Preparing for Conversations with Rob Lebow
Achieving Accountability Through Shared Values

Rob Lebow
Master teacher, platform keynote speaker, author of the U.S. bestseller, A Journey into the Heroic Environment, and co-author of Lasting Change and Accountability

• Biography
• Interview
• Book review

PDF files

• Values and Attitudes Study
• Contrasting the Manager's Role
  With the Wise Counsel's™ Role

  Biography

As the subject of knowledge management becomes integrated into every corner of the workplace, many thought leaders are found outside the traditional KM circle. The 2004 STAR Series Dialogue will reach out as often as it can to knowledge professionals who are discovering the knowledge phenomenon for themselves and relating it to audiences outside our own community.

Rob Lebow fits that profile.

He is an accomplished master teacher, platform speaker, author of the U.S. bestseller A Journey into the Heroic Environment, and co-author of two books, Lasting Change and Accountability. He's the founder and creator of the Shared Values Process®/Operating System and the new TransAction Zone™ redesigned for organizations that want to create great customer transactions.

I first came across Rob Lebow when his book publicist asked me to review Accountability: Freedom and Responsibility without Control. I took it on a short vacation and really enjoyed it. Read the full review.

The focus of his work for the past 20 years has been the implementation of the Shared Values Process®; its purpose is to establish a Freedom-Based Workplace, and the outcome of this culture change, for any size organization, is the "creation of a great customer transaction" by an operation's front-line workers. It is the implementation of shared values that is the glue or link between the front-line worker and the customer, as well as the link between the front-line worker and what Rob calls Wise Counsels™ (the new role of middle management).

The Lebow Company's international operation was created to teach operations in every industry from around the world a revolutionary process that promotes a change in the current beliefs about people that they need to be controlled, monitored, measured and motivated. His research and experience suggests just the opposite. He proposes that people do not get up in the morning to fail, and like Edwards Deming remarked, "Don't change the people or try to fix them . . . fix the systems."

The Lebow Company is celebrating its 20th year in business. Rob has been married to his college sweetheart for the past 36 years and they have a 19-year old daughter. Corporate offices are in Bellevue, Washington, USA. He holds a master's degree in urban planning (MUP) from City University of New York and a bachelor's degree in International relations from Miami University, Oxford, Ohio. Prior to starting the Lebow Company, Rob held a senior position at Microsoft Corporation, Redmond, Washington and was a leading division manager at AVON Cosmetics of New York during his 20 years in Corporate America.

  Interview with Rob Lebow

To help AOK members prepare their own questions and comments for Rob Lebow during the January, 2002 STAR Series Dialogue, AOK founder Jerry Ash interviewed Rob and came away with a comprehensive summary of the points made in his newest book Accountability:

Jerry: Where did your ideas originate?

Rob: In 1972, social psychology graduate students at the University of Chicago acquired 17 million surveys from 40 countries. They were looking for a tie-in between job satisfaction and performance. They abandoned the project after several years and it lay dormant for 17 years. When I got hold of the data, I dubbed it the Rosetta Stone of organizational social psychology because I felt sure it held the key to understanding high performance and I knew the key wasn't going to be job satisfaction.

John Naisbitt, who wrote Megatrends, gave us the clue as to how to make sense of the data. He had used the number of column-inches on a topic in newspapers as an indicator of important trends. Similarly, we scanned for the words that kept recurring in these 17 million surveys. We found that there were eight key concepts that kept cropping up over and over again.

Jerry: What were those eight key concepts?

Rob: Let me list them:

• Treating others with uncompromising truth
• Trusting
• Mentoring unselfishly
• Being receptive to new ideas regardless of the origin
• Taking risks for the organization
• Giving credit
• Honesty
• Putting the interests of others first

These Shared Values were the "whack on the side of my head" that showed what really mattered. I thought they were important enough to patent them.

