) departments, (E) departments, and (I) departments.

Can you give me an example?

For a complementary team we need a complementary structure.

Sure. The (P) role is usually performed by operations, sales, or manufacturing. (E) is performed by R&D, engineering and marketing. (A) is accounting, quality control, audits, human resources administration. (I) is performed by human resources development.

We already discussed how the roles are incompatible and endanger one another. Thus, in a well-structured company you should not have one VP for sales and marketing. That would be mixing (P) and (E) and, predictably, if you do so (E) will suffer. Short term, which is what (P) focuses on, will squeeze attention from the long term, which is (E)’s focus. Such companies have a marketing department but it is not performing the marketing function. It really does sales support but calls itself marketing. This is a very complex subject and if you want to know more please read my book Managing Corporate Lifecycles.

What about the other factors?

Structure alone is not enough. Since people have different styles, they must learn how to communicate with each other. A correct process of collaborative, participatory decision making is necessary.

The Adizes Institute’s E2 course teaches students how to communicate in a collaborative way with different styles in order to minimize miscommunication.

But having common vision and values, a correctly structured organization, and the right tools to communicate with different styles still isn’t enough. Some people have a chip on their shoulders and neither command nor grant respect or trust. They had a distrusting, disrespectful attitude before they joined the organization, so changing the organization will have no immediate effect on them. If they cannot change you might have to change them.

If you want to change an organization’s behavior, first you must develop a common vision and values that all decision makers in the company share. Then you need to treat its structure, the decision-making process, and finally the people themselves.

Start with the collaborative process. Change how people decide. Then, using the new process, change the distribution of responsibility, authority, power, influence, and reward structures. As you change the structure and processes, people’s behavior will change. They will become more open and participative, and Mutual Trust and Respect will grow.33 Those who can’t change will probably leave the organization.

This sounds either too complicated or too simple.

It’s neither. It’s a process that doesn’t exploit trust and respect. Instead, it develops a system that creates and nurtures trust and respect.

Too many consultants preach trust and respect but don’t know how to create it. They raise hopes, which, when not satisfied, just make people skeptical of management theory and of consultants. It’s not surprising that business schools have been accused of being irrelevant and that consulting is considered the second-oldest profession.

I experimented over many years with organizational cultures that suffered from mistrust and disrespect, and developed this methodology to change a culture to one that is governed by trust and respect. It required developing the right structure, process, and people with common vision and values in the right sequence. People often make a key mistake when trying to change an organizational culture. They ig- nore structure and process and focus exclusively on people. If there is no teamwork, they fire the people and replace them with others who are thought to have respect and trust. But this doesn’t necessarily work.

With the wrong structure and process, even well-meaning people start behaving in a destructive and disrespectful manner. The environment causes people to change their behavior, regardless of how well meaning they are.

Can this system of change you have developed be learned?

Sure. The Adizes Graduate School offers a doctorate in this methodology. It involves learning and then doing an internship under supervision. The total program takes three years.

When you pray, you accept your vulnerability.

This has been a rich conversation—I have enough food for thought to last me a while. You even made me want to go back to school. Or go and pray.

When you pray, you accept your vulnerability. You accept that you are part of a bigger system of consciousness, that your deeds matter because you belong, and you affect the totality just as that totality affects you. Prayer can be reading a chapter of the Bible, or a verse, but it doesn’t have to be only the Bible or a prayer book. Do not (A) your prayer; (I) it. You can pray by whistling, or meditating, or breathing, or practicing what you love, whatever way you feel (I)ntegrated with the totality you belong to.

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