Forced Terminations to Disengage Autopilot and Complacency in Organizations
An observational thought inspired by an episode of The Office where Michael Scott, Steve Carrell's character, announces to the office that their entire branch will be closing down.
If you haven't watched the TV series The Office before, I'd highly recommend it. It's amazing how many humorous corporate puns I realize I've missed every time I re-watch a past episode as I progress through my career. It's almost like a good book. For those who haven't watched the scene, the premise is that the entire office of about 20 employees will all be let go and given severance packages as the head company looks to downsize/restructure.
Everyone is shocked at first. As each character slowly comprehends what has actually happened to them and they accept their fate, they express relief.... and even joy.
The characters transition from emotions of terror to joy as they speak of moving to a different country, traveling, exploring a different job all together etc...
Then mid-way through the episode, it turns out they won't be closing down and you just see disappointment in the eyes of the characters as their planned possibilities for adventure and exploration were striped away with the reality of the fact that they still had jobs to come back to tomorrow. And of course, the "illusion of rationality" forces the characters to rationalize that the initial spark of desires for adventure were foolish and "unrealistic", though they may have probably been the most honest belief these characters had felt.
Now I get this is highly fictional but humour me by reading on. Let this crazy old soul rant.
Systems without stressors implode
This is a prime example that relates very well to Nassim Taleb's concept of Anti-Fragility.... A system that needs to embrace randomness to get off a death spiral...
See, for most people, if they were not forced out, they would never quit or leave. Some call this life-time job security. I think this is the death spiral. A spiral where without any randomness stressing the system (i.e volatility), it would just continue on without thought until it eventually implodes and results in the "death" of the individual; sometimes literally but most times figuratively, as a life without purpose was spent.
As a system is the whole of parts, individualistic implosion from such a spiral will result in a systematic failure in organizations as a whole. The great financial crisis started with individuals with poor financial discipline and, collectively, they imploded the system. Of course, the leaders of the system, the gatekeepers and the guardians had all but failed as well.
Needless to say, a system needs stressors.
It is in that thought process that I write about the value of termination.
In South Korea, termination is extremely difficult in the pre-managerial levels. On account of a few family members who work for the South Korean tech giants, managerial employees are all set with annual contracts that are renewed at the end of the year based on performance. Some may be multi-year but the annual contract seems to be the norm. Those below the manager level may be on two year contracts but it seems that they are practically 'unfireable' due to labour regulations that seem to protect junior employees. I've heard of a case where junior folks get paid time off to look for jobs because the company wanted them to quit. So instead of being fired, they were given the support of the company to find and interview for another job. But anyone past the managerial level has to assess their own career annually, not to mention be seriously considered annually for an extension.
In professional sports, like football, we see coaches getting fired constantly. Now, I think there definitely is an impatient short-term mentality that is causing this in the system where coaches may not get enough time to actually build a robust system but what if your job was contractual? There are some fields that have inflection points already.
Management consultants are expected to get MBAs after they have completed that 2 year junior period, investment bankers have the 2-3 year period before hitting associates, accountants have the 3 year cycle after getting their designation to "finally do what they really want." But none of these are hard timelines and most, if not all, require the individual employee to initiate a leap. A leap that many are in too comfortable a spot to consider making. For the many who don't leap and stick around to climb the proverbial ladder many have quite the safety net of "full-time" employment.
But what if everyone was on an annual contract? A contract that had an end date where the company and employee both had to come to an agreement for the employee's continuation at the company. This would allow the employee to have time to evaluate the opportunity they had, the future for it, and what other opportunity is out there. For the company, they too should evaluate whether the employee is an additive member to the organization and whether they see the potential in investing further into the employee or not.
I remember reading about a Facebook executive who urged his team members to look outside the company and interview at least 2x a year or something like that. Only an organization that is confident in what they can provide to their people can do that. Think about it..... an organization that takes its people for granted just because of some "brand name" will get punished if it stopped investing in their people since a brand name also has diminishing returns and also becomes a commodity eventually. But for an organization that invests in its people continuously it will be the top option despite the optionality the employees have. Most companies are not like this. Most get insulted and take it personally when they hear about their people interviewing elsewhere and they lash out negatively. They will say the employee is being "ungrateful" but it is the organization that's being childish to compensate for an insecurity they have for knowingly having failed their people.
This is the same in reverse too. An organization that wants to build a home for the best people should also focus on retaining the best for the culture they want to build and cut out the disease that may contaminate what they are looking to build. Organizations will have people who start "coasting" because they are no longer motivated in the work. Maybe they've lost interest in the mission, maybe they are not aligned with the organizational culture, maybe their not at the competency level required to succeed in their role. Whatever the reason, people can fall apart from the company for their own reasons. An organization can't please everyone. They have the core people they aim to please and that is who the company may be for. That is part of the company's corporate identity. But many employees are unwilling to leave because of fear. Fear that they may be wrong, fear of not finding anything better, fear of what society may think of them and fear of the unknown. However, it's in their best interest to have a thoughtful and caring organization provide feedback of "Hey you are not a good fit. It's in our collective best interest to discontinue this relationship".
If employment had a more contractual nature, then organizations and its people can continuously evaluate whether they are in the best position for their respective selves. This will let bureaucratic organizations think about cutting the fat faster. It will also let employees who've put their career on auto-pilot to consciously think about what they want to do, whether they really want to give this company another year of their time.
It doesn't have to be annual contracts obviously. Some athletes go on multi-year contracts and some don't. This could be same for employees. Maybe you start with a 2 year contract but after which you want to re-align incentives so you could propose 5-year contracts to be measured on creations of longer-term projects. The focal point is the idea of a start and end date. An end date where both parties are forced to actually "think". To get off their asses and actually introspect on the year or years and evaluate whether what they expected and planned for came to fruition or not.
Right now we are just flying on auto-pilot
I think the overwhelming thought amongst most people is "job security". Those who seek cushy government jobs with guaranteed employment for no effort. Yes I do stand by this statement. It's not 100% but a great majority will not be able to say their paycheques are warranted in my opinion. But I find this to be quite a systematic problem. The proverbial drug of choice for the employee is a salary and promotion. This is what many look for and such drugs allow many to go on autopilot for with time and a bit of effort both will be readily provided.
"The unexamined life is not worth living" - Socrates
However, an organizational structure that forces examination by both parties could break this form of auto-pilot. Sure, companies have annual performance reviews but those are mere HR formalities that just result in 'time-suck' and more paperwork. It really isn't as effective as it should be. Maybe that was the intention. To create an effective system, I believe the environmental construction is essential and constructing an environment with the right incentive systems is crucial. A crucial part of that is forcing people to reconcile what they've done for each other (themselves and the organization) and see if the relationship is worth continuing or not. It's about having a relationship that is always in the best interest of all parties involved. It's not enough to just say that but by implementing systems that may appear "cruel". I don't think contractual forced terminations are cruel but the soft "you're a special snowflake" society may beg to differ because apparently when you bust your ass in university you are "deserving" of some full-time guaranteed employment. Foolishness.
This would actually be something I'd love to implement as part of an organization's structure. What are your thoughts?
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