 In this session, we will be addressing lessons in what it is likely to cost when people, yourself included, work to change orientation to performance. It is a difference between getting ahead and delivering what people value. It includes addressing the costs of change. As in most lessons, we tend to be consistent. We, being human beings, learn to react to our environment in highly predictable ways. Change will involve accepting a cost to gain a benefit. The investment has to be good enough to not only support our personal efforts, but to bring people together to accomplish what people can value. We will also be addressing the privilege approach to management and some of the challenges inherent in its use. As an immediate challenge, consider Eiffel Tower Management. The higher you get in the modern organization, the fewer people get managed. While the foreman manages 10 to 25 workers, none of whom is able to manage themselves effectively, senior leaders, I'll say the area chief, may have just five people to supervise, a secretary, an office records clerk, and three plant managers. And just when you ask why he has so few subordinates, I point out that the secretary and clerk do not do performance. They team with him in managing his office and in the work it does. We have a team of three, managing three responsible subordinates who are all quite capable of managing their own efforts. It is not until you climb to the top of the organization that you again find 10 to 25 subordinates answering to the CEO or president, back to someone who has to take responsibility for the operation of the larger organization. We know that something is not working all that well. There is a with a reality creeping in here, a performance observation that is somehow hidden from those who are working in management. What they see is that they are effectively and competently attending to the assigned duties of their offices. They are doing the right things as competently as they can be done. Of course, this is not the first time we encountered this general approach to working. It was back to before Frederick Taylor's scientific management approach. It was where the workers were each working as independent units, just doing what they had learned to do to be effective in doing their jobs. There is a good witness to what was and was not accomplished by application of scientific management. The difference is example in the different approaches used to hire employees. It is seen in the dichotomy between hiring production workers to work and hiring management workers to fill positions. Production workers are to answer to those who will team their efforts. Management workers are to perform the duties of their offices and teaming is just a potential add-on to what they are hired to do. Production workers are maintained as employees by their contribution to productive results. Management workers are maintained as employees by their ability to do their job in accord with job-based performance plans. Production workers are only subject to promotion for longevity and service and entrance into performance management or performance support positions. It is management workers who are promoted based on evaluations and general agreement among superiors that they are the best ones to serve in some higher level position. The challenge becomes more visible when addressing advancement. It is an established competition among management employees who are considered eligible for a higher position. Competition kills performance. It creates drama in place of results. Contests establish win-and-lose situations. It changes agreements that draw people to come together to see to their commonly valued results. Even the results, the advancement of one person among several, accomplishes nothing that has individual value. There is no real difference in getting things done by having one person or the other win the contest. To the contrary, it is likely to be valued by one who has been promoted and to be opposed by others. It does not even promote later teaming. And this isolates employees, both winners and losers. It is us and them management. It is replacement of performance with office politics. It is with this observation that we can make some sense out of the Eiffel Tower management structures. It is the us and them approach to management that sets the office manager in authority over both the office and subordinates. The clerk and the secretary are not hired into authority but are hired to work in direction of the one who has been granted privilege in the exercise of the authority of office. The office aides do not share in the authority of the office. They are them commoners rather than us leaders. These office workers are approached as assets to direct even as the office holder can direct subordinate officers. It is natural to count them as being supervised as authority based management does not deal well with teaming. It is notable that the one who has teaming skills will not try to apply authority to manage the work of these office assistants but will effectively team with them. That is both effective and is human. They will team to perform the work of the office, coordinating their efforts to get things done. The challenge only arises in the exercise of authority and in comparison with other managers for purposes such as competing for still higher office. Authority based competitions produce only waste and reward efforts that produce nothing for others to value. Our history points to the melding of authority based structures in commerce with like structures that are being formed in governance. This does make sense in terms of the founding of our government and the inability of common people to see themselves as owners of their nation. To the contrary, those elected into public office were addressed as being promoted into office rather than being effective representatives of voters. The general approach to political potency was in terms of the authorities of office, not to any purpose for there being an office. The purpose in accord with the principles of administration was in terms of authorities granted an exercise in fulfillment of some purpose for election. Instead