Reimagining the Workplace for Engagement

CAHILL

Hi everybody, my name is Joe Cahill. I am the COO of the Project Management Institute, PMI. Thank you to our new and returning listeners to the Center Stage Podcast Series. As always, today’s podcast is exclusively and proudly sponsored by the PMI Knowledge Initiative. The Knowledge Initiative is a community of professionals and thought leaders that are focused on the art of getting things done. This global community is sharing knowledge, developing new thinking and harnessing the collective intelligence of the entire PMI global community as it relates to the future of work. So, on to the program.

Today it is my pleasure to be here with Nancy Dixon, PhD. Nancy is a speaker, author, executive advisor, faculty at Columbia University’s Information and Knowledge Strategy Program, and a thought leader in the field of knowledge management. Nancy serves as an executive consultant to the most celebrated knowledge management-driven organizations with a rich experience in corporate at Conoco Ecopetrol, in government at NASA and U.S. Army, and in international development at USAID and the WHO.

Dr. Dixon has been studying virtual work and conversation practices for the past few decades and is an acknowledged expert on the subject. So, welcome, Nancy.

DIXON

Well, thank you, I’m glad to be here.

CAHILL

We’re so happy to have you. I hope you’re having a good day so far.

DIXON

Yes, a very nice day in Austin, Texas, and the sun is shining, as it usually is.

CAHILL

The Lone Star State. Let me start off just first by saying we did get a chance to talk so I gathered that you were keenly interested and actively engaged in your career in reimagining work prior to the Covid-19 pandemic. So in this new context, what has this new global experience of shifting much of work into the home environment, how has this experience taught us and how has it accelerated an organization’s ability to address long-standing issues like work/life balance, workplace stress, and employment engagement?

DIXON

Yes, that’s... For all the negative things that have happened, and we certainly have to acknowledge all the negative things that have happened from the virus, one of the interesting things that is positive is that I think managers have discovered that in fact people can work remotely and they are still productive, which I think has been a great fear for managers, that they really have been concerned that, if I can’t see them are they really doing anything, in a way. So this has proven that point to them.

So I think it’s made the possibility to solve some problems that we have been trying to solve in organizations for some time and haven’t been able to, and one of those is external and that’s the pollution that all this commuting back and forth to the center city causes. And the other two are the work/life balance issue that people need. But one more, which might surprise you, is the fact that many workers find the workplace toxic.

So the workplace can produce things like depression, anxiety, heart attacks. One of the interesting things that the Mayo Clinic says is that the person you report to at work is more important for your health than your family doctor.

CAHILL

That kind of rings true though, right? You spend so much time together.

DIXON

Exactly. And there is a phenomenon that actually has a name called the Black Monday Syndrome. And that is that more people have heart attacks on Monday morning than any other time during the week.

CAHILL

I was just thinking about the Monday blues but that is a terrible statistic.

DIXON

Yes, yes. It turns out that if people can work remotely those problems can be addressed in many ways. So I am very positive about this idea of more people working remotely.

CAHILL

I’ve learned as well, you know, they say it takes 21 days to change a habit and I’ve had a 30-year habit of going to a building to work and this experience has definitely changed that habit.

DIXON

Yes, yeah.

CAHILL

So in this vein, what are the real possibilities of a revolutionary shift to remote work? What if the 70 or 80 percent of the people who actually want to work remotely one to five days a week could actually do it, what are some of the real individual and societal outcomes we could expect?

DIXON

Well if I go back to the first one I mentioned, which is the pollution, the data we have is from 2017, from the U.S. Bureau of Labor Statistics, and at that point they said that 3.9 million people were doing what is called telecommuting, which is another way to say remote work. And that work, that 3.9 million telecommuters, saved three million tons of greenhouse gases, which is the equivalent of taking 617,000 cars off the road.

CAHILL

Ooh.

DIXON

And we could see that, couldn’t we, from the satellite views we have had before and after we all became remote.

CAHILL

No, that’s for sure. There are factories that cause much of that but there is a big, big component of cars and trucks on the road.

