David Burkus

Peter: To go to the punchline, what you’re seeing out there is this shift from the Taylorism, which is a control based management methodology, to what I see underlying a lot of these practices is the necessity for trust. For management to be able to look at everyone else in the organization and say, “I trust you,” and I trust you might mean, “You choose your own vacations, I’m not going to track that.” I trust you might mean, “I’m going to be completely transparent with all the salaries, and explain why and trust that that’s not going to throw you.” Trust can mean a number of different things, but it seems like underlying this new management shift is a requirement for a very different level of trust?

David: Yeah, I mean I agree with you. It’s interesting, we, for a long time talked about trust as this wonderful, nice thing to have and we have trust falls that are parodied throughout all sorts of fun movies and TV shows about workplace life. Where I come in is I think in 2016 trust is really our only option. The nature of work has changed so much. It used to be that Taylor, with his stopwatch, and his ledger, and his pencil could observe people working and figure out the best way for them to do the work. But now, so much of the work that we’re asking people to do is so creative and so knowledge based that the frontline worker really is the person who knows how to do the job the best. Management turns to having no other choice but to trust them, having no other choice but to say, “You know how to do your job best, and my job is to get you what you need in order to do that work, I mean and also make sure that you don’t do anything unethical or illegal,” but primarily it moves from a role where we command and control to a role where we support because our only option in this workplace and the type of work we’re doing now is to trust.

Peter: All of the ideas that you share are ideas that are already in practice, so it’s not you theoretically saying, “Oh, this would be a great idea,” but you’re looking at what’s going on in various industries and various companies and saying, “They are trying this and it’s working.” Let’s just jump on one of them, which is not ordaining specific levels of vacation or vacation time, but saying, “You take time when you need it, and we don’t tell you exactly when you have to work. We don’t tell you exactly when you take off. You just have to get the work done that you need to get done.”

David: Yeah, I mean some people call that unlimited vacation. I think the better term for it is a no-vacation policy policy, right? “Our policy is we don’t have a policy.” The reason for that, I mean it starts with that trust piece again. We’re in a system now where the needs of the workplace, the needs of the workers demand. We’re not really tracking, “Did you get in at eight or nine? Did you stay until five? Did you only take an hour for lunch?” The reality is, a lot of times people mix work and vacation together. A lot of modern workers now still know that they’re going to be working on some project, even if they’re traveling with their family or what have you. It really stemmed from this idea that if we’re not tracking that stuff, why are we still nickel and diming, tracking the perfect vacation policy? Really, the vacation policy if you think about it, is something that came from that factory mentality, that factory world.

If you’re trying to keep a factory running 24/7, then you know you’ve got two to three shifts and you need all of those shifts staffed, which means you have to hire X number of workers and you got to make sure that people don’t take their vacations at the same time, or too much of it, so that you can keep the factory running on as minimal staff as possible. We don’t work in that environment anymore and if people-

Peter: Although some would argue that we do, right? The obvious example is if you’re in accounting, everybody can’t take off the two weeks at the year end, or two weeks at the last week of April. But more broadly than that, in general, we still need coverage, we still need to coordinate don’t we?

David: Yeah, well it’s interesting you used the word coordinate, and that’s exactly what I found. One of the ways that I was researching this book was I demanded that every idea and every policy had to work not just in Silicon Valley, but had to work in more real jobs. I found a hospital in Windsor, Ontario actually where the entire nurse’s system runs on unlimited vacation. What’s interesting is, they had to coordinate and collaborate better as a team to figure out when people would be there. The mentality shift there was just amazing. It literally shifted from people going, “Oh, well this is our crunch time of the year,” what have you, “And so-and-so decided to take vacation,” to, it wasn’t that people were harming you by taking vacation anymore, it was, “Everybody gets a turn, we’ve got to figure out how to parcel this out right.” It really was now kind of a team effort so that vacation was seen as something nobody had angst for you anymore for disappearing on because it was all collaborated together. That’s really that key, is that trust and collaboration.

