Category Archives: structure drives behaviour

Structures Drive Poor Financial Adviser Behaviour

A recent ASIC Report that identified an “Unacceptable level of failure” by the life insurance industry was caused by conscious or unconscious systemic structures that drove the behaviour of the Financial Advisers.

Gary Ryan, Organisations That Matter, Yes For SuccessThe report goes on to say, “Our surveillance results indicate that many advisers . . . may prioritise their own interests in earning commission income ahead of the interests of the client in getting good quality advice.”

Systems Thinking teaches us that organisational structures (rules, policies, procedures and physical structures such as office layouts) influence the behaviour of the humans who operate in that system. The concept is known as Structures Drive Behaviour.

The ASIC Report found that the system provides upfront commissions for Financial Advisers in 82% of cases. The commissions could amount to around 100% of the annual premium and are therefore very lucrative. Unfortunately ASIC has discovered that 96% of the poor advice provided by Financial Advisers was when the adviser was being paid an upfront commission. There appears to be a direct link between the structure of upfront commissions and the provision of poor advice.

Leaders have a responsibility for understanding the behaviours that their structures will drive. I am not saying the leaders in the life insurance industry here in Australia understood the consequences of the structures they put in place because I don’t know.

However, as part of the characteristic of foresight, a leader should consider the intended and unintended consequences of the rules, policies and procedures that they put in place. If you work in a sales environment and you want your sales team members to share information with each other, a commission structures that is 100% based on individual performance is unlikely to drive the sort of information sharing behaviour that you desire. Instead you need to create a system (with input from your sales team members) that provides commissions for both individual and team based behaviours and performance.

Creating a service counter that is only wide enough for one person will create queues. In turn these can block thoroughfares. If you don’t want these consequences then you have to consider how you can physically design and staff your service counter to minimise queues, or you need to design a queuing system that will reduce the clogging of your thoroughfare.

A common error that leaders make is when their team members behave or perform in ways that the leader doesn’t like, the leader blames their people. Systems Thinking teaches a different perspective.

First review the structures that might be causing the behaviours and/or performance results that you don’t like. You can identify when a systemic structure is operating when you have different people come in and out of a system but the behaviours and/or performance outcomes remain the same. Often (but not always) changes to your rules, policies, procedures and/or physical structures will change the behaviours and poor performance results that you are seeing.

Of course, humans are humans and it is possible to have the best possible structures in place and humans can choose to ignore them and do their own thing. But this is a rarity compared to a norm.

If you are experiencing poor behaviour and/or performance results from your team, consider assessing the systemic structures that may be influencing these outcomes before blaming your people. After all, who wants to end up being named in a government report for leading an industry that generates poor outcomes for its customers?

Learn how structures drive development – an example from karate

One of our close friends had invited our family to watch their 10 year old son Joshua complete his grading for his Black Belt in karate. Having been training in karate since he was six years old this was a ‘Big Occasion’ for him.

A crowd of over 200 people had assembled in the local karate club’s hall to support children from the age of nine through to 14 complete the requirements for their various Black Belt or First Dan assessments. The formworks and kata were performed to perfection to the delight of everyone. This was followed by various fighting stick assessments, jumping and tumbling kicks & strikes, a nun-chuka formwork and finally wood breaking strikes. Considering the ages of the children their performances were very, very impressive!

Finally, six of the boys and girls who were also being assessed for a special leadership award (which is specific to this club) took it in turns to perform a speech about leadership. As each child gave their speech on their own in the middle of the gymnasium floor, no notes in hand, a structure for their speeches became apparent. The structure was:
1) Introduce yourself and your age
2) Identify your favourite karate activity
3) Name a high profile leader of your choice
4) Provide a ‘key-point’ history of your leader
5) Share a quote created by the leader
6) Explain how the quote relates to your own personal circumstances
7) Thank your parents for their support
8) Thank the audience

While I had been highly impressed by the various karate demonstrations, I was astounded by the performances of these six children. It was clear that they all had different personalities yet each of them was able to stand up in front of a crowd of predominantly adults and provide their speeches. One of the children spoke about Ghandi and provided great detail as he shared an accurate account (including dates) of Ghandi’s life. This boy was nine years old!

It was also interesting to watch each of the children stumble at some point in their speeches. When this happened, each of them drew a long slow breath, gathered their thoughts and then continued with their speech. Imagine the pressure that could have been mounting and the ‘self-talk’ that could have been going on in their heads. Yet they remained focussed and completed the task at hand. It seemed to me that the children had been well taught with regard to the structure that they should follow in providing their speeches, including what to do when they lost their train of thought. It really was a delight to watch.

To me the high level of performance that the children were able to achieve was due to a clear structure that they had been provided in preparing for their speeches. No doubt each of the children had also practiced and practiced this structure, much like they had practiced their kata and formworks. Imagine the confidence that these children will have in their lives going forward. Many adults would run away as fast as possible rather than provide a speech in front of 200 hundred people. Yet these children did it and did it well. They will have that experience to draw on for the rest of their lives. As each child finished their speech the applause sounded like it was coming from 1,000 people and not just 200. It really was extraordinary to witness!

