Tuesday, 6 March 2012

Goodwill Dependency

Most organisations rely on a proportion of goodwill from their staff from time to time. It is, essentially, the opposite of "work to rule". It is made up of things like short notice overtime and flexibility in working hours, unpaid overtime, covering for other staff, and other similar activities. It also represents the extra things staff do in their own time for the good of the organisation, and represents the heart, and passion, that employees bring to their employer rather than simply their back and their brain.

The very nature of goodwill means that it is a a gift. It represents what employees bring beyond their contractual obligations, beyond the time they are paid for, and naturally has an impact on the overall productivity of an organisation.

Whatever level of productivity your organisation currently experiences, some proportion of that will be down to the goodwill, the gift, of employees. It represents a valuable contribution to the success of your organisation. But do you know how valuable?

The goodwill blind spot

Even though goodwill can represent a significant contribution, it often goes unacknowledged and, even more commonly, unmeasured.

In practical terms it is almost impossible to measure goodwill. How do you know what employees are doing in their own time? Its ad hoc responsive nature (even inspirational nature), means that systems for accountability are unlikely to record it.

Ultimately this means that managers and organisations have, where goodwill is concerned, a blind-spot. Productivity is being contributed to, but by a means that is not being accounted for, and this can become a real problem.

Failing to recognise the impact of goodwill can lead senior managers to assume that current productivity or output is based purely on the investment and input they have planned for and accounted for. In this sense the impact of goodwill shows as an artificially high productivity or artificially reduced costs, and not as goodwill. Organisations are getting something for nothing, but failing to acknowledge it, or its value and impact, in their accounting and planning processes.

Goodwill dependency

When senior managers (1) fail to recognise the true nature of the goodwill their organisation benefits from,  and (2) assuming that current levels are based on staff meeting their obligations and not on their goodwill gifts (3) come to rely on that productivity, we have a goodwill dependency. A dependency on an artificial productivity built on an unacknowledged, unmeasured, and therefore unknown, portion of free labour.

In all seriousness, is this any way to run a business that will thrive?

At the very least risk assessments ought to factor "loss of goodwill" into organisational strategic decision making. At best, build a business that doesn't rely on something as precarious as free labour that may be reduced or withdrawn at any time, after all it is given at the discretion of the employee. Considering either of these requires goodwill to be acknowledged - it often isn't.

Ultimately a goodwill dependency left unchecked will lead to goodwill abuse.

Abuse of goodwill
It is true that different organisations will be more or less at risk of having a serious goodwill problem. Small organisations may rely on goodwill, but will also be more likely to recognise it for what it is. Larger organisations are more likely to take it for granted, given the distance between the goodwill and the strategic decision makers.

This taking goodwill for granted is the real problem. This can be done by either failing to recognise that goodwill  is being given, or treating employee goodwill as an extension of contracted time that can be managed, directed and even demanded as an obligation.

In the management culture of such organisations goodwill is no longer seen by managers as volunteered gift from the employee (if it ever was). But more importantly, at this point, it also ceases to be a gift in the mind of the employee. This represents a massive failure of managers to understand the implicit psychological and emotional contract that underpins goodwill and which leads employees to offer it intrinsically and for free.

The goodwill contract

Have you ever known anyone who loved their job so much, that they would do it for free? I have (he obviously didn't tell his employer). This situation has to be the holy grail of career development, and understanding that this situation does exist is essential to understanding the goodwill contract.

From the employee point of view goodwill often represents their particular area of enthusiasm and ingenuity. This is where they get to choose to go the extra mile on something they are passionate about and which can benefit the organisation. It could be development of a good idea until it is ready to show a senior, it could be mentoring junior staff and expanding their capacity and ability to contribute, it could be spending more time with a student who needs help, or spending their own time doing something they can be extra proud of at work. Whatever it is, it represents their passion, their intellect and is one of the main reasons they come to work.

Understanding this sheds light on why attempts to dictate what employees should do with goodwill makes of it an oxymoron. "That's not the bit I am passionate about" or "that's not the bit I love so much I would do it for free" is what goes through the mind of the employee when you demand and direct goodwill. Yes goodwill is given freely, but on the terms of the giver, employers cannot demand it habitually and expect it to remain goodwill.

There is a divide between what the employer pays to get, and what employees are willing and passionate enough about to give for free. Measuring employees willingness to work on a purely fiscal basis is a mistake because employees want to enjoy their work too, but expecting freely given goodwill to be at the beck and call of the employer in the same way as paid time is an even bigger mistake. At best it's like someone complaining that they don't like a gift they have been given and demanding a different one, but more likely employees will see it for what it is - demanding free labour.

Entitled to goodwill

Prolonged failure to recognise the true nature of goodwill ultimately leads to an entrenched expectation that if staff are willing to give freely to the organisation then there is no reason why that time should not be demanded, and directed for the employer's purposes and controlled by the employer. Work expands into evenings and personal time, and it becomes the norm. Meanwhile goodwill no longer represents the passion and ingenuity (the best parts) of the employees, it is simply more directed time controlled by managers - but which is unpaid.

Management attitudes to this can be quite astonishing. "They should be lucky to have a job" is one end of the spectrum with "I work all the hours so why shouldn't they" at the other end. Behind this, in many cases, is a  belief that employees owe this free labour and that it is an implied requirement in their being employed at all. At this point understanding of goodwill is gone, employees no longer have an outlet for their creativity and passion because employers are directing even their personal time and abuse of goodwill and entitlement has set in.