Peter: Did you find resentments grow with some people looking at others who take more vacation and thinking they’re getting away with it, or, “They’re not treating this policy with the kind of respect that I am?” Did it create any of those kinds of tensions?

David: You know what? A lot of the pushback that you get is that and the idea that people just aren’t going to take a lot of vacation. A lot of that is hypothetical. What you find is that the average number of days of vacation that people take is around the same, but the bell curve kind of widens, so some people take more, some people take less. But most of the time you’re implementing this in a culture where there really is an understanding and appreciation that everybody’s in different stances in their life. I have two really young kids, they’re four and two, so the flexibility that I need and the kind of time off that I need is going to be very different than when they’re both in college and I can give more of that time, or when I didn’t have any children, right?

Different stages of people’s lives and different work meet those different demands. I think overall there’s an appreciation that this new system allows that to happen instead of trying to create … I mean, most vacation policies are well meaning, but they’re trying to create something that works for everybody, and we have so many different type of people in the workforce now and so many different roles that they play outside of their job that you really can’t create a one-size-fits-all policy anymore and so you have a one-size-fits-one and it’s a different policy for every person.

Peter: I know a leader in an organization who looks at this and says, “Great idea,” and actually instituted it in effect. It’s a slightly different situation, what he instituted was flex-time in his company. He basically said, “As long as you’re doing your work, I don’t care whether you’re the office” But then, he needed someone and he looked up and he says, “Where’s Jane?” “Well, Jane’s working from home.” He gets frustrated and he goes, “I need to talk to her, I need to have a meeting” “Well, you could call her.” “Well, I need to have a meeting with her.” I guess my question is, how do we manage this transition? How do we help people who like the idea, but they struggle with the execution. They’re in effect having to learn to work differently and learn to trust, and in many cases they’re the leaders of the organization.

David: Yeah, and it’s interesting, this came to light a lot. As I was writing the book was also when Yahoo had that big announcement that the work from home policy was going away and everybody had to be back in the headquarters, et cetera. Really, I think this is an issue that comes down to culture, both of the organization and of the people in it, and what they can tolerate. I mean, just like there’s no … That’s why I like to call it a no-vacation policy policy, instead of unlimited vacation because the policy’s not unlimited, the policy is we’re going to let each individual person kind of come up with, between them and their team and their manager, what works best for them. I think the same thing applies to different organizations.

I’ve seen some implemented, and it honestly didn’t work because the culture of trust wasn’t there. I’ve seen others implement it with specifics, like you joked about accounting, but it is that idea of like, “Okay, it’s unlimited vacation except during these times.” A lot of companies have to figure out, when it comes to flex-time, which is a little bit different because it’s around where and when can you work? Not vacation. A lot of them have to figure out what works for them. Some of them will have core hours, and then other ones … Amazon is actually experimenting with this as we speak with the four day work week for most people that sets, “Okay, you’re going to be here during these hours, but then beyond that, we don’t necessarily care.” This is where my job is to connect what’s working with the social science behind why it’s working and not advocate for a specific model.

I wish I could be that consultant with the four box model and the charts and, “I’ll charge you 50 grand to implement it into your company,” type of thing. But A, that’s not my role, and B, I’m not really convinced that there is a one thing that works across every single company policy, whether it’s for flex-time or for vacation. I kind of got to see what your culture and your people can tolerate.

Peter: I really liked that element of the book, and you talk about it in terms of the anti-best practice, right? I mean, I don’t think you use that language, but you don’t like bast practices and I feel exactly the way you do, that every situation is different, that the context in which you’re operating in is critical. If you try to take one policy, one idea from one company and bring it into yours, there’s a big chance it’s going to fail because there’s a million different variables related to your company. My question though as I read the book is whether you’re proposing these as best practices. How do you talk about these and not say, “These are the new best practices?”

