The End of Office Politics as Usual

A Complete Strategy for Creating a More Productive and Profitable Organization

Author: Lawrence B. MacGregor Serven
Pub Date: 2007
Your Price: $24.95
ISBN: 0814406645
Format: Hardcover

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Chapter 2: The Organizational Cost of Office Politics

The Link Between People, Decisions, and Performance

“No one can put in his best performance unless he feels secure. ”

— W. EDWARDS DEMING

In chapter 1, we reviewed the high personal costs of office politics. While it might prompt you to take action, your organization will most likely remain unmoved by the personal toll that dealing with the enemy within takes on you. Like it or not, unless you are a key employee, management probably considers you expendable.

To motivate your company to fight the enemy within, then, management must see the cost to the organization as a whole. The question you must address is simple: If we as an organization ignore office politics in our workplace, so what? Answer the question thoughtfully if you want to get management's attention and even begin to reform office politics where you work.

In this chapter, we'll address that question. We'll also provide a business case for making the necessary changes to reform office politics where you work.

The estimated productivity loss because of stress-related factors is more than $100 billion in the United States alone.¹ While that statistic alone is alarming, most companies will not be moved until they truly understand the connection between politics and performance, which we will establish in this chapter.

Just How High Can the Cost Be?

The Space Shuttle Challenger

After the 1986 Challenger explosion, NASA launched an investigation to determine its cause. The resulting testimony of the scientists and engineers who worked on the space shuttle is, in a word, chilling.

The investigators first focused on the Challenger's technical dimensions and engineering specifications, what you would expect. But as they dug deeper to explain the failure of the ill-fated Challenger, they uncovered some all-too-human contributions that could have prevented the worst disaster in NASA's history.

The testimony showed some people who worked closely on the project had been worried about the craft's worthiness. Others just "felt" that it shouldn't be launched. The explosion of the Challenger space shuttle did not surprise those who worked most closely on it and had concerns.

What went wrong? Besides the technical failures, what clearly contributed to the disaster was the pressure people felt that any hold up of the shuttle's launch would be costly in many ways. They felt that the program needed to look successful, and a delay could ruin that image. While many people could have suggested stopping the launch, nobody wanted to face the personal ramifications for doing so. Such a call would not have been grounds for dismal, but it would have been "career limiting" nonetheless.

Do you feel the same kind of pressure to make your organization look good no matter what? For politically dominant workplaces, this kind of influence is, of course, all too familiar. Fortunately the associated costs are rarely as high as they were with the Challenger disaster, but these workplaces will suffer from a costly performance gap.

Living Up to Potential

Every company has a gap between its actual performance and its potential performance. The level at which its workers could perform is almost always higher. Having said that, for exceptionally well-run companies, this gap is small or almost inconsequential. They've essentially closed the gap and are operating at peak performance. That ability is what makes them so admired. For the remaining 90 percent of all organizations (yours included or you wouldn't have picked up this book), this gap is significant. Working to close the performance gap, as illustrated in figure 2-1, is the only thing that will bring wealth and success to the company and its shareholders (or stakeholders for not-for-profit organizations). Now that's something any organization should care about.

As seen in figure 2-1, office politics - or the enemy within that creates a drag on organizational effectiveness - cause a portion (sometimes a large portion) of the performance gap. We'll spend the majority of this chapter explaining why and how. But suffice it to say here that office politics can undermine trust, stifle innovation, drive turnover, distort communications, corrode joy and pride in work, and most of all lead to bad decision making.

Carlene Ellis, Intel's vice president for organization, has wryly observed that the key to a company's success in closing the performance gap is to recognize the stupid things the company does and then find a way to stop doing them.² Office politics generate a whole host of wasteful behaviors, thus making them high-leverage candidates for fixing. Some friends from Deloitte Consulting put a different spin on it: "Political companies are anti-growth; they develop slow growth DNA."³ But from whatever angle you look at it, a company's performance gap will balloon with the negative effects of office politics.

In figure 2-1 the political workplace factor explains perhaps one-third of the performance gap. In your company, it might be higher or lower, but in any case, it's most certainly the first issue that companies must address.