DIXON

Yes, yeah. If we had what the census bureau thinks is possible, which is 62 million telecommuters, as opposed to 3.9, if we had 62 million, that we could actually have the equivalent of taking 10 million cars off the road or saving 54 tons of greenhouse gases. So I think organizations have been wanting to help in this issue. They have been wanting to do their part at reducing pollution. But if we could stop the commuting or at least a good deal of the commuting, that would just be a remarkable thing to have happen.

CAHILL

That would be a great outcome.

DIXON

Yes. It also would save the commute, which turns out to be a huge stress inducer for many, many people. And all of us that have sat in traffic, we realize the amount of stress it causes. But it is the number one cause of stress is in fact the commute that people have.

CAHILL

Oh my god.

DIXON

So getting rid of that would be better and it would give workers back 11 days a year of their life because they are not spending it in their car.

CAHILL

That is remarkable, 11 days.

DIXON

Yes it is. It’s astounding. That’s days to be with their family, that’s days to exercise, all those kinds of things that you can’t do otherwise.

CAHILL

How about some of the traditional goals of an employer, like keeping people on, not having turnover, people calling out sick, things of that nature?

DIXON

Yes, those things also amazingly are improved. Companies that have remote workers have 25 percent lower employee turnover and so that is a big statistic. And that is a huge cost of course because of the retraining, the cost of hiring, all of that is just an enormous cost.

I don’t have specific data but also companies report fewer people take sick days. And that makes sense to me because sometimes when we’re sick and we don’t want to go in because we think, okay, I’ve probably got something that’s contagious so I better stay home, I’m still capable of working, I’m still capable of doing stuff, right? But I just don’t want to expose other people. So that is a big piece of it. And of course a lot of sick days, it turns out to be that it’s not you that’s sick but it’s a kid that’s sick.

CAHILL

Of course.

DIXON

And again, you can work with a kid sick, given a few times to run in and cheer them up or whatever, you can still work. So that is a huge difference.

The flexibility, which I talked about earlier… The idea of being at work for eight hours and only doing for eight hours your work some place in an office was really started in the 1940s. And it started at a time when moms stayed home and dads went to work. Of course that has changed.

So now people really do need to have the flexibility that if there is a dental appointment, they can go to it, they can make the kid’s baseball game, they can get a run in before the rain comes, they can walk the dog, schedule the dental appointment, all those kinds of things, there is that flexibility. Because if you need to do those in the day, and many times you do, you can always then put in those hours at night or put those hours in really early in the morning. You don’t have to put it in during that eight-to-five period of time.

CAHILL

You work when you’re most productive in many ways, right?

DIXON

Yes. But you also have more flexibility in your life. I think that is one of the biggest reasons that people want to work remotely when we ask them. The two reasons they want to work remotely are, they want to work remotely because they don’t want the commute, and they work remotely because they want flexibility in their lives. So that is an important issue.

In fact, when I was doing some interviews, I was interviewing a group that’s remote that works for a tech firm, FMC, and one of the questions I always ask was, what’s the greatest benefit? And one of the guys in Norway that I was talking with... I was surprised by his answer, when I asked him what’s the greatest benefit? He said, I can walk my dog. And I’m not a pet owner so that didn’t even occur to me. But for people that have animals and animals are a big part of their life and family, that’s an issue.

CAHILL

That’s a big deal. I’ve learned that in the last couple months actually that they are actually much happier, my dogs, walking them twice a day. It’s a marked difference.

DIXON

Yeah, absolutely. So that’s an interesting outcome. And then this may seem a strange one, but I actually think it could allow the small cities to thrive again because there are already some states and some companies... Like there are people that... the companies that are in San Francisco, that they just cannot hire people because people can’t afford to live there. So if they can hire someone but the person actually lives in Oklahoma, I’m sure that would be much cheaper, they’ve got a new employee.

So there are companies, there are states that are offering $10,000 bonuses if you’ll move to our small city. It could bring back those small cities. And people leave the small cities because they want a job but they have a preference for staying where parents are, where kids they grew up with are, that kind of thing. And we don’t have any evidence of that so I’m hypothesizing here, but it’s a possibility.

CAHILL

Sure, no, that’s okay, it’s a good hypotheses, indeed.

