Working Paper Series 2017/64/EFE

A Tale of Two : Creating the Authentizotic

Manfred F. R. Kets de Vries INSEAD, [email protected]

Starting with an example of organizational “hell” and “heaven”, this article describes the authentizotic organization, the kind where people find meaning in, and are captivated by, their work. These organizations have C4 in their DNA: its participants engage in courageous conversations embedded within a coaching culture. The foundation for developing authentizotic organizations is trust. Trusted executives make a great effort to establish an organizational culture in which people feel safe and are comfortable in having voice and using it. I introduce an intervention methodology that incorporates the clinical paradigm, the psychodynamic- systemic lens that provides insight into people’s inner theater and underlying motivations. By incorporating these psychodynamic processes, key developmental areas can be identified that may block the creation of authentizotic organizations. Multi-party feedback instruments can be used to illuminate the gap between self-perception and the perceptions of others. I suggest that a safe transitional space needs to be created that enables people “to play” and discuss the organization’s “undiscussables.” Another helpful intervention is to have the organization’s key players engage in illuminative cathartic experiences through narrative. This can help create a mutually supportive organizational community and an organizational culture in which people give their best.

Key words: Authentizotic organization; best place to work; clinical paradigm; trust; multi-party feedback systems; transitional space; narrative.

Electronic copy available at: http://ssrn.com/abstract=3045179

A Working Paper is the author’s intellectual property. It is intended as a means to promote research to interested readers. Its content should not be copied or hosted on any server without written permission from [email protected] Find more INSEAD papers at https://www.insead.edu/faculty-research/research

If you want to build a high performance organization, you’ve got to play chess, not checkers.—Mark Miller

There’s no magic formula for a great company culture. The key is just to treat your staff how you would like to be treated.—Richard Branson

Introduction

The CEO of XYZ was known as a suspicious control freak. He had placed a number of so-called “internal consultants” on his payroll to keep him informed of the goings-on in the organization. Some people described the work environment as a

Darwinian “soup” in which everyone was out for themselves. Information was power, secrecy was the norm, transparency was absent, and teamwork was non-existent. The company’s paranoid culture was perhaps best illustrated by the fact that the CEO had forced all of his top managers to pre-sign resignation letters. Executives could be fired on the spot for the slightest transgression. Many of the people who worked there knew of colleagues who had been fired by email. The CEO underpaid everyone who worked for him, except himself. Furthermore, he expected all of them to be on call, any time, any day of the week, weekends included. At meetings, he frequently subjected his executives to abusive, even profane tirades. During these public sessions, he made it quite clear that all the successes in the organization were entirely due to his efforts. If all that wasn’t enough, he was also notorious for his numerous affairs with his assistants. Everyone knew that refusing his advances marked the end of that person’s career.

1

This toxic work environment was eventually ended by a legal challenge from one of the company’s major institutional investors, coupled with negative media coverage.

Following investigation by the authorities, the CEO served time in prison for draining money out of the company for personal use, behavior that brought the company to the brink of bankruptcy.

The ZYX Corporation was a complete contrast. Here, great efforts were made to ensure that everyone in the organization was aligned behind its values, mission, and vision, that they were all on the same page, and that they were committed to working toward common goals. The company was considered a great place to work, and most hiring was done by word-of-mouth. Employee was very low. Because of the attention paid to selection and people development, dismissal from the company was seen as a last resort. The company’s employees were proud of its culture, which offered mutual support, promoted trust, and provided them with meaning. Fair process was a given in all the company’s dealings. Not only were people paid decently, but they were also given excellent benefits. Furthermore, top management emphasized the importance of a team-working, coaching-oriented, people-centric culture. Collaboration, transparency, feedback, and information sharing were essential elements of the organization’s values. The company’s leadership encouraged everyone to have voice and to feel safe to speak up at meetings. They encouraged people to come up with new ideas and to fail forward by taking risks. The company’s pledge to enable organizational members to establish a good work-life

2 balance was not merely lip service; a good work-life balance was viewed as a critical factor in maintaining a committed and productive workforce. Finally, the company acted as a responsible corporate citizen to the community and the world at large.

The Authentizotic Organization

These two organizational profiles juxtapose the potential heaven and hell of organizational life, work environments that can range from awful to awesome. Much has been written on this subject but not much on how to get there. For many executives the million-dollar question is still how to create high-performing organizations that are also considered best places to work?

