Don’t Fall into the Capability Trap: Does your organization work harder or smarter?
When organizations fall on hard times, as many do in our volatile market, the way they
deal with the performance gap typically involves either working harder or working smarter. When organizations take the “work harder” path, they cut staff, increase hours and productivity, and push their constituents to do more with less. If this doesn’t pay off, then wages are frozen or cut and more layoffs ensue. Other work-harder measures typically involve eliminating training and HR budgets, delaying building maintenance, and minimizing retirement funds. Working harder can result in short-term gains, but in the long run, it can lead to long-term deficiencies in lost talent, mistrust, worker burnout, and low morale. Eventually, those working harder either move out or burn out. This leads to what Repenning and Sterman (2001) call the capability trap.
To escape the capability trap, organizations must view serious shortfalls as indicators of inadequate capability and instead of taking a work harder approach, take a work smarter approach to address the performance gap in a systematic manner. By first identifying the root cause of the deficit and defining best practices, organizations can then invest in developing the knowledge, skills, and abilities of its constituents to work smarter and turn things around.
Lyneis and Sterman (2016) offer a series of strategies that organizations can take to escape the capability trap and find win-win solutions to complex organization problems. Although the authors apply the strategy to physical plant issues, I believe they are equally relevant to issues of human capital and performance. Here is my take on the five principles that contribute to working smarter:
- Don’t expect a quick turnaround. When organizations implement Performance improvement strategies, take time and when resources are diverted to investigating and solving root problems, performance indicators may get worse before they get better.
- Metrics are important. Take stock of a variety of capabilities throughout all areas of the organization and honestly and openly communicate the results to bring deficiencies into the open.
- Avoid silos of improvement and instead, focus on the organization system as a whole. Often in hard times, small pockets of excellence will rise to the top, while others continue to decompensate. Sustainable improvement involves addressing systemic, organization-wide improvement.
- Invest in capabilities, even when times are tough. Most organizations are so lean; they have few reserves of ‘fat’ to rely on when they fall on difficult times. Investments in human capital in the form of skill development, reward systems, work-life balance, and career planning can create a reserve of capability and loyalty to draw on during the salad days.
- Invest in capabilities, even when times are good. The best time to build reserves of human capital (performance management, rewards, development, and morale) is during a boom. Reinvest in the organization to both prevent future difficulties and to have a strong reserve to address even the most unexpected challenges.
Reference
Lyneis, J., & Sterman, J. (2015). How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility. Academy of Management Discoveries, amd-2015.
Repenning, N. P., & Sterman, J. D. (2002). Capability traps and self-confirming attribution errors in the dynamics of process improvement.Administrative Science Quarterly, 47(2), 265-295.
Questions for Discussion
How does your organization deal difficult times? Does it take a “work harder” or “work smarter” approach? What are the long-term effects on morale, capability, performance, and retention?
RU Training @ Roosevelt University in Chicago 
Professor Iverson, I am happy I decided to review this article. I thought it was well put together and articulated thoughts on why organizations veer towards working harder vs. smarter and how to adjust their course. I agree that organizations need to get to the root cause and identify best practices. In a prior role, I experienced the business unit taking a work smarter approach, which led to decreased morale, high turnover, and quality issues.
Prof. Iverson, I appreciate your articles regarding to performance improvement. Unfortunately, organizations and even we in our personal lives sometimes work harder than starter. I understand that with the financial situation many organizations have chosen to unified departments, fired people and the work that was done by three employees now relies on one person in addition to his/her regular work routine.
I hold the opinion, rightly or wrongly that people make organizations successful, all things equal. It is absolutely a challenge for a business to switch things up when going through a downturn. As you mentioned, the gains for a work harder approach are short term but in the long term, the business may still be in serious trouble and the underlying problems may still exist. It is only a matter of time before new work harder initiatives are implemented.
Great piece.
I particularly like the advice to invest when times are good. This requires foresight on the part of companies. Unfortunately, I think maybe fewer than rather than the majority of companies have the capability and insight to recognize the need for this continual investment in the business.
Great article! I have experience with work harder, not smarter and work smarter, not harder. Working smarter means taking the time and extra steps to get to the root cause of the problem to implement long term solutions. Taking the time in the beginning, means not putting a fast fix (band-aid) on an issue that will resurface later and present more complexities. It works and is worth it! One of the organization’s I worked for restructured jobs and laid off employees to balance out a budget short fall. It was a quick decision without forward, strategic thought and ended up placing stress on others because it added onto their already full work plates. Everyone was working harder and employee morale plummeted.