DIXON

Yeah. And then one that I do think is important, and this goes back to what I said at the beginning, that managers are really concerned about productivity. There have been two studies that have looked at productivity. And I have to make a caveat about that because both of them have looked at workers who work fairly independently, they have not looked at team productivity, so I have to say that ahead of time.

But one of the studies was with the U.S. Patent Office and they did a study over a period of two years and those people, of course, everybody is working on a patent, so they’re working selectively, they had what they called a “work from anywhere” program. So that not only allowed people to work remotely but they could move to Florida or move back where their parents were or whatever. They found the remote workers were 4.4 more productive than were the people who were coming into the office.

CAHILL

Four times?

DIXON

No, 4.4 percent more productive. So that’s not a huge thing but it certainly says they weren’t less productive, right?

CAHILL

Yeah, for sure.

DIXON

Yeah, they were more. And they saved $38.2 million in office expenses.

CAHILL

Now that’s a big... so if you extrapolate that across the numbers you were saying earlier, about the 62 million people working from home that is a big, big number.

DIXON

It is, yeah. Now you only get that kind of number if your office isn’t sitting empty, right?

CAHILL

Correct.

DIXON

So if you’re going to build a new office because you need more people coming in then you can start saving money but of course if it’s just an empty desk sitting there that’s…

CAHILL

Oh yeah, of course, that’s a problem. I think we’re all experiencing that problem right now.

DIXON

Isn’t that the truth, yeah. In fact, many of the companies, like the big consulting companies, like McKinsey that I do some work with, every time I go to their offices I am absolutely astounded at how empty the offices are, not in the virus time but before that.

CAHILL

Right. That’s a good sign for them, when there’s nobody in the office

DIXON

It is, isn’t it, yeah.

CAHILL

Yeah, they’re out working with clients.

DIXON

But it means that... yeah. So a lot of companies have gone to a 60 percent rate, only assuming 60 percent of the people will be there at any one time. But the other company that I didn’t talk about was this Chinese company called Sea Trip. They are a travel agent. So again the agents work independently, they are not in teams, although there are teams of ten people, they’re just each doing their individual work.

So they had quite a problem. They were in Shanghai and they had the same problem San Francisco has, that the people they wanted to work for them couldn’t afford the housing. So they did a two-year study. And the other problem they had I should say is that they had about a 50 percent quit rate. So both of those issues, they couldn’t get people to work in the city and they had people constantly quitting.

So they did this control study over a period of two years and it was out of Stanford University that did the study. So every team had ten people, the same manager, and they divided those teams in half. Half the people were told now to work remotely and the other half were told to work at the office. So they had a really good control group to say did this work and they had... those ten people all had the same manager so we didn’t have to take into account manager problems.

So half worked at home. So they were able to decrease their quit rate by 50 percent. So that was huge for them to do that. And they wound up having fewer sick days and they increased the productivity of the workers. So that was pretty amazing.

CAHILL

That is amazing.

DIXON

Even better than that, when the experiment was over, they said okay, this works, so anybody that wants to work at home you can do it now. And when they did that, the people that then worked at home because they not only worked at home but they wanted to work at home, their productivity even shot up higher.

CAHILL

Higher, mhm.

DIXON

So it’s the combination, isn’t it. Because not everybody wants to work at home.

CAHILL

That’s the truth.

DIXON

There are some people that really, they really want the ongoing interaction with their coworkers. So that combination that you can, and if you can and you want to then we have it. So I am really waiting for somebody now to do the same kind of a study with teams and then we could know also do teams increase productivity.

CAHILL

That would be very interesting. Considering the business we’re in, we’re in the project business with project teams, that would be very relevant.

DIXON

Yeah. It would be. So sign me up for the study when you get ready to do it.

CAHILL

[laughs] Excellent.

DIXON

Because I really would like... Because we need that data. We need to show what happens when it is a team. So anyway, those are all the kind of benefits that could help. Those are all things that could help. I should also say there are some downsides. One downside is that its only knowledge workers for the most part I’m talking about. I’m not talking about the retail clerks, I’m not talking about... I mean there’s lots of folks that this does not apply to.

CAHILL

Of course, yes.