Decision Making in a Political Workplace

Do office politics improve the decision-making process or retard it? We believe that the enemy within is a crippling force that inhibits an organization from being consistently profitable over time precisely because its office politics undermine the decision-making process.

Every business is based on a chain of activities. Customer needs are identified, products or services are developed and delivered to meet those needs, bills are sent out and collected, and so on. Likewise, employees make dozens of business decisions in this chain every day.

In the best-managed and most successful companies that we have studied, employees' decisions are based on factual analysis and evidence (rigorously developed and lively debated) with the clear goal of maximizing shareholder wealth and the benefits to the organization as a whole. Their companies recognize that, apart from numerous disparate opinions, they need to base their decisions on facts and objective standards and debate them on the same grounds. There are specific questions that need to be answered.

Maximizing Shareholder Wealth Criteria:

Is it good for the customer?

Is it good for the organization?

Is it good for our shareholders/stakeholders?

Is it good for our employees?

While some managers might value their employees' gut feelings and intuition, these feelings still need to be supported by data and a compelling business case. In a well-run organization, facts and principles are worth more than titles and personalities. What gets people ahead here are well-reasoned, firmly grounded, and thoughtfully analyzed decisions. As a result, the right decisions are made in the best interests of the company or organization.

In a political workplace, the approach is different. Instead of maximizing wealth for the company, management promotes personal growth and prestige. People struggle to ensure the survival of their personal empires regardless of the cost to stakeholders. It boils down to answering questions like these:

Maximizing Political Capital Criteria:

Will it make powerful people look good?

Will it make powerful people look bad?

Will it make someone I don't like look good?

Will it make someone I don't like look bad?

Will it enhance my own power?

Now imagine that you're going to invest your own hard-earned money in one of two companies. Where would you want to invest it - with the company that makes its decisions based on maximizing shareholder wealth criteria or the one that makes its decisions based on maximizing political capital criteria? You should never put your money into a company that uses investments to subsidize activities, practices, and business strategies that build personal empires instead of shareholder value (unless, of course, you're looking to lose money).

Communications Breakdown

Knowledge is power. We've all heard that adage before, but nowhere is it more true than in a political workplace, where people build personal empires. There, no one openly shares knowledge for that would mean giving away their power. Who would be naø5øve enough to do that?

The high cost to an organization from restricted information flow is akin to siphoning off oxygen from the brain. It grossly impairs a company's ability to respond effectively to competitive market conditions. Yet information blocks are not the only issues that political organizations have with open communication.

To avoid conflicts that might come back to haunt them, executives in political organizations learn to abstain from straight talk in meetings. They don't say what they really mean or test other's assumptions. They follow the mistaken notion that to get along you've got to go along. The problem with this behavior is that people then never clearly resolve important issues. These defensive routines prevent people from making honest decisions; consequently, meetings end with broad smiles but without defined action.

Another communication problem found in many political organizations pertains to hiding mistakes. The enemy within is constantly searching out the weak and vulnerable, both to weed out competition and to improve one's comparative performance.

They can say, "Hey, at least I didn't screw up like that other guy did." Of course, everyone is at his or her most vulnerable after making a mistake, but they are more so in a political workplace when others exploit those mistakes. Thus people learn to cover up their mistakes.

Hiding snafus takes time and other resources that could be spent more productively. Hidden problems also tend to fester and get compounded simply because they are not addressed. That's obvious. What isn't so obvious is that mistakes often provide invaluable lessons if people openly acknowledge and analyze them. As they say, Experience is the best teacher. But most important, openly acknowledged mistakes are rarely repeated, while hidden mistakes tend to recur with unwelcome frequency.

How People Spend Their Time

An easy way to measure the organizational cost of office politics is simply to look at how people spend their time. In the better-run companies we studied, workers spent their time solving problems, searching for opportunities, learning about their customers and their needs, and looking for ways to work smarter, faster, and better. Managers take an active role in gathering and disseminating information, developing strategies and plans, and measuring results. You'll see people acting in the organization's best interests, with which their own personal interests are purposefully aligned. Not surprising these companies so often win and reward their shareholders with an upward-trending stock price.

Look inside a political workplace, and you'll see people spending their time on something other than upholding the company's best interests. Each person on the organization chart is busy transforming his or her position into a private fiefdom, with each manager thinking only of his own piece of turf and almost nobody thinking of what's best for the company as a whole.

