Patterned Chaos in Human Resource Management

Three professionals — an architect, an accountant, and a human resource professional —were contemplating a profound existential question. What, besides the obvious, was the oldest profession?

The architect spoke first: “God created the world in six days, and that took a master design. So, obviously, architecture is the oldest profession.”

“Not at all,” replied the accountant. “You misunderstand what God really did. What He did in those six days was to create order out of chaos. And that is what accountants do, so accountancy is obviously the oldest profession.”

But the human resource professional had the last word: “And who do you think created the chaos?”

I would like to suggest that organizations need more chaos, at least the kind of patterned chaos that is described by the new science of that name. And further, most human resource professionals do not create enough of it.

I am not a mathematician, and I do not understand much about the underpinnings of the science of chaos. It is hard for me to imagine how scientists deal with such complex phenomena. But what has been written for the layman and portrayed on TV is quite compelling. Take, for example, the description given by the physicist Joseph Ford of the Georgia Institute of Technology, who was an early proponent and contributor to chaos theory. He talked about “dynamics freed at last from the shackles of order and predictability,” of “liberated systems” with “exciting variety, richness of choice, a cornucopia of opportunity.”1 This description comes close to my vision of the new organizational world.

One aspect of chaos theory that has particular resonance in current organizational concerns is popularly called the butterfly effect. This effect, more correctly known as sensitivity to initial conditions, refers to the phenomenon that a butterfly flapping its wings over Tokyo can affect New York weather some time hence. Similarly, small organizational decisions, often about highly circumscribed concerns, can have profound effects on larger problems that emerge considerably later — problems whose relevance to the initial decision is buried in the organization’s ordinary practices.

For example, engineering companies often hire many engineers at the beginning of a project, but when the project ends they are left with underutilized and demoralized employees. A possible solution is to hire more technicians. They can do some of the “engineering” work, and, when demand declines, their skills are more easily transferred to the ensuing maintenance jobs. One company, when confronted with this “obvious” solution, resisted its implementation. It took a while to establish that the resistance stemmed from a compensation decision made long before. At that time, trying to determine the proper incentive system for its engineering managers, the company decided to base their compensation, in part, on the number of engineers — not technicians — that reported to them!

A second example comes from a company that set its professional salaries by benchmarking against other companies in the same geographical area. Salaries are often set this way, and, of course, consulting firms make good money providing the benchmarking data. But the company also wanted to attract the best people it could by being the employer of choice. So it decided to provide overtime pay for its exempt employees up to a certain level. This financial incentive complemented the company’s cultural dynamic that time spent at work was an indicator of commitment and high performance. But then the economy changed, and the company had to introduce cost-cutting measures, one of which was to reduce the amount of overtime. Still, certain tasks occasionally required extra work. What could the company do? It might have allowed employees to adapt their hours to fit the needs of the work, putting in more or less time when necessary, so that their hours would balance out in the end. But the company had another policy, evolved for very different reasons, that prohibited “comp time,” that is, conversion of overtime into time off. This early decision had significant repercussions in a changed environment.

These examples show how embedded practice can constrain innovation in an organization’s relationship to its employees. But let’s step back and ask why such innovation is so necessary today in most organizations. Why do we need a new organizational vision? Why do we hear so much talk of organizational transformation, even organizational revolution?

Most of this concern stems from economic fear, from worry about U.S. productivity and foreign competition. But equally important are other new forces. More diverse family patterns are emerging in this country, and the younger generations have new and more varied values. What is problematic is that these two forces — the international economic situation and domestic demographic and life-style changes — lead to mutually contradictory responses. Companies try to increase productivity through cost-cutting and downsizing, which polarize the workforce: some people are under- or unemployed and others are completely overworked.2 Recent demographic and life-style changes, however, call for a middle ground in which more people work but on reduced schedules. This solution seems peculiarly difficult for U.S. companies to accept. They find it culturally easier to provide day care, even sick child care, than to provide time and space for professionals to combine their commitment to work with their commitment to their private concerns.

Why should this be so? For one thing, U.S. companies have certain responsibilities — for social security and health insurance — that make part-time workers expensive. If a $100,000 job is held by one professional, the company pays social security tax on only half this salary. But if the same job is shared by two people, the company must pay this tax on the whole salary. Likewise, the company gets a greater return on health insurance costs if each covered employee does a greater proportion of the required work. In the short run, part-time work is economical for the organization only if it implies low wages and restricted benefits — not exactly the picture that most of us have in mind when we consider alternative ways of working.