DIXON

The people that work with their brains predominantly, that’s the people that this is... and those are the people that can work at home. The other thing we know, if people started working more at home, the inner city lunchtime bars, that kind of thing, are going to lose an enormous amount of business because a lot of their business happens at lunch and right after work and all that.

CAHILL

Driven by the workplace, yeah, for sure.

DIXON

That would be a huge change, I think. And then the other thing is that we cannot go fully remote. Even those people that work for companies... and there are a number of them, there are probably over 100 companies now where everybody is remote all the time and they don’t even have an office. So studying those groups is how we learned about okay now how are you going to make this work? Because they make it work all the time.

But even those groups come together periodically. Either the team comes together, you know, five people on the team come together some place, or the whole group comes together at the end of the year, but we can’t just say everybody is remote and stays remote because we lose that joint sense of purpose, we lose the trust in each other, and we lose the social human contact, which all of us really want.

CAHILL

Yes, that’s usually the catalyst for things to get done, right?

DIXON

It is.

CAHILL

To make all that trust, to make the trust actually sink in.

DIXON

And as far as I know, I have not seen that we are capable of doing that remotely. I think we are capable of sustaining it once we’ve built it, but I don’t think we can create the level of trust that we need remotely without some of that in-person interaction going on.

CAHILL

So in that vein, what do you think organizations have to learn in order to make this shift, assuming that the shift is certainly upon us and it’s going to be much more remote than it was say two, three months ago in the future, what do organizations themselves need to learn?

DIXON

Well, one of the big things I think is that managers need to figure out how their role would change. And again, the companies that do this remote all the time have learned a lot about that. Managers need to have a one-on-one with every member of their team once a week that’s working remotely, teams often have picked up the agile idea of having a 15-minute stand up meeting that helps everybody come together.

But how you manage is... I think that’s changing a lot because the manager needs to be more of a support. And you can imagine in these one-on-ones the questions are not what have you done for me today but the questions are more about what are you thinking about your long-term goals, what do you need, what can I do for you that will help you, who do you  need to get connected to? It’s those kinds of questions that those one-on-ones -

CAHILL

It’s more like a coach.

DIXON

It is. It’s like a coach. And we have been saying for a long time managers need to be more like a coach, right? So that’s one. Team managers need to change. I think there are a lot of other smaller issues that need to go on. Like, how would you onboard a new team member if they’re remote? What are the kinds of exchanges that you have with them and how do you get them connected to the other team members and all of that?

And again, the teams that do this all the time have really good ideas about doing that, assigning a buddy... And often, it’s interesting, they often assign a buddy that is not on your team so that you can learn the truth about the culture outside of your team. But anyway, lots of techniques around how to do that.

There is also the question of how do you help the team members themselves stay in relationship with each other. And again, many of the remote teams that I worked with that are fully remote and have been always, they do paired calls where for an hour a week, they call one other member on the team so that they are staying connected with all of these different members. So there’s lots of little techniques like that about how do you keep the team members in a relationship.

There’s also the issue of how do you help team members be accountable to each other. And that goes back to the agile kinds of processes that we know about that help that accountability. Using Trello, for instance, that app, is wonderfully helpful for people to see what everybody else is working on and how long they think it’s going to take and now they’ve got it finished and so forth. So those are things.

How do we redesign the work tasks so that they can be done remotely? They’ve been designed for everybody being together, right? So what does the redesign look like I think is a critical question.

And then, even trying to understand what are the characteristics of tasks that can be done remotely and which require being together, is important. So even thinking about what jobs shall we make remote. And not to get too jargon-y on you but that has to do with how interdependent the tasks themselves are. So to what extent do I need to check with you before I make some kind of a change because what I do is going to impact you. And there are some teams that are not like that, there are some teams like the patent team I talked about, or the travel agents, where their work is pooled but they don’t need to be asking each other about it.

CAHILL

Connected.

DIXON

Yes.

CAHILL

So tell me a little bit in the context of conducting meetings, for an example.

DIXON

Oh yes.

CAHILL

You talked to me about flipped meetings the other day. That’s a great example of a new way of approaching a meeting, particularly in a virtual world.

DIXON

Yes. Flipped meetings are one of my favorite things. So that idea came out of education, it actually came out of higher education where instructors are, not all of them but many, are saying okay, I’m not going to come into the class and lecture like I usually do, you need to look at this video ahead of time, you need to read this book, you need to read these articles, and then in class what we are going to do is discuss those topics. And so it’s a very different way to think about that.