You'll see managers fighting off any proposed change that threatens in any way to erode their personal status, their resources, or their influence over rival executives. In this environment, you'll see subordinates coping with their bosses by "handling" them - catering to their whims and offering little debate or their own innovative ideas. They suspect that their boss's decisions are based more on personal considerations than on thoughtful analysis, and they're usually right.

In general, you'll see people acting in their own self-interests, which have almost nothing in common with the overall company's interests. It should be no surprise that these companies so often lose and disappoint their stockholders with eroding stock prices.

A Return to the Individual View

Now that we've examined the organizational impact of office politics, or the enemy within, let's briefly return to the individual worker. You can't fully understand the vicious cycle in which the workers find themselves without understanding what's happening to the individuals who work there. Here is what we have found.

The more political work becomes, the less responsible workers become. Instead, they grow psychologically disconnected from their work and learn to work just for their paycheck. They rarely put in any extra effort and stop taking risks and thinking creatively. Thus, they lose any personal ownership of their work or the results of that work.

When they feel as if they're juggling between conflicting priorities - those of the company, their bosses, and themselves - they approach work by just doing what they're told and hoping for a promotion. They try to stay out of the boss's way and out of trouble.⁴

When managers lose their sense of commitment, they begin to rationalize that they are working in a company large enough to hide and absorb numerous mistakes. They don't have to correct them. Their job simply becomes a means to something that lies outside of the company. Although the company wants people to commit, they see little to which they can commit themselves.

In a political environment, people learn to worry about their jobs, not the business. Over time, they become numbed, less aware, and not alert. Their problem-solving potential erodes.

In this vicious cycle, eventually people who don't feel responsible simply show up in the morning, halfheartedly do what they're told, and go home.

Just take any three points listed above and ask yourself, How can people in this environment make good, effective decisions? The answer is they can't on any consistent basis, and that's what brings us full circle. Ultimately, an organization is only as good as the decisions its people make. Anything, including office politics, that diminishes or obstructs their ability to make effective decisions must be remedied for a company to succeed.

Notes

1. James Quick, "Preventing Stress Intervention: A Challenging Area for Researchers," in Work Stress: Health Care Systems in the Workplace, James Quick, Rabi Bhagat, James Dalton, and Jonathan Quick, eds. (New York: Praeger Publishers, 1987), 151.

2 Sally Helgesen, The Web of Inclusion (New York: Doubleday, 1995), 64.

3 Thomas L. Doorley and John M. Donovan, Value-Creating Growth (San Francisco: Jossey-Bass, 1999), 77.

4 John Case, Open-Book Management (New York: HarperBusiness, 1996), 51.

Frank's Story

Case Study:

A plant manager gets angry when a young executive from headquarters uncovers productivity problems.

Political Response:

The manager works to get him fired.

Frank M. had been a plant manager for a leading soft drink beverage company for fifteen years when we met him. He had almost complete autonomy and control of his plant, aside from a couple of annual visits from the corporate chieftains. The plant was his domain, and things were done his way. Frank had the last word on everything, from the color of the paint used on the handrails around the plant, to the number of overtime hours worked on any given Saturday, to the monthly menu changes in the cafeteria. The plant is officially known as the Little Beaverton plant because of its Kentucky location, but the employees call it "Frank's World." Here's his story.

"Two years ago my company hired a consulting firm to help figure out ways to reduce turnover in the executive ranks," Frank said. "One of the recommendations they made for job enrichment was to rotate executives through a variety of functions. I guess the thinking was people needed to move around the company more, even spending time in other functional areas. So an engineer, for example, might do a stint in plant operations or even marketing. The idea was to give people a broader view of the company, do some cross training, and make a career at the cola company more interesting. The program was called START - sharing talent and resources together."

Frank had heard about this program, but he did not think it would involve his plant, at least not immediately. He was wrong. He explained, "I got a call from the director of U.S. operations, who was my boss, telling me that an engineering executive from headquarters would be spending a year or two at the Little Beaverton Plant as part of the START program. I was more than a little unhappy about the thought of having a headquarters spy at my plant.