I'm ex-Microsoft, and at Microsoft we learned "it's the operating system, stupid!" Similarly, in any organization there is always an operating system in place and it's either a control-based environment or a freedom-based one. The difference between those two is what my three books are about and it is the essence of my work.

Jerry: How did you take these ideas out of the world of research and into the world of business?

Rob: We went through a very defined Process with over 200 clients worldwide to install these eight critical Shared Values. But, these eight elements were intangibles. They weren't really a deliverable product. The people who hired us understood how powerful values were, but Shared Values in themselves were not a deliverable. Shared Values created a context in which people could work, a state of how we could operate of how we could treat each other and our customers.

So here is our thinking after 20 years . . . . Note how the right-hand column addresses creating a customer experience that the customer drives the TransAction, not the organization or some process, policy or rule. And that's the key to successful customer relations. The early Clinton Administration knew it was the "Economy Stupid" that the voters voted on in getting Bill Clinton elected over George Bush senior, and it would be the economy that Clinton would ultimately be judged on . . . not foreign policy.

So the graphic below takes you through the differences in approach as we serve customers. We believe the only answer is in the right-hand column; but we will let your subscribers be the final judge.

For many leaders we approached, this idea of Shared Values being the answer to a successful culture change was way too soft. They were used to Deming's quality message and promise or Michael Hammers reengineering approaches. So, it was very rough sledding trying to market Shared Values as a stand-alone product, especially to a business world that thought you achieve results by managing, motivating and incentivizing people in the traditional pyramid structure.

Decision makers said, "We don't disagree with the importance of Shared Values, but how does this equate to my bottom line?" For the past 18 years we've been trying to answer that question. And now we know the answer! We know how to deliver Great Customer TransActions while at the same time significantly reducing costs! Great Customer TransActions require a Freedom-Based TransAction Zone, not a control-based Pyramid! And, Shared Values is the glue. And, boy do Great Customer TransActions have an impact on the organization's bottom line. They're the key to the long-term success of any operation. We've discovered that Great Customer TransActions happen best in a Freedom-Based workplace supported by Shared Values. A Freedom-Based workplace expects that every front-line worker is both responsible and accountable for delivering Great Customer TransActions; and Shared Values allow people to relate to each other as thinking and responsible adults.

What was perplexing and frustrating to us over the past 18 years was that when we installed Shared Values, sometimes they worked sensationally well and other times they didn't. Now, we know why that happened. When they didn't work well it was because the organization was holding onto its control-based systems, policies and procedures instead of trusting people to do the right things. Peter Drucker had it right after all when he suggested that what we want is people to do the right thing, not to do things right.

Jerry: Have you nailed down how to get past the soft stuff and explain this in a way that CEOs and COOs can relate to?

Rob: Yes, we finally have! Managers want the people who work for them to be accountable . . . that's a given, but how to get there is not obvious. The essence of our book Accountability is about how you get there. Our epiphany was that unless you link accountability and responsibility within the same front-line worker, you'll never get accountable employees. It's the "strings" that are placed on employees -- policies, incentives and performance standards -- that destroy accountability, and the most frustrated folks of all are the customers who are on the outside banging on the pyramid.

As Jack Welch of GE fame said, "If you're facing me, then your rear-end is facing our customer." In a control-based environment the front-line worker tells the customer, "I'd love to do that for you, but our policies don't allow it." Programs such as Six Sigma, Balanced Scorecard, matrix management and so on go in with wonderful intentions, but fall short for the customer. They fall short because they force employees to focus on pleasing the boss by following the policies, earning the incentives and conforming to performance standards, not on pleasing the customer. And, as the graphic illustrates, most of the customers just give up!

Jerry: How do the Shared Values fit into this contrast between Freedom - Based and control-based environments?

Rob: The rule in a control-based environment is that you follow the rules or you get your head chopped off. Now, think of those eight Shared Values and what happens in a control-based environment.

