Acceleration Trap HBR
Acceleration Trap HBR
org
1 Article Summary
Idea in Brief—the core idea
Reprint R1004G
Purchased by Lucas Schroder ([email protected]) on February 22, 2013
The Acceleration Trap
Idea in Brief
If you demand that employees give you the
same level of accelerated effort every day,
month after month, their energy will fail
and the company’s performance will suffer.
page 1
Purchased by Lucas Schroder ([email protected]) on February 22, 2013
It’s not just individuals who burn out—companies do, too.
Faced with intense market pressures, corpora- trap. It harms the company on many levels—
tions often take on more than they can handle: over-accelerated firms fare worse than their
They increase the number and speed of their peers on performance, efficiency, employee
COPYRIGHT © 2010 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
activities, raise performance goals, shorten in- productivity, and retention, among other mea-
novation cycles, and introduce new manage- sures, our research shows. The problem is per-
ment technologies or organizational systems. vasive, especially in the current environment
For a while, they succeed brilliantly, but too of 24/7 accessibility and cost cutting. Half of 92
often the CEO tries to make this furious pace companies we investigated in 2009 were af-
the new normal. What began as an excep- fected by the trap in one way or another—and
tional burst of achievement becomes chronic most were unaware of the fact.
overloading, with dire consequences. Not only That’s the bad news. The good news is, it’s
does the frenetic pace sap employee motiva- possible to escape the acceleration trap. Com-
tion, but the company’s focus is scattered in panies can sustain high performance over the
various directions, which can confuse custom- long term without overtaxing their employees
ers and threaten the brand. or confusing their customers. In this article,
Realizing something is amiss, leaders fre- we’ll show leaders how to recognize the accel-
quently try to fight the symptoms instead of eration problem, start to move their compa-
the cause. Interpreting employees’ lack of mo- nies in a different direction, and make cultural
tivation as laziness or unjustified protest, for changes that will prevent future entrapment.
example, they increase the pressure, only mak-
ing matters worse. Exhaustion and resignation Being Trapped
begin to blanket the company, and the best We have studied more than 600 companies over
employees defect. the past nine years as we tried to understand ac-
We call this phenomenon the acceleration celeration. Our data provide a sobering look at
conditions inside a company that is accelerating dressed the overload problem, but at the time,
too much. At companies we define as fully employee burnout was a serious threat.
trapped, 60% of surveyed employees agreed or The second pattern is what we call multiload-
strongly agreed that they lacked sufficient re- ing: Companies ask employees to do too many
sources to get their work done; compare that kinds of activities. This leaves employees and the
with 2% at companies that weren’t trapped. The company as a whole unfocused, and activities
findings were similar for the statements “I work are misaligned. Some 35% of firms in our sample
under constantly elevated time pressure” (80% suffered from multiloading. ABB was both an
versus 4%) and “My company’s priorities fre- overloader and a multiloader, giving employees
quently change” (75% versus 1%). Most respon- too much to do and saddling them with restruc-
dents at fully trapped companies disagreed or turing plans that called for too many different
strongly disagreed that they saw a light at the types of actions. As a result, most of ABB’s field
end of the tunnel of intense working periods managers were working without focus and
(83% versus 3% in nontrapped companies) and achieving little effective change.
that they regularly got a chance to regenerate Finally, companies get into the habit of con-
(86% versus 6%). stant change, or perpetual loading. This pat-
Most of the companies in our study landed in tern deprives workers of any hope of retreat
the trap after an exhilarating ride. A good exam- for recharging their energy. To compensate,
ple is the European conglomerate ABB. they hold back their efforts whenever they can,
Founded in 1987 in a merger between the Swed- even if doing so hampers the company. Some
ish Asea Group and the Swiss Brown Boveri 30% of firms in our sample were affected by
Group, ABB grew rapidly, buying 55 companies perpetual loading. These companies, which
in its first two years. After eight years of strong persistently operate close to capacity limits,
growth, the company began to show signs of ex- tend to be the hardest on employees. Just
cessive acceleration. Acquisitions were no about anyone can tolerate overloading or mul-
longer well integrated; different parts of the tiloading for a while, especially if there’s an
company were competing for the same custom- end in sight, but when leaders neglect to call a
ers. One annoyed customer, with seven business halt to periods of furious activity, employees
cards already on his desk from ABB salespeople, feel imprisoned by the debilitating frenzy.