So now some organizations are doing flipped meetings and virtual is great for a flipped meeting. So I have actually talked with managers who, before the regular staff meeting, they send out a short video of themselves, maybe it’s 15 minutes or five minutes, or they send out a document, and then they say to them, okay, and here are three questions about that topic that we are going to talk about online. So read this stuff and when you come online what we’re going to have is a discussion.

That helps two things. One, it keeps us from dying from PowerPoint, which is a great help, but it also means that when people come together, what they’re coming together for is to hear, listen to and think together with each other online. So the meeting is more about their building a sense of understanding about these things than it is about hearing the instructions. So it’s a wonderful process. So I say to groups, in a staff meeting online do not use PowerPoint, do not make long speeches, do a flipped meeting.

CAHILL

I like it because we experience death by PowerPoint whether we’re in an office or not and that is a great opportunity to, as you say, flip into a new paradigm. So I really like the idea and we will be using it.

DIXON

Yeah. And there are other issues too. The idea that because our attention span is so much worse, and this is a... I know this is amazing but the statistics say that 80 percent of people that are on a webinar or a virtual meeting are in fact doing something else. Can you believe that?

CAHILL

I can believe that. I really can.

DIXON

Yes.

CAHILL

It’s to the point that you’re making about this example of a flipped meeting, when you’re really droning on and there’s only one person talking and there’s five people in the meeting, it really becomes a challenge.

DIXON

Yeah, it does. So there are a lot of simple techniques that people can use and most of them, people who facilitate would know about. But talking about a topic and then do a go-around, asking okay, now where do you stand on this after the discussion, using the polling function on the virtual meetings.

CAHILL

Right, even the chat function is quite useful. I never thought they were, but they are.

DIXON

They are, yeah. So the golden rule is change what you’re doing on a virtual meeting every five to seven minutes because otherwise you’re not going to hold the attention of people at all. And of course, using the breakout rooms if you’re a big group, because we know that you really can’t have a discussion online with more than four or five people. So if you really need to discuss something, putting people in small groups is... and the breakouts are the lifesaver I think of virtual work.

CAHILL

That is a smart way to break things down, right? To really get to what we used to call a working meeting, right?

DIXON

Yes, that’s the difference isn’t it? I have said, I have sort of made this my motto, that you separate to concentrate and to collaborate, you come together, and whether it’s together virtually or together... But all of us, if you think about that, all of us have been in a place where we’re at work and we say I have got to get this report done. And what we say is okay, I’m going to stay home tomorrow and work on the report, right, because we need that concentration time. So if we think about it that way, coming together either virtually in a meeting or coming together in person is the time for collaboration, is for building relationships, and we also need that concentrated time of let me get my work done, let me do this.

CAHILL

That’s the only way to move the needle, as they say.

DIXON

I think it is, yes. Many times for us that’s the only... The only way to get it done is to get out of the office. In fact, a large percentage of people say that’s why they work remotely is because there’s so much disturbance in the office.

CAHILL

Yeah, the enemy to good writing is being disturbed.

DIXON

Yes, absolutely, yeah.

CAHILL

So I want to shift a little bit. You have described to me the concept of collective sensemaking as a deliberate effort of a team or an organization to make sense of a particular complex situation that requires more than just informal conversations. Can you share with the audience what is collective sensemaking?

DIXON

Well, I think if I start with what is sensemaking is maybe the place to start.

CAHILL

Yeah, okay.

DIXON

And that is that all of us are all the time making sense of what we experience, what we read, what we hear, all of that. It is constant in our own minds. And it is also constant in organizations because in many ways the life blood of an organization are those conversations that are going on all the time as people are trying to understand why are we doing this, why don’t we do that, should we do this, that kind of thing. All of that is sense making. It’s two people sense making, or three people or four. So I use the term collective sense making really to mean those times when we deliberately say, okay now we need to bring people together because this issue, we do not yet understand.