This experience once again highlights the power of having structures to support the outcomes that you desire. While the structures that the children used for their speeches may appear simple on the surface, their importance is no less valuable. What similar examples do you have where a clear structure has supported your own or someone else’s development? What stories are you willing to share with our community? What key lesson stood out for you from your experience?

Gary Ryan enables individuals, teams and organisations to matter.
Visit Gary at http://garyryans.com

US Postal Service decline highlights why Systems Thinking is critical

‘Systems Thinking’ is a critical leadership skill according to research by the Australian Government that included the Australian Chamber of Commerce and Industry (ACCI) and the Business Council of Australia (BCA). Yet Systems Thinking is only taught in two of Australia’s universities – Monash University and the University of Queensland.

According to a US Government report, The US Postal Service is in peril. In simple business terms its expenses consistently outweigh its income and the gap is getting wider, not smaller.

When the researchers asked for the organisations 10 year plan none was forthcoming. Let’s put the size of this organisation into some perspective. It has 571,566 employees. Imagine the economic and social impact if the US Postal Service was to shut down.

I share this example because it highlights the importance of Systems Thinking. In simple terms Systems Thinking is about understand how everything is connected, that the world does not operate in straight lines and that all systems have limits.

Systems Thinking also teaches us that small changes in one part of a system can have an enormous affect on other parts of the system. We only have to consider our global financial markets to see how this occurs on a daily basis.

In terms of the US Postal Service rather than being proactive regarding significant systemic changes, such as email, they have been reactive. As an example they have consistently relied on ‘First-Class’ mail to subsidise their losses from traditional mail services. Yet their ‘First-Class’ services have been declining at an alarming rate over the past 6 years.

With no plan in place or capacity to ‘see what was coming’ the US Postal Service leaders have failed.
In terms of your development as a leader it is critical that you expose yourself to learning about Systems Thinking, even if you have to lead your own development on this topic. It is one of the reasons I included two chapters specifically on Systems Thinking topics in my book What Really Matters For Young Professionals!
As a start, you might like to review the articles that I have posted on this topic over time. You can access the articles here and here.

Gary Ryan enables individuals, teams and organisations to matter.
Visit Gary at http://garyryans.com

How goals, structure and patience combine to create the results you desire

Gary uses the experience of his five year old son learning how to ride a bicycle as a metaphor for leaders. Goals, strcutures and patience can combine to create the success that you desire.

Learning to ride a bicycle acts as a metaphor for leaders

“You’re doing it, you’re doing it! Well done son, you can ride your two-wheel bike. Woo hoo!”, I called with delight.

“Yeah! I can go for a run with you now Dad!”, called back my five year old son.

My son has had a goal to ride his bike without its training wheels so that he would be able to go on a run with me. For nearly his entire life his older brother and then his older sister have been going for a run with me (they ride their bikes while I run). Since he was three my five year old son has asked, “Can I come too?”. “Yes, when you can ride on two wheels” has been my response.

Achieving this goal has required re-enforcement, a clear structure and patience. The re-enforcement of the goal has occurred everytime my son asked if he could come on the run with me. The structure has been the rule that in order to ride his bike while I go running, he must be able to ride on two wheels.

Patience has been present while I have waited for him to want to practice riding on two wheels.
After he would ask if he could come on a run with me I would ask, “Would you like to practice now? I’m happy to practice with you before I go on my run.”

Honestly, I don’t know how many times I asked that question over the past two years only to hear, “Hmmm, not really. Maybe another day.”

I would always respond with a re-enforcement of his goal. “That’s okay. Just remember that if you want to come on a run with Daddy, then you have to be able to ride your bike without your training wheels.”

I had learnt with his two older siblings that as soon as they were the ones motivated to want to practice, then five days in a row of practice would guarantee success. I regularly reminded my son about this structure as well. “When you decide that you are ready, we just need five days in a row of practice and you’ll be able to ride your bike!”

As it happened he only needed three days! He was the one who said to me, “Come on Dad, I want to be able to ride my bike. I really want to go on a run with you!”. Broom stick in hand (which is a tool that I jam in behind the bike seat so that I can walk behind the bicycle and assist with balance), pedals off (turning the bicycle into a scooter which makes it easier and safer to learn how to balance) we went out into our street to practice. About 15 minutes each day was all that was required.

The goal and structures were easy to create. Maintaining patience was the most challenging part of this process. Not from his perspective, but from mine!

Relating this experience to leadership in the workplace
This is very similar to what often occurs in the workplace. Many leaders expect that the new structures that they implement will produce immediate results. Time delays are inevitable when change takes place. Performance may not improve, yet ‘time is ticking’. Unfortunately this results in many leaders not persisting with good programs and structures. Instead, they declare that the current structure ‘obviously doesn’t work’, so they switch to something else. This creates a cycle of changing structures that produce no measurable performance improvements over time.