of running the corporate business, it was running the corporate unit of government. Instead of business leader goals and objectives, we could see political purposes for those who run the various elements of government. Instead of the elements of government teaming to meet some constitutional performance purpose, we have isolation of internal units and exercise of their granted authorities. They are approached as being in competition with each other for it is unclear that there is no purpose to be served by such a competition. It is right back to the common observation that competition kills performance. Authority structures resist any attempt to address some purpose other than what those in authority accept as their unique purpose in being in office. Government leaders with this understanding of their authorities and duties of office are the ones who created corporate entities. These did see to the futile purpose of bringing order out of the chaos of revolution of rejecting the sovereign authority of England. But also replaced it with authority of American leaders rather than recognizing any authority in we the people. It did so at the expense of teaming. It isolated those in authority from one another and set them into competition. This was even given a name, checks and balances. The working theory was that the government was so designed that its natural excesses from sovereign authority would be contained by internal competition among government branches. Of course, this is theory only. On reading what is written into our constitution, it addresses how the elements of government are to work together to get things done on behalf of we the people. The concept of governmental sovereignty is just not there. Establishing sovereignty in government was allowed by the people who were unprepared to accept their citizen ownership. Those who were elected assumed their authority to run things saw through the challenge of commercial chaos by setting up new corporate business authorities and they granted to these corporate persons authorities that exceeded what could be claimed by commoners. And so it has become common witness of family businesses seeking incorporation as a way to protect themselves from actions by commoners and protecting the family leaders from the challenges that might be raised by employees or customers. Any increase of citizen rights and protections through incorporation witnesses to the reality of us and them political leadership. Common citizens are treated as subjects that serve those who govern, not as public owners of the nation. Along with the shift of management away from the family and toward hired business leaders, we have the shift of family members from business owners to employees. We have contracts for employment that specify pay for the rental of the worker. It was expansion of master and servant law to provide a basis for the rental with primary agreement on the price for hours of indenture. Due largely to the very temporary nature of employment, the remainder interest of the employees were subject to significant legal protection. The corporate masters were soon held accountable for protecting the persons they hired from harm that might come to them as they fulfilled their worker obligations in accord with their employment contracts. Workers were gained by corporate business as performance units that could be directed to fulfill corporate purposes in accord with assignments and directives issued by corporate authority. This did promote isolation of the worker as the unit of production and it arranged for us and them relationships between business and employees. Corporate leadership accepted themselves as the family who gave purpose to the organization, further promoting that division. It was just enhanced by having a leadership family setting the direction of action for the larger effort. Taylor's scientific management efforts tore a huge hole in this. It exposed the inability of corporate leadership to get performance through its us and them approach to employment. Teaming workers yielded such results that the reality of corporate inability could not stay hidden. Reality of performance became a problem for authority to resolve. There were early attempts at resolution through using the lessons of scientific management to improve the processes of authority-based management. The ability to measure performance was especially attractive as there were actual measures for what people could be called to do. It just failed in reality when they tried application. Reality just would not honor the value of having the right people running the organization. The division between management and labor was being pushed by the ability of workers to perform and worker performance was a reality that had value to everyone. Common complaints were raised in authority circles that this scientific management just did not work. But reality was still there. The division just became more pronounced. The new performance manager, the foreman was just too valuable to deny and the administratively preferred boss was rapidly replaced. Again, the management approach to teaming the workers could be published as of limited management competence, but the result would not be effectively denied. Teaming workers was just too valuable to be avoided. Administrative management continued at the leadership level and was implemented through management workers. These right people at least would be more responsive to directives from authority. They would answer to their contracts and seeing to the goals and objectives that would come from management system resources, answering to authority per their contracts. Administrative leadership retained its authority structure with the leadership family in place above the wall and they would see to the running of the business. The only way for their hired commenters to get across the barrier was by invitation. They would have to fit into the family. The same sort of challenge was also being faced by political leadership. There was a reality of citizen ownership of the nation. Those who were elected could not really isolate themselves from the public that elected them. Attempts to do so, seeing to