So it is a different reason for bringing people together than we normally think of in organizations. Most of the time I think we think we’re going to bring people together so we can explain to them what the change is that’s going to happen or what they now need to do or what the new strategy is. But this is the opposite of that. This is bringing people together to say we’ve got an issue, a problem, that we have not figured out and I don’t - being the manager - I don’t have the answer to this but if we put our minds together we can come up with what we think will work and then we can go with that.

So it’s that idea. And I think it is based in part on a philosophical idea, which is my philosophical idea but I hear it everywhere, that if employees in an organization put their energy and time and their best thinking into their work they have the right and the responsibility to help shape what is going to happen. And I think we are seeing that now much more in organizations.

If you think about the Google walk outs around their not wanting to be involved in things that are related to war, or the Nike walk out of women who were saying women are not being treated right in this organization, people in an organization are beginning to understand that they have a responsibility to the organization to help the organization think about the really serious issues. So for me, that is sort of the philosophical or theoretical piece behind the idea.

But I think it’s coming about beyond that. I think it’s coming about because we have got more complex issues that don’t have... for which we don’t have any answers. We are facing new things all the time that we just don’t know... We can try different things but we really don’t know how to build... So the idea of really involving those people who are impacted by the issue is I think something we are really moving toward.

And another piece of that I think is the democratization of information that has happened just because of the internet and social media and all that, that we have had in a sense a hierarchical organization in which power is really... information is power. We have always been saying that, isn’t it? So if information is at the top of the organization then they have the power and the control, but social media is changing that. Now everybody in an organization has mostly the same information, so you can’t say, okay you’ve got more information than I do, you make the decision - it’s really changing.

CAHILL

So the concept, the old world where all decisions were made at the top of the organization or the organization was oriented around providing information up in order for a very small handful of people to make decisions, those days are gone essentially because of this complex world we’re in.

DIXON

Yes, I think that’s right. If not gone they are at least going, maybe, to say. And I might just give you some examples of that. Frederic Leloux has written quite an interesting book about many organizations in which hierarchy has essentially just disappeared. I might talk about one of those that was written by HBR, a brass foundry in France.

But before I do that, let me just give you an example because it’s easier to think about what collective sensemaking is if you have an example. So this is a company that I work with, which is Ecopetrol, which is the Colombian oil company, the state oil company. And because I am in knowledge management, they wanted to do knowledge management, hadn’t done it at all until... You could think of this as a change project, if you will.

And so how we went about that is I think an example of collective sensemaking. We brought together the top 200 people in the organization, including the best engineers, technicians, as well as managers. So these 200 people came together for three days at a lovely resort in Colombia, whose name I can’t even pronounce, it was something like Buca Romonga or something like that, but this lovely big resort.

And what we did was to bring in 15 representatives of companies who had done knowledge management really well, who had won awards for knowledge management, and we asked them each to come and each of them on the first day to speak for 15 minutes apiece, which is really quite amazing to begin with because some of these people had come from the Netherlands or from Finland or whatever and they came to talk for 15 minutes.

But we asked each of them to say how they were doing knowledge management and after each person had spoken, then a small group would take another ten minutes to talk about what they had just heard, and then we’d move to the next speaker. And the next speaker would talk for 15 minutes and then the groups would reform and think again. That went on all day. And what that was, was bringing in this expertise from outside, this amazing amount of diverse ideas.

The second day, we put people together in small teams around a table, five or six people, and we asked all of those people to think about two questions. One question was, what did you hear yesterday in the way of process that you think we could use inside of Ecopetrol? And the second question we asked was, what knowledge do we have that’s really important to manage?

And so the small tables thought about that and we had a notetaker at each table. And then after about 30 minutes, we dispersed everybody to a new table and they sat and talked about it again. And we did it again and again and again, until nearly everyone had had a chance to talk with everyone else about what they saw the answers to these.

And then the rest of us went out to take a trip into the beautiful mountains. We heard dancers and singers, we had a lot of time to socialize at the end of all three days, which was wonderful because it brought people together. But while we were doing that, the notetakers were putting together what they saw the major themes were that they heard in those tables.

So when we came back together the next morning they had 12 themes. They read off those themes and then we said okay, now, we are going to spend the day in that theme, what we want you to do is create action plans around that theme. So go to the theme where you have the most knowledge, where you can really contribute, and we’ll create those action plans. They did that, that took about half the day.