In a pyramid, a supervisor might get his head chopped off for disclosing "secret information." Do you think you can tell your subordinates the truth? There's the belief that if we told our front-line workers the truth it would freak them out or that it's none of their darn business. Similarly, the front-line worker knows that she'd be crazy not to bring filtered information upstairs because the truth could limit her promotion or worse.

Secondly, trust is alien in an environment that is highly competitive. The control-based mindset basically believes that people are not trustworthy. Therefore, we need to create environments that measure performance and that follow up on results. How often have you called up a company and heard, "We may be recording this for quality purposes"? Are we all kidding each other? It's not about quality -- it's about control.

Consider the value of mentoring upward. In the days when railroads ruled transportation can you imagine a junior employee going to top management and saying, "Hey, there is this new thing called a truck. Wouldn't it be a smart idea to use trucks to deliver merchandise to our customers who aren't near our rail centers or depots?" The whole notion of going upstairs and mentoring the boss or top management would be unthinkable in a control-based environment unless you had a death wish.

There's no way that anybody wins in this old-style pyramid model and that's why so many dominant players in a particular industry have disappeared. How many of the Fortune 500 industrial leaders from 1950 are still around? We know that the boss doesn't win because he can't get his own people to be as accountable as he'd like. The front-line worker doesn't win because he has no control over changing the policies, systems and standards that get in the way of Great Customer TransActions. The customer doesn't win because he's on the outside of the pyramid waiting for a front-line worker or the worker's supervisor to get it together and meet his needs.

Jerry: Perhaps you can contrast the control-based environment to the freedom and accountability environment you espouse.

Rob: We think imposing control systems doesn't work long-term and they don't serve the customer or stockholders best interests. We have divided control-based approaches into three generations, philosophies or strategies. The first is top-down; the second is incentive driven and the third is measurement driven. These are all control-based concoctions and they're all anti-people approaches. Here are some control-based ideas that often harm the workplace and the people who they are focused on: performance reviews, incentive programs -- including pay for performance, top-ranking, restrictive policies, job descriptions. These control-based ideas actually inhibit long-term performance because they encourage cheating. The Enrons, Andersons, Firestones and WorldComs are all good examples of letting the Genie out of the bottle on these kinds of programs. Not only are imposed controls anti-people, they are also definitely anti-customer. They brought us the Sarbanes-Oxley Act [SOA] that is supposed to control unethical behavior. I went to college with Mike Oxley, congressman from Ohio ,and what he just said on the first anniversary of the SOA is this.

"A year after the Act was enacted, I am more convinced than ever that there is no substitute for honesty!" ­ Congressmen Mike Oxley

So even my college colleague knows the limits to "Controls." And that is exactly what we are suggesting. Self-regulation will work, but never in a control-based environment that promotes falsification, duplicity and manipulation.

Jerry: Harvard's Shoshana Zuboff says the current form of managerial capitalism is doomed because it inherently cannot meet the needs of today's customer.

Rob: I agree, and we feel we have the answer: move to a Freedom-Based environment based on Shared Values where people are trusted to do their job and to own their decisions. HR has been profoundly corrupted with behaviorist thinking and are obsessed with fixing people, when in fact they've had the answer all along -- stop fixing people and start trusting them completely . . . or replace them with people who can be trusted. That was Deming's message and it is ours as well.

When people get up in the morning they don't say, "I can hardly wait to go to work and fail, to be the horse's rear-end, to produce shoddy goods, lie to my co-workers and perform badly in front of the customer." That's not what they say, that's not what they think, and yet we've created systems, policies and processes that assume that this is, in fact, their level of motivation.

The magazine The Economist did a 50-year analysis of profits. Note how
profitable business was in 1950. Is it just competition that has led to this enormous profit slide? We'd suggest that as management heaped controls onto their operations to improve profits by cutting costs the reverse happened.