exercise of authority that were a challenge to the people could easily lead to their physical replacement in office. There was the reality of a need for personal election to stay in authority. The drama played out in the law court says to corporate relations, the barons of industry sought legal protection from the corporate owners and employees like their governmental authorities had from their voters. They sought protection from the results of their performances on behalf of the corporation. With futile orientation in government leadership, this was often honored as good for business. To the contrary, granting special protections to corporate leadership was a challenge to common citizens, the actual authority behind government who were to be the ultimate beneficiaries from their being corporations. Special privileges from being hired to lead were challenged by those who were being divested of their equality before the law. It was a dramatic conflict between the privileged leadership and the public that really was privileged as owners. They were set in competition and competition kills performance. On one side, we have the authorization and empowerment of government leaders. It was accepted as reality because it was effective. Those who were elected were also effective in exercising privilege and were personally honored for doing so. The corporate leadership that was arranged by privileged leaders to support business growth were built on much the same foundation, the developing legal structure of the business corporation accepted like privilege in industrial barons. Government leaders were harvesting what they taxed from commoners for seeing to the welfare of the United States and business leaders were granted authority to direct what they controlled to the corporate business for the good of the business. On the other side, we have we the people. The source of drama is that the United States was owned by the people of the United States. It was the same challenge in the corporate business having people as owners. The drama is also real. It is seen when the good of the nation seemed in conflict with the welfare of the people. Do you need an example? History provides one that we have been taught not to see. One that is almost too poignant to acknowledge. We call it the American Civil War. The cry is that this had something to do with slavery. But the performance truth puts it in a vision that is so contrary to what we receive as public education that it defies even its presentation. Performance is determined by accomplishment by comparing cost incurred to the value of the results accomplished. Our starting point just highlights the diversion of performance thinking from what we are taught. Nobody ever wins a war. The more you have to expend upon it, the less you have when it is over. War produces damage, not something that is valued. Wasn't this about freeing the slaves? Go ahead and ask those who are slaves and children of slaves if they are free. Whether reality or not, we have been taught that the war failed even to do this. It was just killing off a significant part of a generation of American citizens. It accomplished little of value that was actually received by anyone except privileged leaders in government and business. And even those leaders didn't receive much out of it. Wars caused damage. They do not produce anything to be received and valued. A civil war is even worth. Both sides lose. The longer and harder the conflict, the greater the loss. The deeper you go in trying to understand this disaster, the worse it becomes. The purpose of constitutional government was to create a union. That was the purpose sworn by each leader whose contributions to government brought about the division of we the people. The leaders of the day divided up by privilege, deciding which Americans they would support and overcoming the rest. We do not elect leaders to represent the right people, but to represent the people who elect them. If the people are in disagreement, there is no basis for leaders taking sides. Consider using the performance tools we now have available for use. The black box is a good beginning. We have government as a provider and we have we the people as the customer. We have the cost of American lives as part of the cost along with the damage to resources. On the value delivery side, we have what? Privilege contends that this was for the good of the nation. What I tell you is that we the people are the nation. If it is not for the good of us as citizens, it is not good for the nation as a corporate body of citizens. But I have to pause here. Consider what we have just accomplished. Not only have we assumed a second way to understand our history, one that is new to most of us, but we have also just witnessed how this can be presented effectively to others. It is how it was presented to you. Indeed, we have a first few hours of orientation and a few new tools supporting this alternative understanding. But there is still the question of it being so stark a challenge to what we have heard elsewhere. How is this even possible? As stated at the beginning, I am not rewriting our history. None of the facts are being questioned or changed. Performance is built on vision, on technique, on a focus of what can be valuable to all who receive it. Alternatives to civil war abound. All it takes is effective vision on what we should be receiving. It is looking for something that people can value. That is what performance orientation sets before you as an alternative to just accepting moral judgments on historical facts. So what do we see applying these tools to the formation of corporate America? We see privilege-based governance efforts authorizing and empowering the barons of industry and freeing them to see to the interests of their individual business domains. What gets delivered to the owners, to we the people, is there some value that we receive in the actions that empowered business leaders? If we do not receive it as citizens, then we the people do not receive it as a body. Under our constitution, we are the only party in interest and government was authorized to bring us to unity and to serve our welfare. If we do not