David: Yeah, and actually one of the early working titles for the book was The Worst Best Practices, right? Because it was this idea that these look so terrible compared to best practices, but the actually work. But, I don’t know that anybody buys a book called The Worst Best Practices, so we did away with it. One of the things I’m careful to do in each … Like I said earlier, I’m trying to make sure it doesn’t just work in Silicon Valley, it works somewhere else, is a lot of them I look at the core principle and the social science behind why it works, but then talk about some other ideas that meet that same core principle, but look in policies that are different. I look at it as like a continuum, right? On the one hand you have the unlimited vacation, on the other hand you have companies that found that for their people, paid, paid vacation works better. In other words, “We’ll give you a bonus if you actually hit all of your vacation,” because they’re trying to force that rest.

For some organizations, I was actually fascinated to see that TED, the big non-profit that runs the conferences and everybody watches the TED Talks, they have two weeks a year where they just shut down, the whole office. It’s not, “I can’t find such and such person,” because they’re not on vacation, everybody’s gone, right? Again, it keeps in line with the theory and the social science behind why the policy works, but I look at it much more as a range than anything else. Salary transparency’s probably the best example. You can go from everyone and even customers knowing to what an employee makes, to just not preventing employees from sharing that salary information. There’s a whole continuum of transparency you can pick at, and it’s on leadership to figure out where in that continuum it comes down.

Peter: Yeah, the salary transparency was very interesting to me too because I know a company, and this was back in the late 90’s when the internet boom was keeping everybody very excited- It was very, very hard to bring new people in because the economics were changing so fast that if I was bringing a programmer in in January and another one in March, I had to pay the other one in March 20% more in order to be able to attract them because it was a very, very tight labor market. The people who had been there the longest were getting paid less than the people who were there shorter because you needed to spend more money in order to attract them.

The head of HR of this company who was subsequently fired immediately, sent out an email to everybody in the organization telling them how many vacation days everybody had left in order to encourage people to take their vacation. But instead of sending out vacation time, he sent out salaries. Everybody saw the salaries of everyone else, and in one day there was 30% turnover in this company because people couldn’t stomach what looked like very, very unfair policies. You talk about some ways of implementing this, but I wanted you maybe to speak to that.

David: Yeah, so first of all, if you’re not using a uniform system and a fair system that you can point to for how you’re determining your salaries, then by gosh, do not make salaries transparent because you’re going to see that.

Peter: That’s a real rule of trust, right? Which is the rule of trust is if you’re going to rely on trust, you have to make sure that you’re very, very thoughtful about the fairness of the system that you’re creating.

David: Right. My problem and my pushback with that particular organization is why weren’t, as you’re increasing salaries by labor market demands, why are you not increasing the salaries of the people you already hired? Not just from a standpoint of fairness, but from a standpoint of turnover, right? If that’s what the market is demanding, then that’s probably what you’re going to have to pay just to keep them, because they’re probably looking to jump somewhere else to get that jump in pay too. It starts with that idea of, “We can point to a uniform system that we use to determine salaries for everybody.” A lot of companies, the level of transparency is just saying, “Here’s how we calculate it. We’re not going to tell you what everyone makes,” I guess you could plug it in if you can figure out all the variables, but we’re able to say, “Here’s how we decide,” so now we can show, “We can have a conversation about whether or not this is fair, but this is the uniform standard we’re applying to everybody so that you know it is fair and you can trust us that we have your best interest in mind.”

Peter: What feels very important about that, and important to mention, is that if you are going to go to a system like this, which is transparent, or even as an individual if you’re choosing to be transparent, it requires that you pause and think through, “Am I being fair? Am I being legitimate? Am I doing things that I’m completely fine with everybody seeing and understanding?” You have to hold yourself to a higher standard than you might otherwise if you were relying on secrecy. That doesn’t mean that the people who are relying on secrecy, and that sounds nefarious, but it doesn’t mean that they’re bad people or they’re trying to fool people, but we can get lazy and a little sloppy.