And then when we came back together again we essentially had a process that they had created. And the wonder of that was we didn’t have to sell it in the organization because the people who created it were the people that were now going to have to implement it. So that’s for me a really good example of collective sensemaking.

CAHILL

So Nancy, how do you think collective sensemaking will influence or is influencing a move away from hierarchical management systems and legacy decision-making constructs

DIXON

I think we’ve got good examples now of organizations that are functioning with reduced or very slim hierarchies. Some of them are ones you’re familiar with, Gore, which has been doing that a long time, Morning Star, Zappos, Patagonia, those have all been...

So what we have now are some models and so people can’t say, hey, it wouldn’t work, because we’ve got good models. So I think that has been a real help. And we have wanted to move away but we haven’t had the models, I think, in the past. We haven’t said okay, look what Patagonia is doing, we could do that. But I think we have them now and they are growing.

And one of those... Frederic Laloux, who has written about this in his book, I believe it’s called Rethinking Organizations, has written about 15 organizations that are doing something like that. And one of those is the brass foundry in French called FAVI. Have you seen the HBR article about that one?

CAHILL

Nancy, I have not read that article but please tell the audience, I’m very interested.

DIXON

This is a brass foundry in France. It’s a nice example of what we’d think of as blue-collar work. They make gear box forks, whatever those are, for the automotive industry. There are about 500 people and it’s very physically demanding work. And they essentially have no hierarchy. So many of these companies that Frederic Laloux writes about and that we are now learning about have either none or very little hierarchy.

And one of the amazing things about FAVI is that they have 50 percent of the market share of all brass foundries and all the other brass foundries have moved to China for labor. So this company is making it in France with higher wages and still has this great reputation for being on time, for good delivery, for high quality.

So, how they operate is this. Up until 1983, they operated like a traditional factory. In 1983, Jean François Zobrist, who is now the manager, took over and organized them into 21 self-organized teams that he calls mini factories. And each mini factory was dedicated to a specific customer, like VW or Audi or whatever, so each one had their own customer.

No middle management, no HR, no planning group, no engineering group, no purchasing group. Every one of those little mini factories does all those things themselves. All the rest of those staff functions have disappeared. The teams do their own hiring, they do their own purchasing, they do their own planning, they do their own scheduling, they do their own sales.

In fact, each team has a sales representative, they call him an account manager, and he’s the account manager for the VW team. So he stays in touch with VW, he finds out what do they need, he comes back to the team and says okay, here’s what VW needs and the team begins to plan about how they can get that done. If they want to get it done quickly and they don’t have quite enough people then one of, someone will go to another team and say could we borrow people for a little while, we’ve got this big order, but that is negotiated between teams not anywhere else.

And that account manager doesn’t have any authority at all, all that that account manager does is get the orders and then bring it back. But he is interested because he is a team member, he is interested in getting the best orders that he can for that team. So that’s how it works.

They have three meetings, each team has three meetings. One is this discussion with the account manager when he brings back the orders, another one is a discussion among the team members at the beginning of each shift, so, who is going to do what, and the third is a monthly open meeting. And those three meetings run that mini factory. And each team has a designated person that comes together for a few minutes with other teams and does any sort of coordination that needs to happen there.

So that seems amazing to me that a factory of 500 people could run like that with no HR, with no sales people, with all of that.

CAHILL

No, that’s an amazing thing. I have never experienced that at scale. I have certainly experienced it in a startup setting but the scaling of it is the very interesting part about it.

DIXON

Yes and other organizations that I’ve worked with are in the same... there is an organization in The Netherlands that I’ve worked with that’s a consulting firm that has a similar structure in that they don’t have any managers. No one in there is a manager. And they work as... again, a group sells to a client, that might be a leadership program, it might be agile, it might be appreciative inquiry, whatever kind of a program they sell, and they ask a few other team members to join with them. They set their own cost structure, here’s what we’re going to charge the client, and they do the project.

