Tuesday, May 24, 2011

Combat Cronyism. Inspire Loyalty.

“Loyalty’s Very Important to Me”
Back when I was working at Siebel Systems, I knew a VP who would frequently say “Loyalty is very important to me.” He over-emphasized this point, sounding more like a mobster out of a 1960s movie than a manager. Although his words implied that he rewarded people who were loyal to him, his tone made it crystal clear that his intention was to punish disloyalty. As I got to know him better, it became clearer to me that he didn’t understand the difference between loyalty and cronyism, and what he really meant was that cronyism was very important to him.

Loyalty Defined
Loyalty is built over time with mutual respect, based on trust in the other person’s intentions and competence. The foundation of loyalty in the workplace is:
  1. A willingness to put another person’s needs or goals ahead of yours, though generally not ahead of the needs of the team or company.
  2. Ongoing support whether you stand to benefit from the person you’re loyal to or not.
  3. Mutual respect and admiration rather than self-interest. 
    Cronyism Defined
    When I think of the “crony” types I’ve worked with, a few traits and behaviors stand out.
    1. A willingness to put their individual needs and goals above those of the team, the organization, and the company. Cronyism is rooted in self-interest rather than mutual respect.
    2. Cronyism is symbiotic, and includes colluding with someone else to manipulate situations or people to support the goals in item #1. Sometimes both cronies are helped at the same time, but more typically, cronies “take turns” i.e. one manipulates today’s situation to help the other, knowing that the other will manipulate the next situation to “pay them back.” It also frequently takes the form of “covering their tracks” i.e. if Crony A underperforms or mismanages a situation, Crony B helps them to shift blame or otherwise excuse it. 
    3. An expectation of unfair advantage over peers, granted by a person in power to whom the individual is a crony.
    4. Cronyism is different than being a sycophant or “sucking up” in that cronyism involves taking direct action that may be detrimental to the organization, not just saying “Great idea, boss!”
      The Impact of Cronyism vs. Loyalty
      In my experience, cronyism has negative effects on almost every part of the organization except the cronies themselves. It’s bad for the team, because individuals perceive unfairness and lose respect for the leader who favors his or her cronies. It’s bad for the organization because it can create general suspicion and distrust of people’s motives, and we’ve all seen how hard it is to make progress on complex projects when people don’t have a foundation of trust with each other.

      When left unchecked, cronyism can become a cancer in the company culture that spreads and turns into factionalism e.g. large groups protecting their interests over the company’s. I worked at a very large software company that literally lost hundreds of person-years of productivity because Engineering became factionalized due to pervasive cronyism. Products were delayed by months. In some cases, products had to be rewritten because the organizational factionalism manifested itself in incompatible APIs, data schemas, security models, etc. And this was in a large company where integration was a key value proposition for customers!

      Loyalty, however, is developed throughout the organization by good leaders at any level and has mostly positive effects. It gives people another good reason to follow and work harder for their leader. People then become more loyal to the company because they see the leader as an agent of the company. And it creates an additional bond to a leader that can provide a stabilizing effect in the constantly changing high-tech workplace i.e. re-orgs, mergers and acquisition, layoffs, management changes, etc. 

      It’s worth mentioning that loyalty can have negative consequences when taken to the extreme. Anyone who has watched a “group exodus” where loyalists immediately follow a new leader to a new role has seen this. Just because someone’s a good leader doesn’t mean they’re always going to pick winning companies, and beyond that, while the particular role may be a great next-step for the leader in question, the same may not be true for every follower.  Many years ago, I watched a leader I worked with go to a small marketing automation company, and 3 other people from the Alliances team followed him within a few weeks. The company couldn’t get traction, the leader left in less than 12 months, and the followers had to recover from a bad career mistake due to excessive loyalty. 

      Dos and Don’ts in Coping with Cronyism
      Cronyism is hard to address if the problem is at your level or above you in the organization. There’s really no “silver bullet” answer when dealing with cronyism, because individuals, cultures, and companies are unique. Here are some recommended dos and don’ts.

      1. Escalate to a trusted leader - If there’s a trustworthy leader further up the hierarchy and a company culture that generally rejects cronyism, it’s possible to give the senior leader visibility into the situation and let them drive change, but be aware that the change is unlikely to happen overnight, and you are taking a personal risk by being the messenger with this news.
      2. Get external feedback – Because the options can be complex, it makes sense to share your ideas and get feedback from someone that you trust. While some people will choose a confidant who is inside their organization, this brings the downside of potential bias (because they may be impacted by the cronies as well), and creates some risk for you if word leaks out.
      3. Vote with your feet, if necessary - It’s very common for talented, high-performing employees to simply remove themselves from an environment of cronyism, either by making an internal move to another organization, or finding an opportunity at another company. This obviously depends on what else you’d be giving up in your current opportunity, and what your other options look like, but if the cronyism is entrenched and significantly affecting you, it may be time to move on.
      4. Recognize that time is your ally - The worst enemy of cronies is time. If you’re in a situation where the cronyism isn’t repeatedly and directly damaging you, you can “wait it out.” It may take months or even years, but cronyism eventually catches up to the vast majority of its practitioners. As John Lennon once said, “Time Wounds All Heels.”
      1. Escalate to Human Resources – I’ve seen many colleagues fail when escalating situations like this to HR. Seasoned cronies are usually able to “do their thing” without violating the letter of HR law, so you will be viewed as a complainer, and you will have partnered with an organization (HR) that, in the absence of a clear violation, can’t really fix the problem. The cronies won’t adjust their behavior, they’ll just team up to undermine your credibility and minimize your role.
      2. Act out of anger – Taking any action to deal with cronyism can have significant positive or negative consequences, so approach it thoughtfully. Don’t act out of anger or impulse, as we discussed in last week’s post on fear of conflict.
      Have you personally observed or experienced cronyism? How have you dealt with it, and what was the ultimate outcome?

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