But there are deeper, more complex reasons than these “simple” economic ones that account for the reluctance of U.S. companies to deviate from traditional employee practices. One reason is the myth of management control and the corresponding assumption that responsibility can’t be shared. Managers are in the peculiar position of being held responsible for work they do not do. Their response, traditionally, has been to keep a tight control over the people who do do the work. Managers want their subordinates to be in sight, to be available at all times, and to be loyal and committed above all else to work. These are understandable responses, given the manager’s position, but we all know that they actually defeat the goals they are intended to meet. People who feel controlled and mistrusted do not do their best work. That’s why we hear so much talk about the multi-skilled workforce, the use of teams, and the elimination of management layers. These changes are attempts to increase productivity by empowering the people who actually do the work and by shifting managerial attitudes from control to trust.

The effects of such changes are often dramatic. I compared a group of home-based systems developers, many of them working part time, with an equivalent full-time group that was office based. The home-based employees were more involved with their work, more experienced, and more eager and willing to learn new skills. They were also more loyal to their organization, less involved in careerism, and less likely to expect to leave in order to start their own enterprises.3

Yet such alternatives as reducing schedules for organizational professionals or shifting the location of work between office and home are highly resisted by most managers and, indeed, by many employees. They fly in the face of entrenched career procedures, which evolved when the professional workforce consisted primarily of people who had full-time family support at home and therefore could — indeed were expected to — give complete priority to their work and their careers. We all know what these procedures entail. They put heavy emphasis on the early years of the career — you either prove yourself early or you won’t get ahead. To prove yourself during this time you have to be visible; you have to be perceived as putting all your effort into your work; and you have to indicate your desire and willingness to accede to company demands.

These procedures are based on the assumptions that work is everyone’s prime priority and that everyone plans on long-term career continuity. And it is these assumptions that have made life so difficult for the increasing number of women who have moved into the professional workforce as well as for the many men whose lives no longer fit into the traditional mold.

To accommodate the different ways of living with work, organizations should take a more chaotic approach to their employees. I realize that this suggestion flies in the face of a number of forces that support a more structured, controlled, and orderly system. Among these forces, ironically, are the very human resource systems that have been put into place to ensure lack of discrimination. Because of the threat of litigation, the fear of setting a precedent, and the erroneous belief that the only way to be fair is to assume that everyone is exactly alike and therefore has to be treated exactly equally, human resource professionals have actually created less chaos than might be optimal.

A good example of someone who got caught up in these assumptions is Doris. Her story came out of a series of networked interviews with MBA graduates, their spouses, their bosses, and their work colleagues.4 After receiving her MBA, Doris joined a progressive high-technology firm that followed the tenets of the new high-commitment organization. It prided itself on its flexibility in dealing with employees. Doris was immediately successful and received a number of commendations. Her work attracted the attention of an up-and-coming manager, and he enticed her to join his unit. However, as is customary in such an organization, he was shortly shifted to another part of the company, and he left her in the charge of one of the other managers. Not long after, this manager took maternity leave and arranged with her boss to work one day a week at home after her return. All of this was good news to Doris, who also wanted to have a child.

Doris soon became pregnant and arranged for her own maternity leave. She wanted to return to her unit, and her managers wanted her back. Her husband supported her plans to continue her career. It seemed an ideal situation in which to negotiate a flexible schedule. As her maternity leave drew to an end, Doris began to negotiate for some kind of project that would require twenty-four hours a week. Such a project was identified; in fact it was the continuation of a project she had already successfully handled. All agreed it could be done in twenty-four hours a week — but there was a catch. Her managers wanted to make sure that the work was her primary commitment. For example, they wanted to know if she would come in for a meeting if one was called. She asked them to schedule meetings for times when she was already planning on being in the office. She needed to set limits on her time in the office in order to better manage both her work and her baby. But her managers needed to be assured that Doris would continue to give work her top priority over all else. Eventually they drew up a letter that said that Doris would have to come to all meetings that were called and that the part-time arrangement could be canceled at any time if it seemed to be interfering in any way. This was an unheard of formality in this loose organization. Doris’s manager had had no such formal agreement with her boss when negotiating a more flexible schedule. But she was willing to assure her boss that work would come first, despite the arrival of her baby. Flexibility was possible only if this show of primary commitment was made. But this was not what flexibility and accommodation to employee concerns meant to Doris, and so she quit.

What this story reveals is that in Doris’s company, and indeed in most U.S. companies, work quality is not in itself a sufficient condition for high performance. Something else is required: proof that no matter what, the needs of the work always come first. Many companies require employees to prove their commitment by working long hours. But when long hours are not possible — as when an individual needs a different, more flexible schedule — the requirement nonetheless remains. In such a case, the willingness to shift one’s private schedule whenever the organization demands, even when those demands seem capricious, provides the necessary “proof” of the required attitude.