receive from our government's actions, then those actions have no value. There is great consistency in the nature and activities of privilege. We have corporate business leadership acting on behalf of the corporate business, even as our political leaders are intent on acting on behalf of the nation. We are the nation. There is no other nation to serve. In a like manner, we have to ask, who is being served when you serve the business? Isn't the business owners? We have that ultimately contrary action of business leaders determining what they will deliver to corporate owners as benefit for their contributions. Is it the employees? We have that ultimate witness of the division between management and labor. It has threatened such damage to working employees that many have formed to support labor unions. They too are a cost that has to be paid by someone. Is it the customers? Someone is paying for the ineffectiveness of management where labor and management are aligned against each other's purposes. Conflict indicates cost, not performance. Customers bear that cost in terms of prices for corporate goods and services. And then we have the final insult. Is it the privileged leadership that is being served? The first answer might be that they are the only ones being served. But then what is it that they both receive and value from our serving of the business? They are self-isolated by the effort. They are denied the benefit of teaming effectively with others. They are given competition in place of companionship. They are set into a background competition with other business leaders, those in whom they otherwise share some business leader family purposes. What they do get is effective privilege, access to the resources that belong to others, authority to act on behalf of the corporate business. And they get to dip their hands into the pockets of owners and other employees even to the point of challenging profits. And it is not just that our business barons get to act as privileged people. They get the protection of government in doing it. Government protection is as witnessed. It is why family business is getting incorporated, why citizens would seek to redefine themselves and their families under the laws of incorporation rather than just being common citizens. Privileged business leaders are protected from the consequences of their actions on behalf of the corporation, while us commoners are not. It is our private and family property that can be seized if we injure someone else, but not the family private property of the corporate owners. Privileged leaders are not legally responsible for what they do as business activities. And there is the wisdom of management in this. You never give authority to a person without accountability for what they do. That is a bad management practice that is universally recognized. Bad management is part of privilege. The very purpose for privilege is to avoid being answerable for what privilege allows people to do. If commoners get hurt, well, that is just too bad. As long as there is no proven intent to do harm, the privileged leader continues in authority. Our industrial revolution created chaos by effectively eliminating family purpose from the operation of business. This was a deep cultural change, a turning into uncharted waters and management suffered severe losses when its historical purpose was suddenly denied. There was a whole new purpose, but it was not the purpose of the family owners of these corporate entities. Owner purpose was reduced to holding investments and welfare of owners and their families was quite suddenly pushed outside the corporate purpose. The new common purpose was return on investment. It was paying the family for providing resources for corporate use. It was like employment, honoring the corporate operation instead of directly serving the needs and wants of the family that made the investment. There was the corporate purpose defined by those who set up the corporation. They had wants and needs and gave purpose to their legal corporate creation. There was also some purpose in the public that was to be served by the laws under which the corporate entity was given a right to exist as a legal person. The heart of the challenge was that the creators and initiators only had influence upon what they created if they could become rulers over it. And the public leaders had generally disputed any public purpose as limitations on what they sought to accomplish in promoting the existence of these corporations. They operated as privileged leaders, not as true representatives. And so the corporation hired its own new class of professional leaders, much as the government had become people by professional politicians. These claimed their own expertise as basis for their actions. They served the corporation as if it was a privileged legal person. They had become the us of a corporation as a family. They assumed effective ownership and they also found themselves as effective family that could set their leader purpose upon the corporation. When it came to actual owners, they were just faceless investors becoming more and more distant from any effective authority. That was further enhanced by the business of investment where businesses represented those faceless owners and the businesses were themselves corporate entities that answered to their own internal authorities. The relationship with owners became impersonal. The corporation became the center of business with the purpose set by corporate leadership and corporate leadership provided new directions to the benefit of the corporation. It was the start of goals and objectives. So where was performance in this? If the leadership wanted people to do performance, it would hire them. And that is there for all to see. The divide between management and labor had a whole new definition. It was no longer us family members hiring them workers to better see to our family purpose. It was us corporate leaders hiring them workers to operate the business. So there we have it. It is a corporate leadership that is isolated from its owners intent on doing what they feel is best for the corporation. It is a corporate leadership partly protected