Jurgen Appelo – TRANSCRIPT
They are seen as untrustworthy, narcissistic, inauthentic bullies and they drive you all completely nuts — The managers.
Let’s say your manager is Bill. You want to negotiate for a higher fee or salary but Bill said that, sadly, there was no budget left, after he received his raise or bonus. Am I right? Or you ask for a better computer or work phone that he didn’t give you, and he emails his rejection from his glass fiber titanium case nuclear power station. Correct? Silly Billy.
I know these stories well because, I’m afraid to admit, I was a manager like Bill. In my defense I was actually a software developer. But I may have been so bad at programming that my teammates begged our CEO to promote me away into management. And like other managers, I had no clue how to work with people. I drove the business like a machine.
For me, software developers were computers on legs with hair. I sucked as a manager. And bad management means bad performance. Every company I worked for, collapsed. But somehow, everything has changed. Now people ask me for advice on how to run their businesses. And I travel the world sharing stories and practices. It all comes down to this: manage the system for happiness and offer products with meaning. We need companies to be purposeful. We want more Apples and Teslas and Amazons. Not to have your next smart watch delivered to you by smart drone while you’re driving your smart car.
Who cares? What we want are organizations that make lives worth living. We want businesses to offer us nanobots, solar power, gene therapy, quantum computing, medical virtual reality. Because all these innovations can be turned into meaningful products and services. But someone has got to manage this. And the purpose of management is making organizations valuable to people and planet. Sadly there is no single silver bullet to achieve this.
But I changed from a bad manager to a not-so-bad manager with seven silver bullets. Let me give you some examples. Let’s say that your manager is Taffy. Taffy wants to organize corporate lunch meetings where she feeds everyone pizzas and PowerPoints in the hope that afterwards all the employees would feel engaged. But none of your colleagues said: “Those slides full of bullet points were so inspiring!” And none of your colleagues said: “When is the next event scheduled in my free time?” Let’s do a quick scientific test, if you know managers like Taffy, organizing such meetings, at the count of 3, I want you all to say: “Daffy Taffy”. Ok? Here we go: 1, 2, 3!
Audience: Daffy Taffy!
Oh my god! 73.4 % of the audience knows someone — I’m good at that, I’m good at counting — knows someone like Taffy. I organized such large meetings as well, I admit. But I did something else recently. I know that change is easier when people share food. So I invited colleagues to my house for dinner. It was random people such as two programmers, an account manager, a project manager, a system administrator, and the senior vice president of pencils and paper clips. The day before they arrived I found myself some easy-to-make recipes, that means: not French. I fetched the groceries, prepared the kitchen.
When the guests arrived I told them: “And now you do the cooking, surprise!” After they had recovered from the shock, they figured out what to do. They started cooking and I stood there watching the hard-working people; a typical management role. I did this 6 or 7 times and it was always a success.
Notice that I didn’t manage the people, I managed the system around them. They self-organized in my kitchen and they strengthened ties across departments. They baked lasagna in my favorite salad bowl. But at least for a few hours, there was happiness of employees. I’ll give you another example. Let’s say your manager is Jim. Jim wants to celebrate a big new sales contract, maybe with a Moulin Rouge-style party.
But he sort of forgot to ask the production team if the new delivery deadline was even theoretically possible and something worth celebrating. Another scientific test: If you know managers like Jim, promising these things to customers, at the count of three say: “Swimmy Jimmy”. Here we go: 1, 2, 3!
Audience: Swimmy Jimmy!
Wow! 89.2 % of the audience knows people like Jim. There is nothing wrong with celebrating sales if the rest of the company is happy as well. I once discussed it with my CEO and I said: “I think it is good to help our team celebrate things, maybe help them to make a bit of noise.”
Two months later he came to my desk with a big copper ship’s bell. He said: “Here is a bell, now start celebrating!” I was like: “Oh, awesome! A big bell!”
So I brought the bell to the office police — Sorry, the office manager, I mean — and I asked her to place the bell near the coffee machine. From that moment, anyone was allowed to ring the bell, to celebrate success, or to celebrate a learning experience. The bell added a bit of playfulness to the office. It also added a big terrible noise for 5 seconds when somebody rang it. Then 100 very curious and slightly deaf employees would gather around the coffee machine to learn what the celebration was all about.
The last time I heard the bell was when the CEO announced to the whole company that I had just quit my job. It is important to know that, for me, this bell was a learning experience, a management experience. I thought: “Can I get 100 employees to just drop their work and celebrate something together?” Well, I learned that I could. And by increasing these experiments, I started learning faster.
Here is another example: Let’s say your manager is Mick. You once asked Mick for some budget to attend a conference, maybe a TEDx event, or you asked him to be allowed to work from home, or maybe you just wanted a more accurate job title. But no matter what you ask for, Mick always says: “No, sorry. No, we cannot do these things around here.” The last scientific test: If you know managers like Mick who always say no to anything that you ask, at the count of three say: “Tricky Micky”. All right? Let’s test: 1, 2, 3!
Audience: Tricky Micky!