suggested sarcastically to the eighth rep that At Lufthansa, for example, employees experi-
next time, they all get on a bus and visit him to- enced a decade of relentless change and cost
gether. As we’ll describe later, ABB’s situation cutting measures. In 2004, Holger Hätty, then a
didn’t improve until a new CEO, Jürgen Dor- member of the executive board of Lufthansa
mann, extricated the company from the acceler- Passenger Transportation, told us that employ-
ation trap. ees were worn down by being told over and
over again to economize. “Our people respond
The Habit of Constant Change by asking, ‘When is the economizing going to
Over-accelerated companies exhibit at least come to an end?’ They are exhausted, and every
one of three patterns of destructive activity. time they slow down to catch their breath, there
The first is, simply, that employees are over- we are at their heels, telling them: ‘Econo-
loaded with too many activities. They don’t mize!’” Lufthansa successfully extricated itself
have the time or the resources required to do from the trap, as we describe below.
their jobs. Some 35% of firms in our sample
overloaded their employees. Bombardier How to Break Free
Heike Bruch ([email protected]) Transportation, the Berlin-based global mar- If your company is caught in the acceleration
is a professor of leadership at the ket leader for rail transportation technology, is trap, you have several ways to break free: Halt
University of St. Gallen in Switzerland. one example. It had experienced success and less-important work, be clear about strategy, cre-
She is a coauthor of Fully Charged, enormous growth, but in the past few years, it ate a system for winnowing projects, and declare
forthcoming in December 2010 from was operating in a continual state of overload. an end to the current high-energy phase.
Harvard Business Press. Jochen I. To keep up with competitive pressures, it took Stop the action. Instead of asking employ-
Menges ([email protected]) is measures to optimize efficiency and enlarge ees to suggest new initiatives to improve the
a lecturer in human resources and capacity. But as the value of its contracts more company, why not turn the question around?
organizations at the University of than doubled, its number of engineers grew Ask employees for ideas about what to termi-
Cambridge’s Judge Business School. only slightly. The company has since ad- nate. Employees often respond with a slew of
good suggestions. At one company we studied, pride and performance “and thus was a very
they came up with some 540 ideas, three times important initiative, although the economic
the annual number of new-project ideas they value was not obvious,” Grünes says. To guard
had been suggesting. The company ended up against bloat, the company has made that pro-
halting 40% of its projects. Regularly ask your- cess an annual activity.
self, your managers, and the whole company: Declare the turmoil over. If the acceleration
“Which of our current activities would we trap consists not of a plethora of projects but
start now if they weren’t already under way?” of ceaseless turmoil, the CEO can extricate the
Then eliminate all the others. company by calling an end to the current
Be clear about strategy. Asking “What should round of changes. After taking the helm at
we stop doing?” and then terminating nones- ABB, Jürgen Dormann instituted a number of
sential tasks requires CEO fortitude. Projects emergency measures to relieve employees
that need to be killed may have highly placed from change and frenetic activity. In one of his
sponsors, so the CEO must be prepared to step weekly messages to employees, he declared
on some toes. Ultimately, the choice to keep or that the reorganization crisis was officially
cut loose hinges on whether an activity di- over. “What we see today is more than just
rectly supports the company’s strategy—so light at the end of the tunnel,” he stated. “This
that strategy must be clearly understood is the end of the tunnel.” Employees felt proud
throughout the entire firm. and relieved.
Decide how to make decisions. Not every Lufthansa did something similar by easing
project that supports the company’s strategy is its formerly relentless—and exhausting—focus
of major importance. So companies need a sys- on cost control. Although cost sensitivity re-
tematic way to make hard choices. When the mains important, Wolfgang Mayrhuber, who
Otto Group, a leading international trading became CEO in 2003, allowed the firm to re-
and services corporation with 53,000 employ- cover from the seemingly never-ending process
ees, restructured, managers found themselves of savings by shifting the focus toward more in-
burdened with 20% to 30% more work. So in novation, a service culture, and diversification.