Thus, in order to meet the needs of the changing workforce without sacrificing the competitive needs of U.S. industry, we must reevaluate the meanings of time and commitment in the workplace. This is the first principle in my vision of a chaotic organizational system (see Figure 1). The output of complex, professional work is hard to specify, and it is hard to identify it with the efforts of one particular person. So we fall back on proxy indicators. If we can’t know precisely the quality of a person’s work — or we can’t know it soon enough — we can at least know the level of his or her commitment. And we can measure people’s commitment levels by the amount of time they are willing to give to their jobs and by the priority of work in their lives. Indeed, in a number of “how to” books on managing commitment, this is exactly the definition that is given. One states that a key “characteristic that we associate with committed employees is their willingness to make personal sacrifices to reach their team’s or organization’s goals.”5

Time, in its new meaning, should be less closely tied to cultural expectations and more closely linked to task. What we want is for our people to work smart, not long hours. That may mean that long hours become a sign of inefficiency rather than of committed performance. Jack Welch, the CEO of General Electric, is reported to have said that anyone who cannot do the job in forty hours is inefficient. We have to make a similar reevaluation of the meaning of commitment, defining it not in terms of time or loyalty but as taking responsibility for tasks in relation to organizational goals. Doris was willing to take such responsibility and was sure she could do it along with meeting the demands of her newly expanded family. But this was not enough in a culture where commitment went beyond task and constituted also a substitute form of control by the organization over its employees.

The second principle of this envisioned world requires testing and rethinking the assumptions on which the current career system is based. Three such revisions seem to me to be particularly critical. The first concerns the assumption of career continuity (which is in jeopardy anyway because of the recent spate of downsizings and layoffs). As I have already suggested, employers expect employees, particularly in the early career years, to put work above all else. But doing so may have serious repercussions down the road. Symptoms of the dangers of this assumption include burnout, plateaued careers, accumulation of “dead wood,” and mid-life crises. Although these maladies are often seen as residing in individuals, it is actually the traditional career structure that contributes to these outcomes.

A new assumption of discontinuity, in contrast, would seem to be more effective in the long run. Organizations and employees would negotiate to divide careers into independent segments, each segment with its own distribution of commitments between work and other aspects of life. Low-commitment work segments would be judged differently from high-commitment segments, and they would involve different portfolios of tasks with different reward levels. Significantly, a period of some withdrawal from work would not be considered evidence of failure or of an inability to be productive; it would not be a blemish that would stay with the employee for the rest of his or her career. Nor should periods of low commitment reduce the effectiveness of organizations, because there are many organizational tasks that could be accomplished by employees in such a period. There is always work that is less visible, more circumscribed, perhaps less complex, that could be allocated to these workers. What is critical is that evaluation not be the same for these tasks as for those requiring greater employee investment of time and energy; evaluation must be relevant to the actual requirements of the tasks being performed.

The second assumption in need of reconsideration is the myth of uniformity, that is, the belief that employees can be handled identically. Employees, even in the same positions, bring with them very different needs and orientations. Further, as decades of research have shown, differences also vary over any given person’s life span. Therefore, we need a system that responds to variety. Organizations must provide multiple career paths that are responsive to this ever-increasing diversity. Naturally, they must take care that such individualized paths are truly individual and do not turn into assignments based on stereotyped expectations about people’s abilities or circumstances. In other words, we need a more chaotic situation than we currently have, in which the needs of tasks intersect with the needs of the people who perform them.

The third assumption, then, involves this intersection. The present system is based on matching people to carefully defined jobs and to all the presumed work requirements that have become attached to these jobs. I suggest that we need to allow people more flexibility to define for themselves how to do the necessary work. Some of this is happening already as companies try to become more innovative and adaptable. However, many of these modifications in work process don’t allow employees discretion over the timing and location of work. Companies need to provide more opportunities for employees to design their own jobs, guided by both their individual needs and the needs of the tasks.

A final principle of this new world, which is congruent with the first two principles, relates to the boundaries between an employee and an organization and between a person’s public and private life. As I’ve said, our current processes assume that the employee is closely tied to the employing organization’s demands; that is, work must come first, organizational demands must be met. Hence there is assumed to be a clear separation between the person as worker and the person at home. I suggest that we need to loosen the link between organization and employee and thus to allow a closer linking of public and private life.

An example occurs in the management of fast food stores. An interesting study compared those stores that were franchised and managed by individual owners with those that were wholly owned by the central company and managed by one of its employees.6 The latter case represents the typical link between employer and organization, whereas the franchise represents a looser link. The study found that central companies had a harder time controlling their franchisees, as one might expect. For example, when Pizza Hut decided to include evening delivery in its services, one franchisee refused because he did not want to spend his evenings working. He had that option as a franchisee, whereas an employee manager did not. The company, naturally, found such individuality problematic. But the study found another difference between the two employment relationships, this one in the area of innovation. The central control imposed on the employee manager did not provide a favorable atmosphere for new ideas. Most innovations came not from the wholly owned outlets but from the franchises. The Egg McMuffin, for example, was a franchise idea. This indicates that loosening the links between the organization and the employee may help both sides.

