Bad to great: The path to scaling up excellence

Bad to GreatHere is a portion of an excerpt from Scaling Up Excellence: Getting to More Without Settling for Less, co-authored by Robert Sutton and Huggy Rao, featured by the McKinsey Quarterly. Sutton and Rao discuss companies that have scaled up excellence and explain the reasons for their success. For example, before senior executives try to spread best practices, they should use seven techniques to clear out the negative behavior that stands in the way. To read the complete interview and/or watch a video, check out other resources, learn more about McKinsey & Company, and register to receive email alerts, please click here.

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Leaders who aim to boost organizational performance often start with efforts to kindle good behavior, however they define it. Yet case studies and rigorous academic research show that if you want to create and spread excellence, eliminating the negative is the first order of business. Destructive behavior—selfishness, nastiness, fear, laziness, dishonesty —packs a far bigger wallop than constructive behavior.

Organizational researcher Andrew Miner and colleagues, for example, measured the moods of 41 employees at random intervals throughout the workday. The researchers discovered that negative interactions with bosses and coworkers had five times more impact on employees’ moods than positive interactions. This “bad is stronger than good” effect holds in nearly every other setting studied, from romantic relationships to group effectiveness.

Efforts to scale up excellence stall when bad behavior crowds out good. Scaling is one of the toughest challenges that senior leaders face. Executives can always point to places where a company is doing a great job. What drives them, keeps them up at night, and devours their workdays is the difficulty of spreading excellence to more people and more places. This “problem of more” is tough to crack. Scaling requires pressing each person, team, group, division, or organization to change what they believe, feel, or do.

Eliminating destructive behavior and beliefs clears the way for excellence to spread—particularly when these impediments clash with the mind-set that propels your organization’s performance. When it comes to mind-sets, however, one size does not fit all; what is good for another company may be bad for yours. At Facebook, everyone from senior executives to new engineers lives the mantra “move fast and break things.” When we asked an executive at one company if its people lived this mind-set, he answered that “move fast and break things” was wrong for many of its businesses, especially the unit that builds software for nuclear submarines!

Negative actions and beliefs also come in different flavors. Whatever their exact characteristics, bad behavior undermines scaling efforts by introducing confusion, destructive conflict, distrust, and dead ends. To spread and sustain something good, you’ve first got to take out the bad. Seven methods can help leaders who are bent on “breaking bad.”

[Here’s the first recommended method.]

1. Nip it in the bud

In 1982, criminologist George L. Kelling and political scientist James Q. Wilson described what they called the “broken windows” theory: they observed that in neighborhoods where one broken window was left unrepaired, the remaining windows would soon be broken, too. Allowing even a bit of bad to persist suggests that no one is watching, no one cares, and no one will stop others from doing far worse things.2 The theory soon had a big impact on public policy, particularly in New York, where crime plummeted after efforts were made to stamp out minor offenses such as graffiti and panhandling.

Much research supports this theory. Charles O’Reilly and Barton Weitz, for example, studied 141 supervisors in a large retail chain. They focused on how supervisors handled salespeople who were tardy, unhelpful, uncooperative, discourteous to customers, or unproductive. O’Reilly and Weitz found that supervisors of the most productive units confronted problems more directly and quickly, issued more warnings, used formal punishments more often, and promptly fired employees when warnings failed.3

This isn’t an argument for striking fear among employees. The best bosses nip bad behavior in the bud but treat people with dignity. Mauria Finley is CEO of the start-up Citrus Lane, which sends monthly care packages of baby goods to moms. We asked her how she struck the right balance as the company grew from 6 people to 20. Finley explained that her years as a manager at Netscape, eBay, and elsewhere taught her never to withhold bad news or hesitate to tell employees when and why their work wasn’t up to snuff—but to deliver such messages with empathy. When we interviewed Finley, she told us that one of her direct reports described her as a “compassionate hard-ass.” She laughed and said, “that’s me.”

Many employees who are prone to selfishness, nastiness, incompetence, cheating, and laziness change their ways after getting feedback and coaching or moving to a workplace where such behavior isn’t tolerated. Stanford’s Perry Klebahn is known for his mastery at coaching and turning around dysfunctional teams in the hands-on creativity classes for master’s students and programs for visiting executives at the Hasso Plattner Institute of Design (which everyone calls “the Stanford d.school”). During several recent executive programs, he and his fellow coaches identified some bad apples who harmed their groups. So Klebahn put all of these destructive characters together “in the same barrel”—a new team. Then he moved it to a corner where they wouldn’t infect others and recruited a no-nonsense coach to guide them.

This technique works. A couple of bad-apple teams have performed poorly, but a few others have produced “shockingly good” prototypes of new products and improved customer experiences. When a team filled with alpha types has a coach who can handle them, constructive dynamics often emerge. Although those big personalities may trample on less aggressive people, a “balance of power” emerges when you put a bunch of these overbearing types together. Such people, Klebahn observed, usually have lot of energy; the trick is getting them to channel it toward the design challenge rather than pushing around their teammates.

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Here is a direct link to the complete excerpt.

Huggy Rao is the Atholl McBean Professor of Organizational Behavior and Human Resources in the Graduate School of Business at Stanford University. Robert Sutton is a professor of management science and engineering at the Stanford School of Engineering and a professor of organizational behavior, by courtesy, at Stanford’s Graduate School of Business. This article is adapted from their new book, Scaling Up Excellence: Getting to More without Settling for Less (Crown Business, February 2014).

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