Hi Ginger, I have seen this happen also in previous jobs, It is disheartening all around.
However in my organization when dealing with difficult times within the organization, we tend to have meetings and plan ways to solve the problem with a solution. We try to deal with things as a team approach as well. Also depending on sometimes the situation when it comes to a hard worker or smarter worker, of course, the employee tries to work smarter if possible, The long term effects are employees working to perform there best as well as engaging and effective during the performance as well as having a meeting upon the goal as assign to the possible duties within the organization.
This is very timely and right in alignment with an assignment I just completed for Human Performance Improvement. At the company I did my analysis on, the approach has been to work harder. A lot of what is described in the article has been demonstrated – employees have to work longer hours but are expected to get more done, open positions have not been backfilled and training and development is seen as a frivolous use of time. The result has proven to either burn employees out or have them move out. Attrition rates are very high and there is a higher incidence of unplanned absences and leaves of absence as employees try to manage burnout. I whole-heartedly agree with the recommendation to continue to invest in human capital even during the lean times to retain talent and also to ensure that the employees that remain at the organization are working optimally.
My previous employer had a very old-fashioned way of thinking and unfortunately always opted for the work harder approach. Job descriptions were intentionally vague and crossed amongst several different departments. There was overlap of some work and no coverage in other areas due to a very dated top-down model of communication that was broken from the start. Whenever we fell on hard times, front line staff were cut and us managers had frozen wages, yet the CEO always racked in a very cushy salary. There turn-over of staff sits at about 1 year or less. They have a very toxic and distrusting work environment, and it has since splashed into the public view. I am so grateful I do not work there anymore.
Greetings,
It is all too common that training is the first item on the list when searching for items to remove from the budget. Making an investment in the knowledge and skills of the workforce actually contributes to an improved more effective workforce. When considering the alternative of less skilled or knowledgeable workers being driven to do more with less is a recipie for less than Successful results.
Regards,
Excellent advice! To find the root cause of key issues and identify ways to move towards best practices, organizations are able to pivot and make structural improvements addressing long-term needs. It can be hard to give it time, but I’ve witnessed how adding metrics to measure progress has helped organizations move towards more sustainable models. Silos seem to be an ongoing challenge. I appreciate the solution that highlighting collective progress is an important part of the process. Investing in staff capacity makes a lot of sense. People feel valued, especially during times that require them to dig in and do their best in less than idea circumstances.
Thanks for sharing this in a way that is easy to digest and incorporate when creating organizational change.
This blog is an excellent reminder that the human capital in any organization will be both its biggest financial asset and financial investment on money well spent. Business owners and executive leadership alike need to always remind themselves that human capital is people, not processes or pieces of technology. The return on investments into human capital (staff at the organization) can appreciate over time with the right organizational culture and core values. The dividends will back into the organization is several-fold.
By promoting the company culture’s mindset of “work smarter, not harder” will instill a healthy mindset of staff, increase staff and company morale, motivate employees to perform and growth, and increase retention rates.
If the opposite were true and business owners or executive leadership cultivated their organization to “work harder at all costs” like pieces of technology, over time it will depreciate and demotivate employee morale faster than a used car being driven off a car lot. The initial investment will quickly turn into losses in more ways than one: staff retention will increase over time, great talent will find employment elsewhere, the impact of the loss of business due poor performance and capability of staff.
Working smart and investing right when in terms of human capital and performance should be the only option business owners and executive leadership to consider.
I really like this article. I agree that when resources are limited employees tend to work harder. Especially if cuts are made. But what I am more concerned with is when the work environment causes staff to burn out or move out because the work is hard due to inefficient processes or policies. I have noticed in several companies that some policies complicate the task and make it harder to get things done.
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I like this blog and have similar feelings. At my workplace, we have a website that let’s associates enter stuff they feel may improve process execution. We have received many new ideas because of this. It helps breed ingenuity with the front-line workers who do the job everyday.
Reblogged this on The Imperfect Organization.
I have been in multiple organizations that have worked harder, instead of working smarter and adjusting or even creating ways to shrink performance gaps within the organization. The organizations I have been a part of would rather layoff first, and then divide (if possible) those tasks left by departing individuals to anyone that is left, in a supervisory role. Most of the time, the supervisors are ill-equipped or ill trained to complete these tasks and then the tasks are given to an outside third party. Once that fails the organization tries to hire additional staff to bring those tasks back to individuals from outside the organization who although are well trained are now being paid less than those who were previously laid off. The refusal of these organizations to work smarter and in turn, do the exact opposite of the five principles listed in the article, is evident and not lost on employees, even to those who do not have a background in Organization Development. This lack of investment creates its a cycle of high employee turnover among the new staff, because these new well trained individuals realize that there are better opportunities elsewhere.
