It ain’t what you do…

Would you prefer your staff to go ice fishing or cast their nets on the high seas? It all depends on what you want to achieve as an organisation. In his doctoral thesis, Bart Verwaeren researched which fishing method leads to more radical innovation and how you can stimulate people to do things the way you want them to. Should you give your people bait or a boat?

Exploration versus exploitation

‘Even more than other employees, managers and knowledge workers have the choice between exploration and exploitation, between waiting beside a hole in the ice or heading out to sea,’ Verwaeren tells us. ‘Ice fishing involves making a hole exactly where you know the fish you want to catch are lurking. You leave your line dangling in the hole and then all you have to do is wait for the fish to bite. You know in advance which fish you are going to catch. Managers who choose exploitation, just like ice fishers, stick to familiar methods and processes.’

‘Exploration, on the other hand, is like casting your net out wide across the sea. What will you haul in? It’s anyone’s guess. You might find a species of fish you can’t use, but you might be lucky and catch exactly what you want. And who knows, your net might hold something even more valuable than fish! Managers who explore are people who experiment with new things and working methods. For organisations, exploration is important because – as innovation literature teaches us – it benefits innovation. And radical innovation in particular.’

Result or process?

Organisations use all kinds of management practices to direct the behaviour of their staff. More specifically, Verwaeren has researched the impact of accountability – the feeling that you are being held to account somehow, that you have to justify your actions. And that feeling can be stimulated by means of all kinds of mechanisms, such as evaluation and bonus systems.

‘I have made a distinction between outcome and process accountability. That is, the feeling that you are being held accountable for results and the feeling that you have to justify the strategies or processes you use to arrive at those results. And then I investigated whether, and under what circumstances, outcome and process accountability stimulate or inhibit the exploration of new ideas and ways of working.’

Not what you would expect

On the basis of traditional management control theory, you would expect that you will need to evaluate managers and knowledge workers on the basis of results if you want to encourage them to explore. You need to reward the results precisely because the processes or strategies to achieve the result have not been incorporated into their jobs as fixed elements. You can hardly develop mechanisms or management practices that stimulate processes leading to innovative results if you don’t know what those processes are. So, focus on the result, traditional theory says, stimulate outcome accountability, but give people their freedom when it comes to how they achieve that result.

‘If you consider the issue from a psychological perspective, which is exactly what I – having been trained as a psychologist – did in my research’, Verwaeren smiles, ‘you will find the exact opposite: if there are no fixed processes or procedures and you ensure that people feel they are being evaluated on how they do something, i.e. you apply process accountability, you will see more explorative behaviour than if you reward the result.’

More aware

Both his fieldwork based on surveys conducted at a consultancy firm and various experimental studies point in the same direction. How does he explain that? ‘If you give people the impression that they will be held accountable for the way they have acquitted themselves of a task – and if there are no fixed guidelines on how to do it – they will be far more aware of how they are carrying out the task, give it more thought and experiment with new solutions instead of falling back on what they already know. In short, they will start exploring. If you give them the feeling that the only thing they need to take responsibility for is the result, they are inclined to opt for the shortest route and that is not always the most explorative.’

Caveat

Verwaeren emphasises that the type of job or task is an important extra condition for the conclusion of his research. ‘If you start using process accountability in jobs where well-defined processes exist for different tasks, people will follow those processes to the letter and you will not stimulate any exploration. The proverbial bureaucrat who has to work through a long checklist with every person they speak to will therefore not start wondering if there is a more efficient way of doing things. My conclusion applies to staff that you want to focus on undefined processes. That is what leads to the most exploratory behaviour.’

Reward the process

What does his research actually mean in practice? ‘It overturns the conventional view. If businesses and organisations want to promote and stimulate innovation, and therefore exploration, if they want to set up performance management systems or organise management and leadership training sessions, they need to consider the question of whether focusing on results alone will actually have the desired effect. At that point it would be a good idea to consider processes for knowledge workers and managers as well. How do you sell things instead of how many things have you sold?’

Nowadays, most performance management systems tend to be based on the results achieved, which is simpler. ‘Incidentally, managers themselves prefer outcome accountability, which is something I have noticed in interviews and there is also research on this issue. They believe that process accountability will tempt people to pretend to be hard at work, as if they had followed well thought-out strategies, without that actually being the case. They have the feeling that outcome accountability is more objective. So: process accountability as a stimulus for exploration and innovation: yes! But we will probably have to overcome certain obstacles before we can get all managers on board.’

Source: ‘It ain’t what you do it’s the way that you do it – The effect of accountability focus on individual exploratory search.’ by Bart Verwaeren. Doctoral thesis in Applied Economics obtained from Ghent University in 2017. Promoters: Professor Dirk Buyens (Ghent University and Vlerick Business School) and Professor Xavier Baeten (Vlerick Business School).

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