Although a slew of management books offer various formulas for achieving this, the fact that these books continue to be published suggests that their miraculous “cures” are not working out too well (Beer, 2009; De Waal, 2012; Hesselbein and Johnston,

2002; Holbech, 2005; Kotter, 2012; Lawler and Worley, 2006; Martin, 2012;

Tomlinson and Kierson, 2016; Ulrich, Huselid and Becker, 2001). Thus, at the risk of joining their number, I would like to make a few suggestions about how to create high- performing organizations that can be counted among best places to work. I call these organizations “authentizotic,” a term I coined from two Greek words, authentikos and zootikos, to identify the essential quality that makes them succeed. Applied to the , authentikos implies that the organization has a compelling, genuine, authentic quality. It means that the organization’s leadership has communicated clearly and convincingly not only the hows but also the whys of why people work,

3 embedding meaning in all its employees’ tasks and activities. It also refers to self- assertion in the workplace, creating a sense of effectiveness, competency, autonomy, initiative, and creativity. The term zootikos means “vital to life.” In an organizational context, it describes the way in which people are invigorated by their work and experience a sense of balance, commitment and completeness. In such organizations, the human need for exploration—closely associated with cognition and learning—is met (Kets de Vries, 2001; Kets de Vries and Balazs, 1999).

Authentizotic organizations also create the space for what I call C4. The four Cs describe work environments where people are encouraged to engage in courageous conversations embedded within a coaching culture. This sounds neat but in fact creating the conditions for these authentizotic organizations to develop and thrive can be an uphill struggle, because it requires us to overcome deeply rooted psychological resistance (Hirschhorn, 1990; Kets de Vries and Miller, 1984).

Regression leads to inauthenticity

The first essential step to creating authentizotic organizations is for people to have the courage to speak their mind. This is easier said than done. From a group dynamics point of view, we have to fight our tendency to idealize our leaders and view people in positions of power and authority as very special. This propensity is deeply embedded in the human psyche and can be explained in terms of our evolutionary and developmental (Kets de Vries, 2006).

4

From an evolutionary perspective, its origins may lie in the programming that ensured survival during the early days of Homo sapiens. Our Paleolithic forebears may have acquired an inbuilt tendency to submit themselves to the dominance of the leader of the tribe, particularly when faced with danger. Our disposition to regress into a dependency position surfaces rapidly in situations that evoke the kinds of experiences we had in infancy (Bion, 1998)—when we were small and relatively helpless, we were great believers in our parents’ all-powerfulness and omniscience.

These reactions are understandable; in the process of becoming an individual we identify with those whose competence we admire. This is a psychological dynamic in normal human development that we should have outgrown in adulthood. However, in crisis situations—when we are stressed or threatened—very little is needed to make us regress to almost innate patterns of dependency on strong people to guide us.

In organizational life, this tendency to regress makes us behave inauthentically.

Dependency reactions are ever-present (Bion, 1998). The need to voice critical opinion is overruled by the need to please. Mitigating these regressive patterns necessitates a considerable amount of psychological homework.

Developing trust

The obvious formula for having people speak their mind is trust. Trust is the glue that holds all relationships together. Most good relationships are built on trust and mutual respect. It’s the basic ingredient if we want to create authentizotic organizations. But

5 it takes time to create trust. It develops one day, one interaction, at a time

(Katzenbach and Smith, 2015; Kets de Vries, 2008; Kets de Vries et al., 2016). And given our paranoid inclinations, it doesn’t take much for feelings of trust to be lost and mutual suspicion to rise to the fore (Green and Phillips, 2004; Phillips et al.,

2003).

It should be borne in mind that the creation of a culture of trust starts at the top. Trust is earned when actions match words. We trust people who live and work with integrity. We trust leaders who are forthright, walk the talk, live up to their commitments and promises, and set an example. A critical factor in developing trust is consistency. As consistent leader reliably follows through what’s promised many times over an extended period.

It’s not only facts that matter in the development of trust; emotions are equally important. Leaders should be prepared to express emotions, always bearing in mind that trust is affected not only by the ability to express emotions, but also by the way emotions are expressed. Anger might have to be expressed but doing so aggressively is not a way to build trust.

To build trust, the people in charge of an organization need to make it clear that they appreciate, value, and acknowledge the efforts and contributions of the people they work with. Each individual’s work matters. Trusted leaders look at shared goals; they don’t just look out for number one (Kets de Vries, 2006; Schein, 1992).