2007, the company initiated a stop-action He also further decentralized the company
review. Each executive was asked to select a and gave employees more freedom to work at
single project that he or she wanted to com- their own pace.
plete by all means. But that still left too many
in play, according to Thomas Grünes, then Don’t Get Trapped Again
head of central services, so the list was then Just as important as breaking free is prevent-
halved based on each project’s required invest- ing future entrapment. To do that, executives
ment, value-to-cost ratio, and, in certain cases, can institute stop-action initiatives, reduce the
symbolic value for employees. For example, number of goals the company sets, and man-
the final list included a redesign of reception date that project-management systems care-
areas and staff restaurants, which increased fully filter out the mediocre ideas. Some com-
panies ease the sting of project-killing by
creating a “burying” culture.
Institute spring cleaning. A period devoted
Crisis Management by Stopping the Action to a good sweeping gets managers into the
habit of culling initiatives. Of course, it
In the midst of the economic crisis in He asked managers to classify all cur- needn’t happen in the spring—or, indeed, on a
2009, executives of Phoenix Contact, the rent and future projects as A) necessary strictly annual basis. Some companies estab-
German maker of industrial electrical for the company as a whole, B) important lish a schedule of housecleaning; others sim-
and electronic technologies, sensed em- but can be postponed for a while, or C) ply decide that they will clean whenever tasks
ployees were becoming overloaded. Re- can be delayed for two years or cancelled. and activities seem overwhelming or before
ductions in workers’ hours had resulted “At first, people said, ‘We have only A- starting a new change process.
in lower company capacity, so executive tasks,’” Olesch explains, “and I answered, Cap annual goals. Placing a cap on the num-
vice president and board member ‘Then classify your tasks as A1, A2, or A3.’ ber of goals set each year is crucial to prevent-
Gunther Olesch initiated a process to re- We have to cancel activities—otherwise ing an explosion of activities. “Managers are
duce the workload across all units and we burn out and we will not come out of no longer allowed to set 10 top-priority goals,”
levels. the crisis in fit shape.” Hans Schulz declared when he was CEO of
Balzers, a Liechtenstein-based industrial com- we have the resources for this project? Who
pany. Schulz permitted each to name just will lead and own it? What other project will
three “must-win battles,” because he believes we abandon to make room for this one?
that the point of goal setting isn’t to pile up Introduce a “burying” culture. Terminat-
projects but “to give people an orientation and ing a project can cause serious pain not only to
to focus their action, attention, and energy.” its sponsors but also to the lower-level people
After this rule went into effect, significantly who have been toiling on it. In a company that
more goals were achieved, Schulz says. To help values commitment and reliability, managers
make goal-reduction stick, a visible commit- and employees are likely to feel ashamed at
ment from the CEO is necessary—especially in being told to stop working on something
companies used to following a management- they’ve put their hearts and souls into. One so-
by-objectives approach. Leaders must help lution is to foster a culture that encourages
managers understand the purpose and value managers or project heads to halt lesser
of refocusing on just a few goals and assist projects. We’ve seen, for instance, companies
them in applying the new rules. hold a metaphorical burial for a project so that
Filter new projects. At too many firms, the everyone involved in it could grieve and let go.
CEO implicitly or explicitly encourages the During such a ceremony, managers should
people running project management systems thank employees for their dedication and em-
to get caught up in new-project euphoria and phasize the project’s good points. A burying
to be liberal with go-aheads. Instead, CEOs culture is particularly important for highly in-
should require that project management sys- novative companies that start many projects
tems be used as much to filter and prioritize as to see which will thrive.
to manage projects. At the beginning of a
project cycle, project managers should ask: Do Changing a Culture of Acceleration
Preventing the growth of new activities is only
one aspect of avoiding the acceleration trap.
Making changes in the company’s hurry-up
Does Your Company Have an Acceleration culture is another crucial component.
ation after stressful phases. Perhaps that’s even though he had worked intensely during