A simple example of this relates to the concept of using conversation starters (see How to stimulate conversations that matter) to create ‘conversations that matter’. The goal may be to create a strong sense of the organisation’s values on a day to day level at work. The structure may be that the leader provides an example of the values in action as a hand-out to read before a team meeting. The meeting agenda may also include a section on ‘Our values’.

When the first meeting is held the leader asks, “What were your responses to the story in the hand-out?”. Silence. The leader shifts uncomfortably in their seat. The silence continues. So the leader quickly moves on to another agenda item.

After the meeting the leader declares, “Well, that conversation starter stuff certainly didn’t work! I’ll never do that again.” Leaders often do the same thing when it comes to creating team ground rules for the first time. Sound familiar?

Just because a new structure doesn’t produce immediate results when you try it, doesn’t mean that it won’t work. The important aspects to consider are:
1) Does the structure align with the goals that you are trying to create?
2) What leadership skills are necessary to support the structure?
3) How will those skills be developed?
4) What was learned each time the structure was practiced?

As you develop your leadership skills and learn which structures are most likely to produce the results that you desire, it is amazing how you can also learn how to combine goals, structures and patience to maintain focus even when performance doesn’t appear to be improving. But when it all comes together, the performance improvement can be exponential, just like the seemingly fast performance improvement that my son displayed when he finally started to ride his two-wheel bike. While it seemed fast, the final performance improvement occurred as a result of patience over a long period of time, a clear goal and structures to support that goal becoming a reality.

When you understand the interplay between these variables you discover that, ‘slower is faster’. Maintaining patience in the face of zero performance improvement can eventually create a performance improvement that otherwise is unlikely to occur. Many leaders can become seduced by the ‘sense of speed’ that often comes with trying something new, which is why they keep changing structures without giving them the proper time to be successful. Your challenge is to be clear about what you want to create, to develop structures to support your goals, to be patient and to never stop learning.While it may seem slow, this process is often a faster way to achieve performance improvement.

What are your examples where goals, structures and patience have combined to create the results that you desire?

Please feel free to ask questions and to make comments on this article.

Gary Ryan enables individuals, teams and organisations to matter.
Visit Gary at http://garyryans.com

Learn How Structures Support Development – an example from karate

One of our close friends had invited our family to watch their 10 year old son Joshua complete his grading for his Black Belt in karate. Having been training in karate since he was six years old this was a ‘Big Occasion’ for him.

A crowd of over 200 people had assembled in the local karate club’s hall to support children from the age of nine through to 14 complete the requirements for their various Black Belt or First Dan assessments. The formworks and kata were performed to perfection to the delight of everyone. This was followed by various fighting stick assessments, jumping and tumbling kicks & strikes, a nun-chuka formwork and finally wood breaking strikes. Considering the ages of the children their performances were very, very impressive!

Finally, six of the boys and girls who were also being assessed for a special leadership award (which is specific to this club) took it in turns to perform a speech about leadership. As each child gave their speech on their own in the middle of the gymnasium floor, no notes in hand, a structure for their speeches became apparent. The structure was:
1) Introduce yourself and your age
2) Identify your favourite karate activity
3) Name a high profile leader of your choice
4) Provide a ‘key-point’ history of your leader
5) Share a quote created by the leader
6) Explain how the quote relates to your own personal circumstances
7) Thank your parents for their support
8) Thank the audience

While I had been highly impressed by the various karate demonstrations, I was astounded by the performances of these six children. It was clear that they all had different personalities yet each of them was able to stand up in front of a crowd of predominantly adults and provide their speeches. One of the children spoke about Ghandi and provided great detail as he shared an accurate account (including dates) of Ghandi’s life. This boy was nine years old!

It was also interesting to watch each of the children stumble at some point in their speeches. When this happened, each of them drew a long slow breath, gathered their thoughts and then continued with their speech. Imagine the pressure that could have been mounting and the ‘self-talk’ that could have been going on in their heads. Yet they remained focussed and completed the task at hand. It seemed to me that the children had been well taught with regard to the structure that they should follow in providing their speeches, including what to do when they lost their train of thought. It really was a delight to watch.

To me the high level of performance that the children were able to achieve was due to a clear structure that they had been provided in preparing for their speeches. No doubt each of the children had also practiced and practiced this structure, much like they had practiced their kata and formworks. Imagine the confidence that these children will have in their lives going forward. Many adults would run away as fast as possible rather than provide a speech in front of 200 hundred people. Yet these children did it and did it well. They will have that experience to draw on for the rest of their lives. As each child finished their speech the applause sounded like it was coming from 1,000 people and not just 200. It really was extraordinary to witness!

This experience once again highlights the power of having structures to support the outcomes that you desire. While the structures that the children used for their speeches may appear simple on the surface, their importance is no less valuable. What similar examples do you have where a clear structure has supported your own or someone else’s development? What stories are you willing to share with our community? What key lesson stood out for you from your experience?

Gary Ryan enables individuals, teams and organisations to matter.
Visit Gary at http://garyryans.com