6

In the interpersonal organizational “dance,” organizational leaders need to listen carefully to what their people have to say. And by listen I mean real, empathic listening, not pseudo-listening. Listening actively to other people means paying attention not only to the story, but also to the underlying meaning of the story, the language they use, the tone of voice, and how they use their body. It is equally important to listen out for what’s not being said. Furthermore, leaders should have sufficient psychological security to admit that they don’t have all the answers.

Creating a culture of voice and constructive feedback

In managing the organizational culture, trusted executives must set clear boundaries between acceptable and unacceptable behavior. Just as they do in childhood, boundaries help create feelings of safety throughout our life. Organizational leaders should strive to be inclusive and invite the people who work for them to have voice.

They should make it clear that disagreement is part of the creative process and that people can disagree. People need to feel safe to be comfortable speaking up in an organizational setting. If not, they may fear that disagreement could be interpreted as insubordination or that they will be seen as ignorant, incompetent, or a troublemaker, stirring up problems. In the same way, leaders should avoid creating a culture and present failures as great learning opportunities—not a case of “Off with your head!” All these concerns can be seen as legacies of childhood, evoking memories of interactions with authority figures, being made fun off, or being put to . These

7 lingering childhood feelings make establishing and maintaining trust a delicate but indispensable task.

The clinical paradigm: a well-tested change intervention

From a psychological point of view, our challenge is how to overcome these feelings and create authentizotic organizations where people can be themselves and feel safe enough to give their best. To enable this to happen, I have created a well-tested intervention method to initiate and maintain a coaching culture. It’s a methodology that helps overcome people’s fear of the negative consequences of having courageous conversations—to talk about matters that really influence the effectiveness of the organization. This intervention technique builds trust, helps minimize fears of self- exposure, deals with concerns about reciprocity (or the lack of it), and deters lingering paranoid reactions.

People involved in creating authentizotic organizations should be aware that in organizational life there is more than meets the eye. To stimulate this awareness, I have introduced the concept of the clinical paradigm—a psychodynamic-systemic lens through which we can explore people’s inner theater or underlying motivations

(Kets de Vries, 2000; Kets de Vries and Cheak, 2014). Applying the clinical paradigm makes us aware of what lies beneath, and adds a deeper and more nuanced understanding to intra-personal, interpersonal, group, and organizational phenomena. Through this exploration, we discover a world of motivational forces, desires, fantasies, dreams, and daydreams, all representing forces that contribute to

8 the outer reality of decisions, actions and interactions. We become a kind of organizational detective, figuring out what is really going on, overtly and covertly.

Creating a coaching culture

The beginning of change starts with an honest look at what’s stopping a leader, and by extension an organization, from thriving. One way to identify key leadership development areas is through the use of multi-party feedback instrumentation, which assesses work life at an individual, team, and organizational level (Kets de Vries et al.,

2007). These instruments help show the gap between what’s desired, and the reality.

If these instruments are handled efficiently, the feedback they provide (which should be shared in a group setting) can become a forceful icebreaker and have a deep emotional impact. Feedback can also open ideas about how the organization and its people can change for the better. Exercises that touch on deeply felt emotional issues can also help to create the kind of transitional space that enables people “to play.”

From my own experiences with thousands of executives, more can be learned in short periods of “play” than in hours of presentations. Play releases the ability to start conversations that really matter—conversations that contribute to change.

When these intervention techniques are used in an organizational setting, various psychological dynamics come to the fore. For example, they can provide a context for cathartic experiences through narrative. To be able to tell a personal story with all its highs and lows to a group of people who listen respectfully can have a strong emotional impact. Talking about issues that bother us (instead of holding back

9 defensively) can be an extremely powerful and enlightening experience. Applying the clinical paradigm provides an opportunity to re-experience and transform deeply troubling or repetitive life themes, helping us to better understand why certain psychological issues keep holding us back and why we persist in dysfunctional behavioral patterns (Kets de Vries et al., 2016).

While listening to other people’s life stories, we may realize that we are not alone in our confusion. We may come to understand that others, too, struggle with similar problems. This “I am not alone” effect trigger a great sense of relief, making it easier to open up, connect with others, and build trust. Mutual identification with specific problems (including individual, team and organizational dynamics) also offers many opportunities to discuss alternative ways of dealing with them. There is great value in this vicarious learning. Encouraged by other group members, these reflections can push each participant to experiment with doing things differently and find ways to get unstuck. In the process of giving each other mutual support, they all become part of a mutual supportive community.