I'm neither an optimist nor a pessimist. I'm a researcher. We have the data from over 2,280 organizational sites worldwide that suggest what people need to be successful. Our data confirms how expensive it really is to operate a control-based pyramid and it correlates with The Economist graphic.

Our data proves that people all over the world, regardless of religion, race or nationality, want the same things in their workplace -- an environment where it's safe to tell the truth and where everyone can be trusted. When this occurs our data suggests that profitability will soar!

Jerry: How does this tie into accountability?

Rob: Using the traditional control-base pyramid approach, accountability and responsibility are separated. If I work for you, I'm responsible for certain tasks and you, my supervisor, are accountable for my results. But in the end, neither of us is accountable because I don't have the authority and you don't have the information. You feel out of control so you measure my output or use an incentive. These approaches become addictive . . . and you put in more and more controls, policies, incentives and measurements. Before long you're living the nightmare of plummeting profitability.

The alternative is to create TransAction Points between the customer and front-line workers where every transaction becomes a gift for the customer. The moment of truth occurs when the transaction goes badly. If the front-line worker solves the problem, eliminates the TransAction Block and delivers a Great Customer TransAction, everybody wins!

In a Freedom-Based environment there are no supervision levels, there are only people who we call Wise Counsels. This new role for most organizations is very different from a traditional supervisory role. Supervisors say, "You work for me," whereas a Wise Counsels says, "How can I help my front-line worker(s) without taking responsibility or accountability away from them?"

Managers delegate, Wise Counsels help people develop skills and pursue new adventures.

Managers communicate their performance expectations; Wise Counsels help their staff reach their potential. Managers do the thinking; Wise Counsels foster creative thinking. Manager's focus on tasks; Wise Counsels focus on developing people who own their jobs; The differences are tremendous. To pull it off, you need to hire people who have both demonstrated people skills and common sense. Here's why: In the new TransAction Zone. . . there is just one rule: Find a way to create a Great Customer Transaction! Great Customer TransActions are made possible by linking responsibility and accountability at the front-line.

Here's what Yogi Berra, the famous New York Yankee catcher and later baseball manager, renowned for his mixing up words, but getting the point across anyway, said when asked: "How do you become a great manager in baseball?" Yogi without a moment's hesitation, quipped: "Hire great ballplayers!" And that, indeed, is the answer. Then, as Yogi would say, let them play ball, their way! Note how we capitalize the "A" in TransAction. This symbolizes the importance of the front-line worker taking action for the customer and "not avoiding responsibility by passing the buck to management or using the excuse that company policy won't let him serve the customer."

If a front-line worker needs help in removing a TransAction Block, then the Wise Counsel gets involved. But the Wise Counsel doesn't take responsibility of accountability for making the final transaction! Together, the front-line worker and the Wise Counsel come up with a workable solution for the customer. They don't let systems, policies or processes get in the way. Now, that's a new idea for most organizations. SouthWest Airlines, The Ritz Carlton, Nordstrom, Emirates Airlines, Amazon.Com, TGI Fridays and thousands of other operations in every business environment imaginable are thriving by delivering Great Customer TransActions. The key question is: Should our customer drive the transaction or should we? Henry Ford, God bless him, suggested that: "The customer could have it in any color as long as it was black!" I've got to believe that we still have many leaders who still practice this approach.

The traditional control-based approach espouses that product, price and processes drive the customer transaction. We couldn't disagree more. Our research and 20 plus years of hands-on experience with customers worldwide suggests that it's the customer ­ not the processes, price or products ­ who should drive the transaction. That's why we're recommending to every organization that they create Great Customer TransActions through a Freedom-Based approach supported by Shared Values. We've constructed two elegant models we call the TransAction Zone and the Customer Centrix Model™ that redefine organizational design. Please note that the Customer Centrix Model consists of multiple TransAction Zones that operate without the need of centralized controls.