These then are the principles of a more chaotic, but nonetheless patterned way of thinking about personnel issues in organizations. They represent a different vision of the organizational world, which I believe would help both companies and employees. And they seem to fit better the conditions we currently face. They represent work organized by task rather than by time, based on trust more than on hierarchical control, and permitting a different — more integrated, less segmented — relationship between an employee’s work life and private life.

So far I have considered organizational employees, who are subject to regulations they do not control. But what about entrepreneurs? Certainly people who start their own businesses should exhibit a greater variety of ways to organize their work lives. Indeed, in the data from our study of business school graduates, we have found two styles of entrepreneurship.7 The differences between them are exemplified by the choices of Karen and Bill.

Karen and Bill received their MBAs from the same school in 1979. For several years after graduation, their paths were almost identical. Both of them began in a prestigious, high-profile corporate position and moved on to a venture capital start-up a few years later. In both cases, the venture capital concerns failed to take root. At that point, Karen launched a consulting company combining her experience and expertise in biotech and computers; Bill opened the doors of his own investment company. Along the way, each of them married and began having children.

At this point, their lives became significantly different. Karen’s decision to strike out on her own came as a result of a reevaluation of her aspirations and priorities: “Five years ago, I wanted to be a power player and run something. Now, I don’t care about the fast track. I just want an interesting way to make money and stay flexible with my time.” Bill, in contrast, gave the following three reasons for becoming an entrepreneur: “(1) dissatisfaction with corporate life and management; (2) identification of a significant business opportunity; and (3) need to get wealthy.”

Karen feels that her work is well respected and that she could generate more income if she so desired. However, she is not willing to invest all of her time in the work. Bill, driven by the desire to build a successful business from scratch, works long hours and travels extensively.

Karen sees her work as a complement to the rest of her life. She has traveled extensively for pleasure in the past five years, and, at the time of our survey, she was taking six months off to stay with her new baby. Karen feels that her relationship with her husband, a software developer and consultant, has facilitated her progress in her career. She feels that their respective careers have allowed them the money and time to pursue their personal interests together. Karen names her husband as her primary source of emotional support and says that she has no problems with stress whatsoever.

For Bill, in contrast, it seems that other claims on his emotional or temporal energy create stress. They limit his ability to invest all in the new venture. He characterizes his relationship with his wife as a “constraint” on his progress at work; he also includes “presence of a two-year-old son” in the list of constraints. He says his wife, a business student, “has deferred to [his] career goals and resents it.” Asked who provides support when problems arise, he responds “no real support.”

Although Karen and Bill began their careers on parallel tracks, ten years after their graduation from business school they are living very different lives. They have both chosen to strike out on their own, to design and create their own professional opportunities. What is different is the degree to which they have decided to design their work around their personal and family lives. Bill’s goals are rooted outside his home, in the marketplace and its monetary rewards. Karen’s goals are centered within her home, in her own interests and the interests she shares with her husband. Their work lives appear to reflect these very different aspirations.

For both men and women, entrepreneurship is a way out of the dilemmas created by large bureaucratic organizations. But they seem to do it differently. Men often create situations that increase the personal pressures on them — even as they gain a sense of autonomy —whereas women use this route to integrate their lives. Two-thirds of the female entrepreneurs in our study structured their enterprises around their personal lives and said that their organizations fit their personality. Only 15 percent of the male entrepreneurs gave this response, and fully three-fifths said they have had to modify their behavior either some or a lot to fit into their own organizations.

I am not suggesting that this distinction reflects an essential difference between the sexes. Rather, it reflects a construction of the world of work based on the assumption that professional employees can give their all to work because someone else is taking care of nonwork concerns. This construction evolved at a time when caretaking responsibilities were the domain of people —women — who were not also involved in paid employment. As demographics and lifestyles have changed, so must this view of the world of work change. Under current conditions, such a worldview forces women to meld employment with caretaking and denies men the possibility of doing the same.

We tend to think that the excessive time demands of organizations reflect only the requirements of work, whereas in actuality, it seems likely that these demands also serve the purpose of measuring individual worth when performance criteria are difficult or impossible to specify. Traditionally, high performance is gauged by a commitment to work that is demonstrated by time and visibility. But the world is changing, and organizations will have to learn to respond more flexibly to their employees. Such individual flexibility may appear chaotic. One hopes, however, that it will be as constrained, as orderly, and as beautiful as the “chaotic” patterns portrayed by the new science of chaos. And if it provides the “exciting variety, richness of choice, and cornucopia of opportunity” that is associated with that science, we will all be the beneficiaries.