"I told Bill that I thought this START program sounded great," Frank recounted, "but I didn't think Little Beaverton was the right plant to do it in. We only produce a couple of the brands, and all of them are still batch processed the old-fashioned way. I suggested they do this thing with the Puerto Rico plant instead, since they have the new processing technology and they do twice as many flavors as we do."

But Frank's boss made it clear that he had made up his mind. So Frank resigned himself, grudgingly, to the idea of "babysitting" a headquarters executive for awhile.

"Two weeks before the new executive was expected to arrive at the Little Beaverton plant," Frank continued, "I announced it at my weekly staff meeting. There was a lot of groaning around the table, which was just what I had expected."

Plant employees were generally suspicious of people from headquarters, and they often referred to them as spies. The pervasive belief was that people from headquarters could offer little help and frequently just got underfoot.

"I was glad to see that they were upset about it, or I would have been a little worried otherwise," Frank admitted. "I remember telling them that we should give this guy an office in the back of the plant, away from the rest of us, let him tinker around a bit, and go back to headquarters in a year just as if he was never really here."

Everyone agreed on Frank's approach to the problem, but he had to establish one more point. "I told them one other thing, and I put it in plain English. I told them that I would tear them a new one if any of them gave this guy anything other than the time of day. The last thing we needed around there was some idiot from headquarters trying to change things. Everyone got it."

Tony D. had spent five years at headquarters working in the company's engineering department. He had shown real promise, as Frank later found out, and was selected to join the first group of people to participate in the START program. Although he was flattered at being chosen, he apparently had some reservations about spending a year in Little Beaverton. He told Frank after he had been there awhile that he had not been that keen on leaving New York, which he loved. He knew what the opportunity could mean for his career, though, and he decided to make the best of it.

"Tony spent much of his first week just settling in, finding a place to live, learning his way around the plant," Frank recalled. "Everyone he met was polite enough, but I'm sure they all seemed to be in a hurry to go somewhere else." Frank smiled. "Only Edgar, his direct boss at the plant, spent much time with him. I'm sure that even then a lot of topics appeared to be off-limits."

Tony eventually did settle in, and he even joined a local softball league. His role at the plant was to run the capital appropriations process, formalizing requests for new equipment for headquarters' approval. He was also expected to lend his expertise to ensure the product lines ran smoothly and efficiently. That's where the trouble started.

To do a good job, Tony needed to understand how the products were manufactured, which turned out to be a challenge. "Nobody wanted to talk to him about it, or when they did they would talk in such broad, sweeping terms that they might as well have said nothing at all," Frank explained. "It was all part of the program to keep him isolated, and it was working."

Tony was tenacious, however, spending time on the factory floor and speaking with the hourly workers who operated the machinery. He learned more from them than he had speaking to the director of manufacturing. Eventually Tony discovered something that Frank had been hiding from headquarters for years.

"Tony went looking for problems and he found some, okay?" Frank seemed irritated recalling this part of the story. "He learned that productivity in the Little Beaverton plant was lower than in any of the other plants in the company on a comparative basis, and as a consequence, our production costs were higher. What had masked this fact was that the raw materials' costs were lower than in the other plants, so the total cost to produce our products was similar to any other plant in the system.

"My brother-in-law was head of purchasing for the company, and he always sent the lowest-priced ingredients to my plant. We also had a very clever accounting manager who could make our financial reports look good even when they weren't. As a result of all this, the Little Beaverton plant was able to cover up some, well, shall we say pressing productivity issues.

"Tony told me about all this and said that he had no intention of trying to embarrass me or the plant, but just wanted to do what was right for the company. Where do they get these guys?" Frank smirked.

Presumably what was right for the company in this case was to address the productivity issue head on. The cola company was large, and Tony pointed out other plants in the system probably faced similar problems and had found ways to overcome them. He suggested using the company's collective intelligence and experience to help bring the Little Beaverton plant's productivity up to standard. But that's not the way Frank saw it.

"Look, the meeting he held with me to talk about this stuff did not go well, not at all," Frank said. "I didn't deny any of what Tony said to me, but I clearly didn't want to talk about it. I spent most of the meeting just glaring at him, grinding my teeth. He just didn't get it and kept going on and on about how we could talk to other plants to figure out what they had done to improve their productivity. How would that make me look?