This is the kind of situation Covey is talking about when he speaks below about the importance of creativity and passion in an organisation:
"I find a lot of that is just drummed right out of big organizations, and there’s such profound disempowerment that most people find their satisfactions off the job, and then it creates kind of a dispirited culture..." (Covey, 2005)
The bottomless pit

Once goodwill is taken for granted to mean free labour, and while it is not properly acknowledged or measured, it is easy for it to become a bottomless pit of corporate expectation. In this situation employees find themselves under ever increasing demands and using ever more of their own time (formerly goodwill) to achieve these demands. Because no one is measuring the free overtime all that is reported is the increase in output from the employees, but all business assumptions are still based on the bit employer pays for. Productivity is artificially high, or costs are artificially low - whichever way you look at it this is a precarious situation.

If action is not taken to address a goodwill entitlement culture, and the associated goodwill abuse, that abuse can become rooted and "normal". In fact some sectors have grown into this situation over such a long time that goodwill abuse is now institutionalised. Arguably this predominantly occurs in what might be traditionally referred to as the "caring" professions - nurses, teachers, social workers etc. I think it no coincidence that these professions are also rated as highest risk for work related stress by the UK's Health and Safety Executive.

When institutionalised or expected goodwill is eventually recognised as being crucial to the survival of an organisation one reaction of managers is not to acknowledge goodwill for what it is and make it sustainable and real, but rather to increase scrutiny of staff and reinforce the demands being made. It may also be coupled with hints or talk of job security. The practical aim of such an approach is to build a culture of fear in order to maintain the status quo.

It is unlikely that this is ever discussed in terms of free labour, and in some sectors will be more likely discussed in more emotive terms, designed to win compliance from employees and ease the consciences of managers, such as by describing the "job" as a "vocation". Such terms imply that an employee should give their entire personal lives over to their employment, and are an attempt to nullify any discussion about overtime.

Such strategies hope to build norms and mores of free overtime that make it difficult for individuals to challenge the situation alone. This is reinforced by those who have come through such regimes and who, being institutionalised themselves, accept it as right and normal, in spite of the personal cost to themselves over the years.

And so the bottomless pit is established and maintained.

Resentment, loss of goodwill, work to rule

Such situations, however, are always precarious, and the balance can be tipped by seemingly unrelated things.

One example is the November 2011 public sector strikes in the UK. These were, on the surface, a dispute over pensions, which are generous compared to private sector workers. The government wants to cut them, charge the workers more, and pay out less in the end. Arguably what drove such a massive protest was the balance sheet's inability to account for the true input and dedication of the workers. On paper they may work 40 hours a week and appear to be over pensioned and over paid... but what was the reality for individual workers? I suspect that many of the public sector workers put up with ongoing institutionalised goodwill abuse because they think the long term gains will have been worth it, part of which is their pension. In this scenario threatening the pension brought over a million protesters onto the streets. If the protesters lose it may be that goodwill is the thing they take back.

On a more local level the phrase "most people find their satisfactions off the job" should be a major concern to senior managers. It means they have lost or are losing the passion and creativity of their employees, and now only get their backs and brains. Enthusiasm for goodwill is dying or dead. Employees are reaching the point where they resent giving any unpaid time to their employer. Formally or informally, work to rule is beginning to become the norm and nobody works late unless their survival depends on it.

From the employer point of view, without even knowing it, they are beginning to lose a portion of labour that has, until now, underpinned their success. But, as discussed at the start, because it has not been properly acknowledged or measured, the size and impact this gap in goodwill creates is unknown and the potential impact is also unknown. It might be a small loss in productivity and output, it might be massive. It will depend on the specific inputs that were goodwill dependent. Loss of goodwill in any business crucial area could come out of the blue, and cost dearly.

The alternative

While common, goodwill abuse is not the rule everywhere. In fact one of the world's most successful organisations recognised the value of what employees want to do as goodwill to the degree that it even builds it into their culture and working pattern. Which company? Google! 

So they don't have to rely on the chance that employees might stumble on something good in their own time, and to attract passionate and brilliant people, Google has implemented something they call "20% time". That is 20% of employees paid time can be spent developing their own ideas and following their own projects.

While it seems like a massive investment no one can surely doubt that Google is one of the most innovative contemporary organisations in the world. Why? Enough of the 20% time productivity turns into something that improves what Google does. According to their website 20% time has resulted in products that include Orkut, Google Suggest and Adsense for Content.

Where next

While some sectors, like the public sector and perhaps teaching in particular, attempt to demand and dictate so much from their employees that "goodwill" is quite simply a cultural expectation to work 50-70 hours per week simply to do "the job", others are making room for the passion and creativity inherent in natural goodwill and investing to make sure it happens.

While the organisations that dictate and control what was once "goodwill time" generate resentment among their workers, organisations that nurture and invest in organic and natural goodwill can reap significant benefits from the passion and ingenuity of their employees. Google is a good example of this and, given their global success, they must be doing something right.

Where next depends largely on the culture senior managers prefer to engender - oppression and diktat, or passion and creativity. Here are three of the possible options:

1. Build an organisation that is not at all dependent on goodwill by investing in all the employee time your company gains benefit from.
2. Acknowledge the value goodwill plays in the success of their organisation and nurture it so it will work for the benefit of their organisation and does not die out or get withdrawn.
3. Keep ignoring goodwill issues, increase employee scrutiny and pressure, develop and maintain a culture of fear and overtime.

The status quo is of course the easiest path, "do nothing" has often been advocated as better than making a snap judgement, but this is too serious to simply ignore. How you approach it will depend on the degree to which you want the creativity and passion of your employees, and not just their backs and their brains.

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