To get the best out of people, courageous explorations and conversations need to be part of organizational culture. Once this is the case, courageous conversations can be contagious, starting at the individual then team level and spreading broadly throughout the organization. Eventually, this constructive contamination will become integrated into the culture of the organization, so that it becomes a place that gives its people and activities meaning and purpose, a place that has C4 in its DNA.

10

11

References

Beer, M. (2009). High Commitment High Performance: How to Build A Resilient

Organization for Sustained Advantage. San Francisco: Jossey-Bass.

Bion, W. R. (1998). Experiences in Groups. Abingdon, Oxford: Routledge.

De Waal, A. (2012). What Makes a High Performance Organization: Five Factors of

Competitive Advantage That Apply Worldwide. Global Professional Publishing.

Green, M. J. and Phillips, M. L. (2004). Social threat perception and the evolution of paranoia, Neuroscience & Biobehavioral Reviews, 28: 333–42.

Hesselbein, F. and Johnston, R. (eds.) (2002). On High Performance Organizations: A

Leader-to-Leader Guide. San Francisco: Jossey-Bass.

Hirschhorn, L. (1990). The Workplace Within: Psychodynamics of Organizational Life.

Boston: MIT Press.

Holbech, L. (2005). The High Performance Organization, Abingdon, Oxford: Routledge.

Katzenbach, J. R. and Smith, D. K. (2015). The Wisdom of Teams: Creating the High-

Performance Organization, Boston: Harvard Business Review Press.

12

Kets de Vries, M. F. R. (2000). The Clinical Paradigm: Manfred Kets De Vries's

Reflections on Organizational Therapy, Academy of Management Executive, 14(1): 49–

51.

Kets de Vries, M. F. R. (2006). The Leader on the Couch, Chichester: Wiley.

Kets de Vries, M. F. R. (2008). Leadership Coaching and Organizational

Transformation: Effectiveness in a World of Paradoxes, INSEAD Research Papers,

2008/71/EFE.

Kets de Vries, M. F. R. and Miller, D. (1984). The Neurotic Organization. San Francisco:

Jossey-Bass.

Kets de Vries, M. F. R. and Balazs, K. (1999). Creating the “Authentizotic”

Organization: Corporate Transformation and its Vicissitudes—A Rejoinder,

Administration & Society, 31(2): 275–94.

Kets de Vries, M. F. R. (2001). Creating Authentizotic Organizations: Well-Functioning

Individuals in Vibrant Companies, Human Relations, 54(1),:101–11.

13

Kets de Vries, M. F. R., Vrignaud, P., Florent-Treacy, E. and Korotov, K. (2007). INSEAD

Global Leadership Centre—360-degree Feedback Instruments: An Overview, INSEAD

Research Papers, 2007/69/EFE.

Kets de Vries M. F. R., Korotov K., Florent-Treacy E., Rook C. (eds) (2016). Coach and Couch (2nd Edition). London: Palgrave Macmillan.

Kets de Vries, M. F. R. and Cheak, A. (2014). Psychodynamic Approach. In

Northouse, P. G. (ed.) Leadership: Theory and Practice (7th Edition), Thousand Oaks:

Sage.

Kotter, J. P. (2012). Leading Change (revised edition). Boston: Harvard Business

Review Press.

Lawler, E. and Worley, C. (2006). Built to Change: How to Achieve Sustained

Organizational Effectiveness. San Francisco: Jossey-Bass.

Martin, K. (2012). The Outstanding Organization: Generate Business Results by

Eliminating Chaos and Building the Foundation for Everyday Excellence. New York:

McGraw-Hill.

14

Phillips, M. L., Drevets, W. C., Rauch, S. L., and Lane R. (2003). Neurobiology of Emotion

Perception II: Implications for Major Psychiatric Disorders. Biological Psychiatry, 54:

515–28.

Schein, E. (1992). Organizational Culture and Leadership. San Francisco: Jossey-

Bass.

Tomlinson, G. and Kierson, M. (2016). Discovering Execution: The Key to High

Performance Organizations, North Carolina: Realization Press.

Ulrich, D., Huselid, M. E, and Becker, B. E. (2001). The HR Scorecard: Linking People,

Strategy, and Performance, Boston: Harvard Business Review Press.

15