We can kind of say, “Well, you know, I don’t want to bring those other people up because they don’t know they’re getting paid less and that’s another couple hundred thousand dollars to our bottom line, and they agreed to those salaries.” You can always convince yourself and rationalize the acts that you’re doing because the truth is they’re gray lines. It’s not inappropriate to say, “I’ve hired you at $50,000 and I’m not going to increase your salary every two months just because the market’s changing,” nobody really expects that. But if we’re going to go to transparency, we have to hold ourselves to a higher standard and say, “You know what, even though I don’t have to do it, I’m going to be really open and trustworthy, and in order to do that I’m going raise everybody’s salaries,” which is going to cost the company a lot of money and that’s a big commitment for the organization to make for the sake of transparency.

David: True, and I believe it’s one where the ROI is definitely there because again, if you’re … You actually used the perfect word to describe it, lazy, right? It’s 2016, I don’t believe that there are any HR leaders or CEO’s out there that are deliberately trying to discriminate against different employees or to be deliberately unfair to employees. I just think secrecy, it’s easier to not deal with the issues as they come about. You’re exactly right, you do have to hold yourself to a higher standard. The payoff that I’ve seen in looking at these companies, and this is everything from technology companies to companies like Whole Foods and workers that we would consider sort of low-skilled, they’re working in a supermarket workers, actually all the way up through the whole company, so everybody’s transparent.

It runs the whole gamut of types of employees, et cetera, that are again, holding themselves to that higher standard and keeping it. I think there’s a payoff, you get better engaged employees, over time you get better employees. There’s some evidence that shows that especially talented women and minority groups are drawn to transparent companies because they know, “This is a place that’s going to treat me fairly no matter what. I can trust them.” You get a better quality of employee and the ROI is definitely there. I’ll be the first to tell you, it takes a lot of effort, and if you’re not willing to do that then please don’t go to transparency. But I hope that we can also convince you that you should do that, and especially to attract top talent you need to do that.

Peter: You’re not saying this, but it feels important to me, which is that it’s a policy that ends up letting you sleep better at night. That in fact, not only is it right in terms of women and minorities, but when you’re holding something secret, even if it feels legitimate, there’s energy that goes into not sharing it with people, being worried about what happens if people find out, recognizing that if it did come out it wouldn’t look great. Even though you can legitimately claim, and legitimately continue a policy that’s not necessarily transparent, there’s something relieving about saying, “I’m going to run this in a way that’s completely above board and completely beyond reproach,” and that that will pay off.

David: That’s exactly right. Actually, once you make the switch, it’s actually easier to stay transparent because any conversation shift from, “Oh, this is so unfair, Tom gets paid more than Steve and they’re equally competent employees.” Well, now there’s no animosity between Tom and Steve. Now they’re having a conversation about what in the system allowed that to happen and should we change it? I’ll give you an example, it happened after we published the book, but Buffer is one of companies, they’re a technology company that we profile about transparency, and they actually have the highest level. They share their salaries with customers and it’s posted on the internet for all to see, which is honestly a level of transparency most organizations I don’t think maybe even want to get to, and that’s okay. But interestingly enough, there was kind of a hit job piece, I don’t want to say which magazine because I don’t actually remember and I don’t want to unfairly implicate them, but the headline read, “Buffer has salary transparency and still can’t solve their wage gap problem,” right?

Then you read the article and what it actually is, is Buffer went to salary transparency, they used this formula, they found out that one of the ways they determined pay-scale is experience. Experience was judged as one to three years, three to five years, five to eight years, et cetera. What they found was that men who had five years of experience were more likely to say they had five to eight than women who would say they have three to five, and so Buffer is taking steps to mitigate that so that everybody’s fair. The real headline should read, “Buffer has salary transparency, it points out a wage gap, and now they can take proactive steps to fix it,” which is the real sort of meat of the article is that this system actually makes salaries fairer over time because more people are involved in helping figure out what is the best system to use?