And they give back to the whole a percentage of their proceeds for the building that they all own. But there are no offices in that building. The whole building is open for just dinners, for lunches, for meetings, for things like that, but everybody works from their own home. And the kinds of HR kinds of functions we normally think are taken care of by volunteers. So there is a volunteer team that works on personnel issues, a volunteer team that comes together and works on finance teams. So it’s again a company that runs very comfortably and has for over 20 years with no managers.

CAHILL

Yeah, that’s amazing.

DIXON

I’d like to just maybe talk for a minute about what I think is possible. I was so disturbed, as all of us were, about what happened at Wells Fargo, about what happened at VW with the emissions problem, and I keep thinking if they had had... If Wells Fargo had brought together 200 of the people that were doing that work and said hey, we’re really having a difficult time here, we think we need to have each customer buying more of our products, how would you go about doing that as opposed to the way they did, which was to penalize people that didn’t do it and fire people that didn’t produce and created this awful mess because it was totally top down, I cannot help but think what if they’d used the wisdom of those people who really might have known about how to go about doing that. Does that resonate at all for you?

CAHILL

Yes, it absolutely does resonate with me. And I think part of that dynamic that you described was a dynamic of probably some fear, right, where your management structure is managed by fear. And the opposite is what you were describing where you pulled the team together collectively and they were engaged and they were a part of the solution. I think that is a big difference and absolutely would have uncovered any problems that were going on across the different groups. And I have always found that to be true. In some ways, it’s fundamental. Communication really gets you to an understanding and then to the right answer.

DIXON

Yes, I think so. And I think leaders... I see in collective sensemaking the leader’s role is to identify those issues around which the group needs to come together because they don’t need to come together around every single issue. It’s these issues that are difficult, that we don’t have solutions to, that that’s when they need to come together. So one of the tasks of leaders is to identify, what are those issues and then to frame the question in a way that doesn’t prescribe the answer. Because very often the way we ask the question has the answer embedded in it.

CAHILL

And it constrains the thinking.

DIXON

It does. That’s right, it constrains the thinking. So asking that question in an open way, I think, is one of the tasks. So, one of the most powerful tools I think a leader has is this power to convene people in the organization around those tough conversations.

CAHILL

Absolutely. So thank you for that. This whole topic of collective sensemaking is new to me but it certainly resonates with my own experiences and what I see that works and what doesn’t work. So your insight is very, very appreciated.

I wanted to close by just asking you from the perspective of either your early career, or even earlier in your life, where you found some inspiration that really influenced your work and the direction you took?

DIXON

Yeah, it’s always hard to know an answer to that question.

CAHILL

I know, yes, it’s many things.

DIXON

I grew up in a family, four children and my mother was a pianist. And she had been a concert pianist on the radio, which sounds funny now but... But so we all played musical instruments. And my dad was an insurance salesman. He sold in the rural areas of Kansas where I grew up. And often when he’d go to the farms that he was trying to sell at, the wife would not let him in because he was kind of a big, gnarly man and her husband was out in the field.

So my dad got the idea of going to all of these one-room school houses, which were dotted across Kansas, and the family would come and put on a musical program. And so I played the cello, my sister played the violin, I had a brother who was the saxophone and the clarinet.

CAHILL

I love the cello.

DIXON

So most of my growing up, from the time I was probably in the fourth grade up through college, we performed and practiced two and three... sometimes we’d perform even up to twice a week in these school houses. So that experience of being a part of a team and of helping the family... Oh, I should say I got two dollars a performance, which was really very nice. But that feeling that I was contributing to the group, the feeling of the team, what we did was together, I think that strongly influenced my thinking about how work happens in a way.

CAHILL

Thank you, Nancy. I find that in my experience that often when you talk about inspiration, there is some musical aspect in the story, just my own personal experience, and it’s refreshing to hear that, that that was an inspiration for you.

DIXON

I should tell the end of the story, which is that when my father would then go back to these farm houses, the wife would let him in and he could sell them insurance. So it worked, having this... Often the farmer would say, were all those children yours? And he would laugh and say yes.

CAHILL

Thank you so much, Nancy, it has been a pleasure to speak with you today. On behalf of PMI and the listening audience, I want to thank you for your great insights and spending your time with us today.  We look forward to working with you in the future as we push ahead with the Knowledge Initiative, so thank you so much.

DIXON

You are most welcome, Joe.