from most customer complaints. It is a corporate leadership that has accepted a different purpose than the workers who are hired into the business. They became like feudal barons with resources of their corporations as their feuds and they purchased commoners to do the work. But this was even better because they got to pick and choose who would join the family. There was not going to be dissension with that. They could decide what leaders they were going to allow into authority. They could pick their own leaders. The challenge of scientific management came crashing into this legal fantasy world. It came with the promise of replacing the leadership with something that could be a lot more effective for the owners, workers and public customers. Privileged leaders faced an annoying challenge in this new performance concept. One that came with the reality witness that could not be brushed aside. It challenged privilege itself. Corporate leadership exercised its privilege and isolated the production areas not fully part of the corporation. It did not operate with the rest, honoring the goals and objectives of those who were its leaders. So how much does it cost to gain performance through those who are doing the work? The harsh truth is that corporate management was under its own self guidance, operating poorly. It was not getting things done through those who were hired to operate the business. The more that leader goals and objectives were given effect, the lower the performance actually accomplished. The size and cost of management continued to grow relative to the areas that used performance orientation as a basis for their actions. The continued witness to this was an irritant, an itch to be scratched. Leadership discouraged performance by hiring those with more acceptable skills to service performance areas. In long term, they encouraged the abandonment of scientific management expertise in favor of those who were better prepared to serve the corporate purpose set by leaders. Leadership discouraged performance orientation and performance management, largely by enlisting these leaders to accomplish their group efforts in light of established goals and objectives. To finally bring this to purpose, I have seen a few recent articles that promote going back to the workers to establish work process. They are, after all, the only ones who are closest to the efforts and the ones who are hired to know their jobs. While I have not seen witness to a lot of movement in that direction, I do see the performance perspective. That was the boss approach to performance that had been abandoned in the early 1900s because it could not compete with even primitive applications of scientific management. In that boss vision, the purpose of the local manager is to direct each worker to their individual tasks on behalf of senior management and to receive witness to the completion of each assignment. That did work well for the business as a family where the purpose was the welfare of the members of the family. Even though the hired help was directed to tasks, there was an understanding that each task would be for the welfare of the family in charge. The family purpose provided a cohesive force to everyone's efforts on behalf of the business. The boss was there in larger groupings with the understanding that he too shared in that same purpose. It was a shift from family business to corporate business that challenged this. It was the assumption of hired leader purposes in place of family, the depersonalizing of business that separated worker purpose from leader purpose. Corporate leadership then intensified the challenge by hiring people to operate the business for its purpose but insisted on privileged interference in that operation. Leaders insisted that it was for the purpose of properly and effectively running the organization. Feudal approach does work even if it is not very efficient. It also is wonderfully stable, resisting almost anything that might be different in its operation. Feudal leaders do quite well harvesting their own benefit from the work of those who answered a feudal authority. But something was very different with business incorporation. It was the requirement for a feudal baron to live on the land and among the peasants who worked the land. This separation was social, not physical. While the baron had a different society, they still lived as surrounded by peasants. Our commercial barons were far more distant from workers. They did not have to live in the same neighborhoods nor shop at the same stores nor deal daily with them. There was a glass wall, a privileged barrier erected. The separation was more complete. Leadership did not have to respect the worker. If a worker got out of line here, she could be replaced by some other worker. The sense of being in it together was interrupted. The common worker was not personally important to those who led. That was the general attitude challenge in workers where the worker no longer accepted loyalty to leadership but acted for the benefit of self and other workers before any duty to honor those in charge. It led to self-limited performance, as was noted by Frederick Taylor in his lead paper. Getting by that was key to increasing the value of workers to the business. Our next effort will be focused on the actual principles that were developed by the founders of scientific management. It just started with Mr. Taylor. It expanded and grew to become foundation for both the modern foreman as implementer and the industrial engineers as technical supporters. While modern management education looks back on these with suspicion that they were problematic and basically unfair to workers, we will be addressing performance perspectives. In specific, this included drawing people together and empowering them to accomplish what they valued. This will not be heaping honors on business management for the wonderful things they have accomplished through their focused and intensive application to effectively run their organizations. True to performance orientation, it will focus on inputs and outputs as opposed to what either workers or leaders might prefer to have as a basis for their understandings.