"I told him, `Look, I know you want to make a big name for yourself back at headquarters, but I'm not the guy to trash to do it,"' Frank recounted, stabbing his finger at us, the same way I imagine he must have done to Tony. "Then he says to me, `That's not what I'm trying to do here, Frank. Honestly, I just want to help. I just want to do the right thing.' Come on, who's this guy think he's fooling anyway?

"I told him, `If you know what's good for you, you'll get the hell out of my office and forget all this crap. You haven't told me anything we didn't already know anyway. We've got plans to fix all that stuff. I don't have to answer to you as to how we're going to do it. We're through discussing this."' Frank told us that at that point, he turned his back to Tony and stared out the office window.

Frank had always been uncomfortable with the plant's involvement with this START program, and now his every concern was proven valid. In Frank's mind, Tony was a corporate spy sent to find out everything the plant was doing wrong and report back on it. The more Frank thought about it, the more incensed he became.

"Just who the hell did this kid think he was, anyway?" Frank demanded. "Nobody in this plant would have even dared to speak to me the way that he did. They know they'd never live to tell about it. I wanted to show him that he couldn't challenge me like that."

The very next day Frank called up his boss and told him that Tony simply had to leave the plant. "I gave him the kiss of death. I said, `Bill, look, I'm telling you he's just not a leader; he doesn't inspire any confidence. He's been a bull in a china shop since he got here, and he's really upset a lot of people."'

Frank knew his words would seal the young executive's fate at this particular company. The company wanted "leaders who inspire confidence" in the executive ranks, and it was generally felt that leadership was innate - "either he's got it or he doesn't." Part of the company's promotion process was to weed out people who lacked this "natural" leadership quality. Frank knew he could be ruining Tony's career, but he was enraged enough not to care.

A few weeks later, a human resources executive visited the plant and fired Tony. He explained to Tony that he "had not succeeded in winning the confidence of the plant" and that he had no further assignment with the company.

"Look, I didn't like getting this guy fired, but there really wasn't any choice in the matter," Frank rationalized. "I had to protect my interests." Undoubtedly it will be a long time before Frank has to suffer another intrusion from the START program.

Let's take a closer look at the forces behind Frank's behavior.

TYPE OF POLITICAL BEHAVIOR: Working to fire an underling who is perceived as a threat.

IMPAIRMENT TO THE COMPANY: The loss of an executive's vital and effective analysis of a plant's productivity.

PERSONAL MOTIVATION: Anger, fear.

CONTRIBUTING WEAK INSTITUTIONAL DYNAMICS: Deficiency of meaningful goals regarding performance, lack of accountability, absence of pay for performance, insularity.

EFFECT ON THE COMPANY'S PROFITS: Low productivity, high costs of manufacturing, loss of a well-trained and motivated executive.

Debriefing

What went wrong here? To begin with, the plant manager was not rewarded based on his plant's productivity. Thus, he had no incentive to improve it. When a corporate executive uncovered the issue and offered his support to help improve productivity, the plant manager viewed his offer as nothing more than a challenge to his authority and position.

How do you think Frank would have reacted if he had had a 30 percent bonus riding on improving productivity? Chances are that he would have welcomed whatever insight and assistance the corporate executive could have offered.

Because Frank had no personal incentive to improve productivity, or indeed any other clear and measurable performance metric, he spent his energies building and securing his empire. He spent more time thinking about the power he had inside the plant than he did about doing his job and improving the plant's performance.

Another important point here is the performance evaluation process for Tony. His performance evaluation, like that of the plant manager, had nothing to do with meeting objective measurements. It all came down to the plant manager's call and his perceptions of Tony's "leadership capabilities" (however he personally defined them). Although Tony had invested a great deal of time determining the "right thing to do for the company," which its stockholders would appreciate, he personally would have been better off by not making any attempts to improve the plant's performance.

In both cases, weak institutional dynamics undermined real success. Specifically, the performance measures in this scenario were vague, not measurable, and not tied to making improvements. As we've seen, office politics thrive in this sort of environment.

Have you ever seen personal anger and animosity derail a career in your company?

© 2002 Lawrence B. MacGregor Serven
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