You might ask, where is management? Their role is redefined. Rather than directing activity from the top, as they would in the traditional pyramid model, management takes on the role of supporting Great Customer TransActions. And either top manager might work in a particular Transaction Zone such as Marketing, IT, Manufacturing or Sales or they may form a Support group that could include Finance, Administration, Research or Purchasing. All these functions will also be duplicated in each appropriate Transaction Zone. Management now supports, but does not drive the day-to-day TransActions. Its main function is to supply a vision and create the environment for each TransAction Zone to work safely, innovatively and in concert with the other Zones. Connecting people and ideas is a key role for top leadership.

Here's how the Customer Centrix Model is installed into an organization. We first focus on the role of Leadership in creating TransAction Zones that are the building blocks of this model. Second, we focus on the culture. That's where Shared Values comes into play because it is the sharing of our values that is the oil that lubricates the machine. Third, we reinvent the People Systems™ or HR-Systems as they're best known. Finally, we deal with the issue of how to sustain this new culture that supports Great Customer TransActions.

Jerry: What is this environment like for the front-line worker?

Rob: There are six actions a front-line worker must be prepared to do:

1. Make the TransAction [The number one priority.]
2. Communicate what's going on to those who will be affected by the decision or action taken.
3. Measure performance using their tools of choice. [Note that we offer tools, but management no longer does the measuring, assessments or feedback.]
4. Work independently. [If a front-line worker has to come back to a Wise Counsel's desk and ask what's next, after they are well trained and have committed to "own their job," then he won't be able to stay. A TransAction Zone environment is not a soft cushy place . . . it's all about taking responsibility and accountability for one's decisions, actions, behaviors and performance. Everyone makes mistakes. We fix mistakes, but we can't fix people. Mistakes don't get you a one-way ticket out of an operation. It's the lack of courage to take
5. Work as a productive member of a group. [Front-line workers also need to learn teaming skills.]
6. Challenge the policies, processes, systems and workflow designs that thwart any customer transaction. [TransAction Blocks™ must be faced and responded to.]

The number one issue for leadership in this environment is making sure we only hire people who want to be great and will work independently and come up with creative solutions.

Jerry: What's the environment like for the "Wise Counsels" who replace the supervisors and managers?

Rob: Wise Counsels Coach and Counsel. They help individuals understand the notion of financial stewardship ­ Open Book Management is probably the best way to describe it, although there are some parts of Open Book Management that are control-based and we don't agree with in principle. Wise Counsels are Resource Providers. That doesn't mean they dole out the resources, it means they help with the co-ordination of resources. They become problem-solving champions; they don't solve problems and hand over the solutions to front-line workers, instead they champion the idea of solving problems and decision-making. Finally, Wise Counsels partner with staff members without taking responsibility or ownership for the decisions, and boy, is that a tough one for many confirmed "control-freaks!"

Jerry: What is the role of top management?

Rob: Top management does five things to transform into the TransAction Zone. Let me list them:

1. They give permission to challenge everything if it interferes with the transaction.
2. They promote a safe environment where opinions, new ideas and questioning are safe to pursue.
3. They promote the vision of the TransAction Zone and encourage every member of the staff to create a personal Keen Internal Vision™ for himself or herself. [A Keen Internal Vision is an individual's purpose for getting up in the morning and going to work.]
4. They promote the idea of setting higher standards for products and services.
5. Top management encourages the eight Shared Values.

If front-line workers, Wise Counsels and top management play their roles in creating a customer-centered TransAction Zone approach to conducting their business and live their Shared Values, this energy fundamentally transforms the nature of the organization. We see this in an operation's profits, quality, reputation, ethical behavior and overall success. Reaching new heights seems to come rather easily to operations that put the customer first, not in slogans but in actions.

Jerry: Thanks for taking the time to introduce our members to these ideas. We look forward to your time as STAR Series Dialogue moderator, January 19-30, 2004.

Rob Lebow and Randy Spitzer are authors of Accountability, available through the AOK Bookstore.

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