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xiii). That overconfidence can lead to "false confidence" which in turn leads to serious mistakes and losses for companies. Hayward presents four sources of false confidence: a) getting "too full of ourselves" (an inflated view of "achievements and capabilities"); b) getting "in our own way" (pride leads a manager to "tackle single-handedly decisions that should be made" with others in the company; c) "Kidding ourselves about our situation" (due to false confidence leaders fail to "see, seek, share, and use full and balanced feedback" from colleagues and employees in order to "ground our knowledge about what's going on around us"; and d) failing to manage the "consequences of our decisions ahead of time" (Hayward, pp. xiii-xiv).
Hayward, who conducted more than 200 interviews with CEOs and other executives in Europe, Australia and the U.S., came up with his model / theory called "behavioral decision theory" (Hayward, p. xvii). Basically, Hayward posits that overconfident managers rely too much on "self-appraisals" rather than using the multistream approach -- that is, they fail to tap into the knowledge, experience, and human relations perspectives of employees.
Multistream Approaches -- Southwest Airlines
Southwest Airlines has enjoyed great financial success by following servant leadership and multistream leadership models. In fact, Southwest was the only profitable air carrier in the U.S. In 2008 and has turned a profit annually for 35 consecutive years. Why? Retiring Southwest President Colleen Barrett explains that when she uses the phrase "customer service" she is alluding to the fact that she normally spent around 85% of her time giving "pro-active customer service to our employees" (Knowledge @ Wharton / Penn State University). The Southwest approach is simple: in addition to innovative decisions on fuel costs, low-priced, high-volume passenger strategies and not charging customers for their luggage, the company's HR attitude is that happy, involved and motivated workers will pass along the good will to passengers. It has worked remarkably well.
Writing for the Knowledge @ Wharton site, Barrett asserts that when an employee has a problem or a passenger is giving an employee a problem, "…we adopt them, and we really work hard to try to make something optimistic come out of whatever the situation is…" (Barrett, 2008). In fact Barrett advanced through the ranks of Southwest (she began as founder Herb Kelleher's legal secretary) because Kelleher believed in "…a collaborative style that involved his associates…in every step of the process," including of course Barrett. What Barrett really enjoys is "being part of a team"; she considers herself an "overachiever" who did not score well on IQ tests but "…I plug away…I kind of a firefighter" (Barrett, p. 4). She describes her management style as "servant leadership" and the use of the "Golden Rule" -- posted everywhere at all Southwest venues -- is her brainchild. If you "…treat people the way you want to be treated" then "pretty much everything will fall into place," Barrett asserts (p. 1). The Southwest HR pyramid was also Barrett's idea; it focuses on "employee satisfaction and issues first and foremost followed by the needs of passengers" which creates profit and hence satisfies shareholders (p. 4).
According to an article in the Leadership & Organization Development Journal (Stone, et al., 2004), when Barrett states she embraces the servant leadership approach -- very closely linked to multistream concepts -- she is saying that she and Kelleher have brought about change in the airline industry through dynamic leadership. "When followers [employees] recognize that their leaders truly follow the ideals of servant leadership," Stone explains (p. 359), "then the followers are apparently more likely to become servants themselves, which decreases customer churn and increases long-term profitability and success."
Multistream Approaches -- Whole Foods / Google / W.L. Gore
Management guru Gary Hamel writes in Fortune Magazine that many of today's management "rituals" are "little changed from those that governed corporate life a generation or two ago" (Hamel, 2007, p. 1). In fact, though the hierarchies "…may have gotten flatter…they haven't disappeared"; employees are still expected to "line up obediently behind executive decisions," Hamel continues. However, the author sees signs of a thaw in those management approaches that seem to be frozen in time; he sees signs of "radical freedom" being embraced in the corporate world in Whole Foods, W.L. Gore, and Google.
Whole Foods' basic organizational structure is "not the store but the team" (Hamel, p. 3). That is, small groups -- roughly eight groups per store -- are empowered to flex muscles and actually oversee departments. Each new employee is assigned to a team, and that employee has four weeks to prove his or her value to the team. But a two-thirds majority vote is required before he or she is permanently assigned to that team. This follows the multistream approach to near perfection: "Whole foods believes that critical decisions, such as whom to hire, should be made by those who will most directly impacted by the consequences of those decisions," Hamel explains (p. 3).
Not only that, but teams set pricing, ordering, staffing and promotions -- and indeed teams decide (with approval of store management) what items to stock, based on what they believe customers really want and need. Whole Foods is a highly successful company financially; indeed, revenues have grown in each of the past ten years, according to Steven Halpern (www.bloggingstocks.com). Also, Whole Foods is the "largest and most profitable organic food marketer in the world" and has been ranked by Fortune Magazine as one of the best 100 companies to work for each of the past 13 consecutive years, Halpern (2010) explains. Despite higher prices (2% to 3% above typical grocery store prices) customers "are satisfied" and "employees are satisfied, too" (Halpern).
W.L. Gore has no layers of management and no organizational chart, Hamel writes (p. 3). There are few job titles and "no one has a boss" (Hamel, p. 3). Associates become "leaders" without formal titles "…when their peers judge them to be such," Hamel continues. This sounds like potential anarchy, but at Gore, when a person demonstrates the ability to get things done and done well, he or she then is a leader and hence they attract "followers" according to Hamel. "We vote with our feet," says Rich Buckingham, a Gore leader. "If you call a meeting, and people show up, you're a leader" (Hamel, p. 3). Gore, which produced fluoropolymer products for aerospace, medical, and other applications, doesn't describe its management style as servant or multistream in nature, instead referring to it as "the lattice system," developed to enhance the ingenuity, communication and cooperation between employees rather than "hierarchy of authority" (www.answers.com). The company is privately held so it doesn't release financial information, but had estimated sales of $1.2 billion in 2003.
Meanwhile, Google has a culture based on "I think I can" according to Hamel. Teams of three or four work on projects at the company and each team has a "cyber-tech leader" -- a responsibility that rotates among team members so all employees have an opportunity to show leadership and learn along the way.
What makes Google's 10,000 employees happy at work is the flexibility within the teams. "No one needs the HR department's permission to switch teams," Hamel continues. And moreover, the company wants its talent to "commit to things rather than be assigned to things," according to Google's VP for operations, Shona Brown. "If you see an opportunity, go for it," she says.
Shona Brown continues: "We believe that if an individual feels something is more important than anything we might ask them to do, they should be able to follow their passion" (Hamel, p. 4). Stupid ideas at Google are soon weeded out because every project at Google has its own internal website, and the transparency within that model allows input by all employees. If you want to become a big important player at Google, you won't do it by chumming around with executives or coming in early and leaving late. You will obtain status you must "develop a product that attracts millions of users," Hamel explains on page 4 of his article.
Ken Norton writes in CNN Money that when Google bought his startup company, and he began working at Google, food was the thing he talked about most often. "It's not so much the quality, but also the way in which the cafe is part of our culture," Norton writes. This may sound like a simplistic way to describe one's attraction to one's employer, but Norton compares the Google cafe with "the village sure in ancient Rome" where "everyone comes together." Some of the "coolest ideas have come from casual conversations in the cafes" and hence, having lunch (it is free at Google by the way) is just "part of the creative, innovative process" (Norton, 2009).
Moreover, Google allows for flexibility and Norton takes advantage of that flexibility by working from home on occasion. He rides his bike to work and sometimes…[continue]
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