Under New Management

What if the best thing you could do for your business was to break away from conventional management wisdom?

1: Happy Employees Make for Happy Customers

Traditional thinking says the customer is king, but modern management flips this script. By focusing on the happiness and satisfaction of employees, businesses can create an environment where customers naturally benefit from better service.

When employees are content in their work environment, they’re more engaged and motivated, which leads to improved interactions with customers. Research by Stephen Brown and Son Lam of the University of Houston proves that customers perceive better service when dealing with satisfied employees. Interestingly, this applies even in settings where there’s minimal employee-customer interaction.

Fostering employee happiness often means reducing micromanagement and implementing trust-based rules. For example, Netflix’s approach of allowing employees to set their own schedules and take discretional time off has resulted in reduced costs and a more dedicated workforce. Trust breeds loyalty, commitment, and a willingness to contribute to the company's success.

Examples

• Netflix’s unlimited vacation and self-managed schedules.
• The University of Houston study linking job satisfaction to service quality.
• Reduction in costs seen at Netflix despite minimal rules on expenses.

2: Let Team Input Guide Hiring Decisions

Right-fit employees matter more than superstar credentials. Bringing the wrong personality into your team can ripple negatively throughout the workplace, even if the candidate has stellar qualifications.

Whole Foods takes an unconventional approach by involving the entire team in the hiring process. Prospective employees work with their potential team members for a trial period before the team votes on the hiring decision.

To handle disengaged workers, paying them to quit can actually benefit the business. Zappos offers a “quit bonus” to unhappy employees, recognizing that a dissatisfied worker can harm morale. Employees who take this offer find it easier to leave on good terms while companies preserve focus and productivity.

Examples

• Whole Foods’ employee vote on hiring decisions.
• Research indicating diminishing team performance from ill-fitting hires.
• Zappos’ offer to pay unengaged workers to leave.

3: Flexibility and Self-Organization Are Triumphant

With the rise of knowledge workers, modern businesses must prioritize flexibility. Delivering creative or analytical work often means departing from rigid role assignments and embracing shifting project priorities.

Instead of fixed organizational structures, successful teams create fluid project-based arrangements. Employees may assume different roles depending on which team or project they are on, and this flexible dynamic fosters agility and creativity.

Self-organization also empowers employees to adapt swiftly to changes. This autonomy allows a faster response to new challenges without waiting for managerial guidance, fostering intrinsic motivation, and a sense of ownership among workers.

Examples

• Knowledge workers’ dominance in today’s economy over manual labor.
• Employees forming ad hoc project groups to address dynamic tasks.
• A study that found intrinsic motivation grows when people control their roles.

4: Create Versatile Workspaces

Work environments should offer both open and private spaces to match the nature of the task at hand. While open spaces encourage collaboration, they also cause distractions like noise and reduced privacy.

By offering the choice between open-plan areas and private pods, companies can serve their employees’ diverse needs. Research by So Young Lee and Jay Brand shows that providing options for workspaces boosts satisfaction and reduces absenteeism.

Facebook’s combination of large open areas with smaller, closed workstations exemplifies this blend. Employees can chat and brainstorm in open spaces, then retreat to private areas to focus or work without interruption.

Examples

• Study highlighting pros and cons of open offices.
• Facebook’s mixed-design office strategy.
• Reduced sick leave linked to workspace flexibility.

5: Limit the Distraction of Emails

Emails are a constant distraction, pulling employees’ attention away from meaningful work. Statistics show that workers check their inboxes an average of 36 times an hour, breaking their focus repeatedly.

France’s Atos SE replaced email with an internal social network that lets employees seek information instead of being bombarded with it. Their new system minimized disruptions, allowing for more productive, deep-focus work sessions.

By switching to systems that prioritize intentional communication, businesses can foster productivity amidst fewer interruptions.

Examples

• Employees checking email an average of 36 times per hour.
• Atos SE’s switch from emails to an internal network.
• Focus improvements seen in workplaces with reduced email reliance.

6: Collaborate With Competitors for Mutual Growth

The fear of losing information to competitors can inhibit necessary collaboration. Boston’s Route 128 thrived early on but fell behind Silicon Valley because of its strict non-compete clauses.

Silicon Valley, on the other hand, embraced the free hiring between companies, facilitating innovation. Allowing employees to move around created a thriving network of ideas that benefited the entire region.

Affiliated alumni networks and open communication between businesses can reinforce these connections, spreading knowledge and spurring new advancements in the industry.

Examples

• Route 128’s decline due to widespread non-compete clauses.
• Silicon Valley’s growth driven by information sharing.
• Success of alumni networks in maintaining business collaborations.

7: Regular Feedback Beats Annual Rankings

Annual performance reviews often lead to stress, competition, and diminished creativity. Many companies, like Microsoft, found that rigid rankings stifled collaboration and demotivated employees.

Instead, personal and timely feedback is a better approach. Micro-assessments based on frequent check-ins focus on individual growth rather than peer comparison, nurturing trust and transparent communication.

Microsoft now uses conversations to evaluate goals, skill-building, and collaborative efforts, proving that consistent feedback does far more for morale and performance than any annual ranking ever could.

Examples

• Microsoft halting annual rankings to improve innovation.
• Regular check-ins promoting better team collaboration.
• Higher trust levels associated with timely individual feedback.

8: Transparency About Salaries Builds Trust

When companies keep salaries secret, employees might wrongly assume they’re being paid unfairly. This can breed envy and reduce collaboration and team bonding.

Whole Foods uses an open salary model where performance data and pay are visible to anyone in the company. Employees know exactly where they stand, fostering a sense of fairness and camaraderie.

Transparency in salaries not only builds trust among colleagues but also encourages leaders to maintain a fair and justifiable pay scale company-wide.

Examples

• Whole Foods’ open-access policy for salary information.
• Reduced envy and better teamwork through transparency.
• Employees’ mistrust of vague compensation policies in other companies.

9: Knowledge Sharing Drives Innovation

Pooling knowledge across departments or even entire industries fuels creativity. When employees share their expertise with others, they develop more innovative solutions.

Encouraging open communication and idea-sharing promotes collaboration, leading to better problem-solving outcomes. For example, regions like Silicon Valley thrive on this concept, showcasing how collective innovation beats isolation every time.

Therefore, companies should foster environments of learning and cross-disciplinary teamwork to help employees expand their ideas and achieve breakthroughs.

Examples

• Innovation driven by idea-sharing in Silicon Valley.
• Cross-disciplinary collaboration producing stronger teams.
• Learning cultures boosting problem-solving capabilities.

Takeaways

1. Focus on employee engagement and happiness as top priorities.
2. Foster collaboration both internally through flexible teams and externally by sharing ideas with peers or competitors.
3. Adopt regular feedback systems and make salary information transparent to build a fair, motivating work culture.