Charles Barkley, Hierarchy, Incentives, and American Management

Bounties in the National Football League (NFL)? Most fans were appalled when former professional basketball player, Charles Barkley, disclosed on The Dan Patrick Show that players will pool money, called a bounty, which goes to the player who hits an opponent hard enough to intimidate him. With a group competing for the bounty, the opposing player is in for rough time.

“You have to be a punk to snitch that out,” said Barkley, now a sports analyst since retiring from the National Basketball Association (NBA). Athletes are upset not at the prospect of losing their pool but at the “snitches” and “punks” who gave the information to the NFL. I bet if their money was invested with Bernie Madoff, the admitted operator of the largest financial fraud in U.S. history, they would have appreciated a few punks around.

Unfortunately, Madoff wasn’t the only rotten CEO of an American organization. L. Dennis Kozlowski, John Rigas, Joseph Nacchio, Bernard Ebbers, Kenneth Lay, and Jeffrey Skilling come to mind, too. In some cases, one brave soul came forward and said, “Something is wrong here.” A snitch or a hero? It takes some nerve to challenge the hierarchy in American organizations.

I laugh at how the Sarbanes-Oxley Act of 2002, aka SARBOX or SOX, is being used in organizations. A worker can’t get access to computer systems they need to do their jobs in many organizations because of SARBOX. Only the hierarchy has access. However, wasn’t the intent of SARBOX to stop executives from stealing the crown jewels of an organization? Most auditors are in the hierarchy… and who wants to challenge the organizational hierarchy when you are in it or paid by it?

So, back to Charles Barkley and street justice belonging in the family. This street law exists in management, too. Put your head down and go with the flow; that’s what good, obedient managers do. Respect the hierarchy and you get ahead; challenge it and you are a great candidate for the scrap pile.

Bounties and incentives

I listened to Mike Golic and Darren Woodson of ESPN talk about the bounty program and how it was used as an incentive. Woodson rationalized that the incentives were not much money in his playing days and didn’t really make much of a difference in his behavior. I hear the same rationalization in organizations about how workers are not really motivated by the “small amount” of incentives that workers get.

Incentives, even small ones, do indeed drive behavior. Further, incentives always drive the wrong behavior (big or small). They become the de facto purpose of those on the receiving end, when the focus should be on the customer. In sales, this results in overselling to customers and predictably this comes back in the form of waste (returns, missed payments, etc.).

Most waste is measurable, except we always seem to have one function responsible for revenue and one function responsible for cost. In recent decades, operations has taken a back seat to the sizzle of sales. The need to drive revenue has practically drowned out any complaints about waste.

What to do instead

Improvement in organizations doesn’t require incentives or misguided management hierarchy; it requires changing our collective thinking about the design and management of work. The only way to change thinking in organizations is to have strategies to gather data (evidence) concerning the work instructions employees are following and the processes that management are using, plus the way they actually work, and then unwind the assumptions associated with the work design.

My organization calls this a “check,” or understanding your organization as a system from a customer’s point of view—i.e., from the outside-in. An outside-in system includes studying customer demand and purpose, understanding “what matters” to customers in response to their demands, and reviewing the flow of the work. Most of the things that help or hinder a system boil down to assumptions management has on how a good organization operates.

Now, the hard part is that the evidence has to be empirical. Here is where decades of myth and assumptions can be unwound. These can then be replaced with new truths that many times are counter-intuitive.

Charles Barkley may believe that the NFL system needs to informally deal with the “snitches” and “punks” to make things right. But history and evidence suggest that it is unchallenged systems and incentives that drive the wrong behavior. Organizations can learn too, if they chose to do so.

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