My god! 99.8%! Except those 2, they are facebooking over there. I can see that! Managers make employees sign contracts, but the problem with contracts is they impose limits on people’s freedoms and happiness. That’s why I have decided to have no contracts with my current team members. It’s an experiment! This is the results of the experiment so far. They seem happy to me. When anyone of them says: “Next month I would like to work from Bali, at half of my productivity.” I say: “Well we have no contract so go for it, we’ll figure out how to make it work.”
Or when one of them says: “I would like to have a different job.” They write their own job titles. Our chief geek, our zookeeper and our project bottleneck… They have no contracts limiting their creativity. And my own title of Emperor God Overlord suits me quite well. I believe that having no contracts forces us to keep everyone happy. Because at any moment, any person can say: “Screw you guys, I’m out of here!” Some people see this as innovative management. I see it as helping us to focus, not on time and locations and titles, but on meaningful products and services.
Here is one of the worst management practices that I have ever experienced. It was many years ago, when I was working at a big company. The top managers wanted to incentivize some of their employees through a bonus system. Interesting idea. But in order to calculate who should get how much, the CFO had a big spreadsheet full of data about everyone. It contained people’s current salaries, seniority levels, clocked hours, overtime hours, performance ratings, years of employment, sick days, and much more. I’m quite sure somewhere in there, it also had people’s keystrokes per minute and toilet breaks per day. Anyways. Once per year based on all this data and the company’s annual profits, the spreadsheet would calculate everyone’s individual bonuses. I remember one year when the company profits were not that high some employees got an annual bonus of a staggering 20 euros. The managers received a bit more.
How many of you think that these employees felt incentivized? I think it would have done less damage to their motivation if they had been paid with fish-flavored macarons. How did I change from being a bad manager to not that bad? I showed you the seven silver bullets already. Let’s look at them again one by one. We can only address the world’s biggest challenges with meaningful products and services. This requires innovation delivery which is only possible with innovative management. Due to the ever increasing pace of change in the world, innovation needs faster learning. Researchers and scientists know that learning is optimal when we run more experiments. As children we learned long ago that experimentation is part of playing.
But people only play and run experiments, when they’re having fun and being happy. Finally, as managers we cannot make people happy, but we can certainly create an environment, a system for happiness. Those are the seven silver bullets that I found. To make this all easier to understand for the managers in this room, (French) and the directors and the CEOs, I will now show them again as a list of boring bullet points with some cheesy clipart. And I can make it even more impressive by pointing at it with my laser beam.
So with these seven silver bullets, you can now address the world’s biggest challenges. Here’s a final example. I told you about a bad bonus system. This is how my current team earns their bonus money now. At the start of the month, each person has 100 points, and they use the rest of the month to credit each other for their performance. 10 points to Vorums for helping me out today, five points to Sergey for your super-fast response, 15 points to Pillar for not killing me when I screwed up today. These points that they receive from each other, they build up over time.
As the business owner, every month I set aside some bonus money depending on the performance of the whole company. Like a jackpot, this bonus money also builds up over time. The only thing left to do is to pick a good moment to decide when to confer those credits that they received from each other into real money received. This is how we do that.
(Video) Woman: Ok dice! Come on big money! Big money! Everyone give it a kiss! Come on lucky dice, we love you. It’s a 6! Can you see that?
We have a simple company rule. At the start of the month, one person throws a dice. If that person throws a six, we pay up bonuses. No 6? No bonus! That’s it! The reason we do it like this is so that none of us can predict when it is bonus payout time. After all, we all know what happens when people are promised a bonus in December. They will have spent the money before they even received it. And when it is less than expected, as it often is, they will be demotivated. “Oh my god, only 20 euros but I already shopped that Louis Vuitton.” That won’t happen on our team. Our team loves the bonus system. They think it is their own little Monte Carlo Casino. And they can only win. I am not trying to convince you to adopt a new bonus system, but I hope that you see the seven silver bullets at work here that I apply as a not-so-bad manager. These crowdsourced bonuses, that is a system that I manage.
I do not manage the people. And the system is designed to increase the chance of happiness. More happiness means more playfulness, more playfulness, more experiments, more experiments, more learning, more learning, more innovation. And hopefully more meaningful products and services. The same seven silver bullets are applied by other manages in the world. They invite people to get to know each other better with personal maps in a playful manner. They play games in a colorful way to explore intrinsic motivation. They visualize experiments and failures to value the learning in the company. Or they emphasize thankfulness and appreciation in the company, to create an environment where it feels safe to innovate.
Last year, one team member, Jennifer, said something interesting to me, she said: “Jurgen, you’re my first manager who doesn’t suck”. I had to think about that for a moment and I decided it was probably a compliment. 20 years ago I was a terrible manager but now I don’t suck anymore. It will probably take me another 20 years to be actually any good. I have no idea what you are all planning to do for people and planet. But I hope that I can offer something to you, which is: realize your ideas with more purposeful organizations. That means: use the seven silver bullets. If you want to end up with innovative management and meaningful products, start by managing the system for happiness. I just hope that you are all faster learners than I was. Thank you.