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The Difference Between Good And Bad Organizations

I’ll elaborate on this below but here are the contrasts between good organizations and bad ones. Which one do you work for?

  1. In good organizations people can focus on the work and not office politics. They trust that if they do their job well, treat people well, and perform, they will get ahead. They don’t spend a lot of time fighting organizational boundaries or routine tasks. They are empowered and entrusted and are accountable for outcomes.
  2. In bad organizations people focus on politics and struggle to do routine tasks effectively and efficiently. The internal processes are so broken that this becomes a vortex into which seemingly all energy is sucked. Almost all projects are “successful” because there is no clear definition beforehand of what success looks like.

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This excerpt is from one of the best business leadership books I’ve ever read: The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers

At Opsware I used to teach a management expectations course because I deeply believed in training. I made it clear that I expected every manager to meet with her people on a regular basis.

Then one day, while I happily went about my job, it came to my attention that one of my managers hadn’t had a one-on-one meeting with any of his employees in more than six months. While I knew to “expect what I inspect,” I did not expect this. No one-on-one in more than six months? How was it possible for me to invest so much time thinking about management, preparing materials, and personally training my managers and then get no one-on-ones for six months? Wow, so much for CEO authority. If that’s how the managers listen to me, then why do I even bother coming to work?

I thought that leading by example would be the sure way to get the company to do what I wanted. Lord knows the company picked up all of my bad habits, so why didn’t they pick up my good habits? Had I lost the team? I recalled a conversation I’d had with my father many years ago regarding Tommy Heinsohn, the Boston Celtics basketball coach at the time. Heinsohn had been one of the most successful coaches in the world, including being named coach of the year and winning two NBA championships.

However, he had gone downhill fast and now had the worst record in the league. I asked my father what happened. He said, “The players stopped paying attention to his temper tantrums. Heinsohn used to yell at the team and they’d respond. Now they just ignore him.” Was the team now ignoring me? Had I yelled at them one time too many?

The more I thought about it, the more I realized that while I had told the team “what” to do, I had not been clear about “why” I wanted them to do it. Clearly, my authority alone was not enough to get them to do what I wanted. Given the large number of things that we were trying to accomplish, managers couldn’t get to everything and came up with their own priorities. Apparently, this manager didn’t think that meeting with his people was all that important and I hadn’t explained to him why it was so important.

So why did I force every manager through management training? Why did I demand that managers have one-on-ones with employees? After much deliberation with myself, I settled on an articulation of the core reason and I called up the offending manager’s boss— I’ll call him Steve— and told him that I needed to see him right away.

When Steve came into my office I asked him a question: “Steve, do you know why I came to work today?”

Steve: “What do you mean, Ben?”

Me: “Why did I bother waking up? Why did I bother coming in? If it was about the money, couldn’t I sell the company tomorrow and have more money than I ever wanted? I don’t want to be famous, in fact just the opposite.”

Steve: “I guess.”

Me: “Well, then why did I come to work?”

Steve: “I don’t know.”

Me: “Well, let me explain. I came to work because it’s personally very important to me that Opsware be a good company. It’s important to me that the people who spend twelve to sixteen hours a day here, which is most of their waking life, have a good life. It’s why I come to work.”

Steve: “Okay.”

Me: “Do you know the difference between a good place to work and a bad place to work?”

Steve: “Umm, I think so.”

Me: “What is the difference?”

Steve: “Umm, well . . .”

Me: “Let me break it down for you. In good organizations, people can focus on their work and have confidence that if they get their work done, good things will happen for both the company and them personally. It is a true pleasure to work in an organization such as this. Every person can wake up knowing that the work they do will be efficient, effective, and make a difference for the organization and themselves. These things make their jobs both motivating and fulfilling.

In a poor organization, on the other hand, people spend much of their time fighting organizational boundaries, infighting, and broken processes. They are not even clear on what their jobs are, so there is no way to know if they are getting the job done or not. In the miracle case that they work ridiculous hours and get the job done, they have no idea what it means for the company or their careers. To make it all much worse and rub salt in the wound, when they finally work up the courage to tell management how fucked-up their situation is, management denies there is a problem, then defends the status quo, then ignores the problem.”

Steve: “Okay.”

Me: “Are you aware that your manager Tim has not met with any of his employees in the past six months?”

Steve: “No.”

Me: “Now that you are aware, do you realize that there is no possible way for him to even be informed as to whether or not his organization is good or bad?”

Steve: “Yes.”

Me: “In summary, you and Tim are preventing me from achieving my one and only goal. You have become a barrier blocking me from achieving my most important goal. As a result, if Tim doesn’t meet with each one of his employees in the next twenty-four hours, I will have no choice but to fire him and to fire you. Are we clear?”

Steve: “Crystal.”

If you liked that you’ll love the book — The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers. You’ll also love this insight from Charlie Munger on bureaucracies.