Peter: You make an interesting point, which I think gives people pause before they make any of these kinds of changes, and that is the challenge in going back, right? We’re operating in a certain way and when we suddenly make everything transparent it’s very hard to say, “Okay, you know what, that experiment didn’t work so we’re going to go back to not transparent.” I can think of a number of different ways. When you kill the performance review, which I’m a proponent of doing, it’s very hard to bring it back if you find that it’s absence is not working effectively. How do you help people through that hump, which is a very real hump of resistance to change because of the difficulty of changing back?

David: Yeah, so this is again where I see these as steps in a continuum because they’re smaller steps at that point. To go from zero to everybody knows what everybody gets paid, that’s a big jump. Or to go from annual performance reviews solely documented in your permanent file to now, we’re just going to do away with the whole thing. Mmm, that’s kind of hard. What I advocate for, to use the performance evaluation, is to take steps towards it. You have your annual review, I actually love what Adobe does with their check-in systems, so that’s an informal conversation, can be as frequent as once a month or once a week, as short as 10 minutes. All it has to do is talk about three things in the same conversation, expectations, feedback, and growth and development.

What I usually advocate for when I work with companies now, is don’t eliminate one and institute the other. Add check-ins, get people trained on check-ins, and then over time, as that is getting up to speed, if you have a year or two where there is also an annual review, A, it’s not going to be a surprise to anyone, but B, you’re going to be able to see, “Okay, well if we do away with the annual thing now, are check-ins enough to sustain us?” A lot of companies I see, and especially highly regulated industries, they still want some permanent documentation, and that’s fine, but their life is still going to be better by having these check-in conversations much more frequently than just trusting an annual review with an HR rep to do that.

Peter: I imagine it depends on who HR reports into. There’s companies where HR reports into the CEO, there’s companies where HR reports into the CFO, and there’s companies where HR reports into legal. I imagine if HR is reporting into legal, it’s much harder to give up some of that paperwork than if the HR reporting to the CEO.

David: The irony there, I mean, you’re exactly right on performance evaluations, the irony there is that sometimes that can steer people astray. To jump back to transparency, right? There are some legal scholars who read the National Labor Relations Act as essentially advocating for transparency and making anything that makes it less transparent possibly illegal in the United States. Again, not legal advice, not a lawyer, telling you what other legal scholars say. But, interesting because what you find is that the more paperwork oriented, make sure every box is checked people, are more likely to advocate for the transparency piece because they’re fearing a freak out, and a lawsuit, and all that sort of stuff, all the while possibly stumbling into one on the other side, right? You’re right, it’s interesting to see how different … It’s not to say that every practice in the book works only if HR is going right to the CEO, everyone kind of works differently depending on who they report to. Now, that said, I still advocate that HR have that seat at the table, especially when it comes to things like performance reviews because those feed into succession planning and that feeds into the next generation of leadership.

Peter: To what extent do you think you can do some of these things unilaterally? I’m thinking about the story you tell, Daimler’s vacation email policy, which I really loved, which is if you’re on vacation, every email that gets sent to you gets deleted. You just have an email responder saying, “If you’ve emailed this person, it’s not going to get to them. If you want them, you’ve got to email them again when they come back on vacation.” That might be something that the organization doesn’t institute, but you think as an individual, “I would love to do that. I would love to come back after vacation and not look at 500 emails in my email account.” Have you seen instances where individuals could effectively, diplomatically do some of these things without the organization making it a policy?

David: Yeah, so it really varies on the company and on the particular practice. Email is actually one where I think you really can. You might not be able to do the Daimler system where it’s all automatic, but you really could have … The best term to describe it is as a middle manager or frontline manager you can create a pocket of excellence where you’re starting to play around with these ideas. Email’s a great example because what I actually think is the best place to start on email is just having a conversation about, “What are the ways it helps? What are the ways it hurts? Let’s eliminate the ways that it’s hurting.” If that’s vacation, awesome.

I suspect for most people, if you really had to weigh between the Daimler unlimited vacation policy and the Volkswagen, and other companies are doing this now too, of the, “We’re going to shut off the email servers at night so we’re not bugging you.” I think most people would actually take that. I’ll deal with the influx of emails when I get back from vacation, but what I want is a night with my family or loved ones, friends, et cetera. But again, it depends on the company and the manager, but I do think some of these, especially the ones that have nothing to do with legal circumstances, it’s possible to start it in your little pocket of excellence and hopefully it grows from there.

