it Figure 15-2. Dozens of human figures emerge from the square. Here are just a few.
still need to listen, carefully, and they need to open the channels for others to talk, listen, contribute, and reflect. They need to encourage people to tell each other stories-that's the essence of the sharing of best practices and to understand them the same way to build a culture of organizational learning.
Open communication that leads to shared knowledge is easier when organizations are relatively homogeneous, as in Japan-or when everyone in them shares the same aspirations. But when people take pride in emphasizing their differences and seek sovereignty for their own cultural group (as in current movements throughout splintering Eastern Europe), the ability to take an other's perspective which is fundamental to good listening becomes both more difficult and more essential. Indeed, many managers consider cultural differences the number one barrier to successful alliances and partnerships.
Sometimes relationships improve when participants listen to feedback about how others perceive the same situation. One executive from the United States who now heads a British company learned by trial and error that behavior lauded in his pre was considered "pushy" by his previous American jobs a new European organization. But often it is important to go further. Irene Rodgers, director of a Paris-based consulting firm, an alyzed breakdowns in negotiations between Anglo-saxon and French managers. She found that participants often lacked concrete knowledge about the organizational context from which their adversaries came. For example, British interviewees felt the French took too much time in negotiations and attributed this to their cultural emphasis on personal relationships. In fact, in many French organizations, the negotiator is often not the decision maker, he chats to fill the time until he can get to the boss.
Understanding context is one part of effective communication. The other is making tacit assumptions explicit-that is, making persona knowledge accessible to others, as Japanese expert Iku jiro Nonaka puts it. "The learning organization must be a teaching organization" to help professionals analyze their work and spread their craft to others. According to Nonaka, the ability to translate subjective understandings into objective information is exactly what makes Japanese organizations learning-rich innovators. Similarly, judges for the US. Malcolm Baldrige National Quality Award have reported that they want to see the subtle harmony that occurs when functions are tuned to the same wavelength translated into hard indicators of performance. People must be willing to articulate what they know, share what they feel, and make others aware of their assumptions and ways of working.
Even so, no amount of sharing and communicating may be enough to overcome barriers between organizations or people Sometimes people want to see things differently because of what they stand to gain or lose. In cross-border alliances, disagreements often reflect divergent strategies, not national misunderstandings Tensions increase when both partners are strong, presumably because both have interests they can legitimately push. Thus the effectiveness of soft management depends on a number of hard realities. Unbalanced incentives can interfere with any relation- ship regardless of how well those involved understand each other. Some conflicts that supposedly reflect cultural differences are really power struggles. In one European a consortium, the Italian representative succeeded in having a major project named
16 The Attack on Pay
Status, not contribution, was traditionally the basis for the numbers on employees' paychecks. Pay reflected where jobs rank in the corporate hierarchy not what comes out of them. Today this system is under attack. More and more senior executives are trying to turn their employees into entrepreneurs-people who earn a direct return on the value they help creat in exchange for putting their pay at risk. In the process, changes are coming into play that will have revolutionary consequences for companies and their employees. For example:
- To control costs and stimulate improvements, a leading financial services company converts its information systems department into a venture that sells its services both inside and outside the corporation.
- In its first year, the department runs at a big profit and employees begin to wonder why they can't get a chunk of the profits they have generated instead of just a fixed salary defined by rank. In exchange for wage concessions, a manufacturer offers employees an ownership stake. Employee representatives begin to think about total company profitability and start asking why so many managers are on the payroll and why they are paid so much.
- To encourage initiative in reaching performance targets, a city government offers large salary increases to managers who can show major departmental improvements. After a few years, the amount in managers' paychecks bears little relationship to their levels in the organization.
In traditional compensation plans, each job comes with a pay level that stays about the same regardless of how well the job is performed or what the real organizational value of that perform after an Italian hero. One British observer thought this was because Italians are especially conscious of symbols; however, others suggested it was an example of a smaller partner seizing any opportunity to assert will over larger, more important partners its Understanding Italian culture would not have helped in this situation as much as a grasp of power dynamics. Even the best listening skills cannot paper over power games.
Furthermore, the soft side of management is inevitably imperfect. The more managers acknowledge their vulnerabilities, the more chances there are to slip. When information is widely shared, mistakes or setbacks are more likely to be exposed. In creased communication simply whets the appetite for more, which explains why some of the corporations known for good communication still get low ratings on employee surveys. As high-participation organizations have discovered, employee expectations about how much say they have in a business often cannot be fulfilled by management.
Willingness to be exposed has a cultural component. Americans are noted for self-disclosure as well as their interest in the inner workings of others. International participants in Harvard's Ad vanced Management Program marvel at the willingness of Americans to discuss organizational matters Europeans and Japanese consider private company secrets. (One Japanese executive con- fessed that his company sends people to U.S. business schools for just that reason.) Perhaps Japanese organizations appear so per fect to Westerners because so little is known about them from inside. When a glimpse of the private side is permitted, cracks appear in the facade of harmony and consensus.
There is nothing cushy about the soft side of management It involves hard work. But a sense of humor can help smooth the rougher spots. Now where should we take those penguins to day…?