Peter: I’m smiling because I’m thinking at a certain point if you create a new email policy for yourself that says, “Don’t email me when I’m not here,” and then you jump into the unlimited vacation policy, so you’re on vacation … At a certain point you’re just no longer working. But I think what you’re saying, which is really important and a lesson, which is that people are trustworthy, that ultimately you will have some people who abuse it, that’s by definition going to happen. But for the most part, people are reasonable and people are trustworthy. In some ways, if you don’t trust people, and you want to trust people, it seems like a good practice is to start opening up some of these trusting policies and then letting people fulfill the expectation that they can actually be trusted.

David: Yeah, and I think too, and this is one of those things that I didn’t realize until the book was out and I was gaging the initial reactions, these are mostly policies of elimination. It’s not about how do you add it on to your company, almost all of them came about from seeing the way we were doing business now as blocking employees ability to do their best work. Now whether that’s because they’re not given enough downtime like the email thing, or whether that’s because there’s all sorts of animosity because nobody knows the pay system is fair, et cetera. Most of these practices came into being, not all, but most came into being by managers and senior leaders going, “You know what? This is the way we’ve always done it, but I sense that it’s actually blocking people’s potential. What happens if we remove it?”

That’s really the challenge, whether you implement any of the 13 that are in this book or none of the 13, I think the big lesson for any individual manager to take back is what are the practices and procedures right now that are blocking my people’s best work and how can I fight to eliminate those, whatever they may be? You’re going to end up with a better workplace, again, if you can trust them to do their best work, which should have been a prerequisite for hiring them and building that team anyway.

Peter: A final question David is after all of this research, how have your findings, and your writing, and your thinking about this impacted your life personally? How have you changed how you do things, if at all, based on what you’ve seen is happening out there in the market?

David: Yeah. I mean personally actually, I had almost a 180 degree turn on the salary transparency piece. When I started researching that, I was very much the like, “This is private information. Blah, blah, blah, blah, blah.” The mentality piece for me, that was a huge change. The biggest kind of individual thing, to go back to the emails chapter and the idea of it being much more of a cost than it is a benefit in most of our lives, is in attempting to practice what I preached, I stumbled across a system where now I have … I don’t know if I can show them to you, I don’t know where they are, but now I have a system where I have a phone and I have an iPad. They have most of the same stuff on them except the iPad doesn’t have anything that’s work related. For me, as an author, that includes social media because for me that’s really actually more work related, other than I have one private, really hard to find Facebook account, but all of the other social media accounts I count as part of my job as an author, thinker, et cetera.

When I get home or if I’m working from home, when I go upstairs to where our home life is, I switch devices. It’s my way of doing the no email on evening and weekends thing, is I literally have the device. It’s actually all the way in our bathroom, which is on the other side of the house so that if I wanted to check my email, I still can and I can hear it if it rings and it’s an emergency, but mostly it’s that subtle reminder that there is a line between work and home life. If I want to be my best at work, the first thing I should do is recognize that I need to be my best at home, and resting, and doing the reasons we work anyway, which is to have a better life to enjoy with our family, friends, loved ones, et cetera.

Peter: David Burkus, the book is Under New Management: How Leading Organizations Are Upending Business As Usual. David, it’s such a pleasure to have this conversation with you, thanks so much for being on the Bregman Leadership Podcast.

David: Oh, thank you again so much for having me.

Peter: If you enjoyed this episode of the Bregman Leadership Podcast, please subscribe and leave a review on iTunes. For more information about the Bregman Leadership Intensive, as well as access to my articles, videos, and podcasts, visit PeterBregman.com. Thank you to Claire Marshall for producing this episode and to Brian Wood who created our music. Thanks for listening and stay tuned for the next great conversation.