Excellent article! I work in the public sector and in the past they have definitely made the decision to work harder, rather than smarter. When the economy fell funding for all training and staff development fell. While on paper it looks like they saved money, the reality is it cost them significantly more. You have employees who are not personally vested in the District or job. Morale dropped and staff didn’t feel valued or supported. Strong employees left to find jobs with more Districts that were more financially stable. The employees that were left became disengaged. Having a plan in place for career planning or skill development could have made a world of difference. I wish more organizations would take the time to be proactive rather than reactive.
Great Post! Many companies eventually working harder than smarter more times than not. This then of course puts a huge dent in the morale of the team because they cant seem to find the rainbow at the end of the tunnel, which then plays on the retention of the staff because everyone becomes extremely burned out from overworking. Its one big cycle. When companies work smarter and invest in the capabilities even when times are tough it gives the team the push they need to continue working to the best of their abilities in order to see the company succeed.
This is a great post that I can relate to in my organization. We particularly struggle with the silos. Every department wants to do what they think is best for the company, but it winds up only helping one department while making work more difficult for another department.
This is a great post with so many strong points. I think some of these points can be applied even when times are good. The one that stood out to me was work without silos. In so many companies departments put their heads down in their area never to look up and ask how will my actions effect the other groups. Having an open line of communication can help take care of this, but both parties need to be willing to act.
This is a great and insightful article. Being overworked and having a workload that is rather extreme. I am too familiar with ensuring that I strive to work smarter and to be more effective. I like the advice brought forth by the article.
My organizations takes a work smart approach but it doesn’t always work out that way. Our main focus is safety so some if a piece of equipment malfunctions and a temporary work around is put in place until a permanent fix can be done it may require the operators to work longer hours to complete the task. They may be required to stand watch resulting in extended shifts, etc. They look at it as working smart to keep a minor issue from becoming worse and having a heavy negative impact on the working crews but it also requires them to work hard. This happens quite a bit in operations causing unhappy operators because it cuts into their work life balance but most of the time is unavoidable.
I really enjoyed reading this article, and understanding its applicability to my current work situation. My place of employment gained a new president almost a year ago. From what I can tell, they seem to understand that a quick turnaround is not going to work for our current situation, and I am ever grateful for their patience. During this time of change, there are definitely things being reinvested into employees, to include additional time off during the Holiday season (University closing), consolidated work weeks to be offered in June and July, talk about reinvesting into employee’s retirement packages and giving well overdue raises to those who deserve them the most. I have only been at this University full time for about a year now, but I hear about how things used to be, etc. So what’s being talked about/explored right now seems like it will certainly boost employee morale. It seems to me that our new president is looking to work smarter, vs. working harder and I think that is very appropriate for our current situation. Thanks for the share!
This post is so timely for me! My organization recently – less than two weeks ago – experienced a workforce reduction of 400 employees across the whole system. We lost 81 at my location but we had already lost 20 3 months ago. They certainly should have thought about working smarter and planning for how to avoid the capability trap. As so often happens they decimated the education department which is where the bulk of of training gets done. There was little investment in capabilities when times were good, and there certainly will be no investment in them now. As for the 5 Steps to Working Smarter, #1: I certainly hope they don’t expect a quick turnaround because they have left departments without people who with the proper knowledge or training to do their jobs. Metrics are huge so I expect they won’t have a problem with #2. Historically they have had problems with people working in silos so I’m afraid that #3 will also pose a problem for my organization. We already know that there are no plans to implement #4 and #5 unfortunately. I certainly feel for the people who lost their jobs but in many ways those that remain are in worse shape due to the capability trap.
I have worked for organizations that definitely work harder. They encompassed a “put out fire” mentality. They were not proactive, but reactive.
As a result, there were many layoffs, restructuring plans that did not come to fruition, and years of broken promises and failed attempts at process improvement. This inevitably resulted in low retention rates and morale.
This is a terrific post! Having a twenty year background in elementary and middle school education in Chicago and surrounding suburbs, I find this post speaks to some of the struggles that I have seen locally and nationally.
“Don’t expect a quick turnaround” – In my experience, school districts are always looking for the quick turnaround. Examples of the quick fix mentality can be found in annual changes in curriculum, assessments, professional development and personnel. Long-term planning, followed by its implementation, evaluation, and adjustments are often only sustainable as long as there is continuity. The changes need to be given time to take hold. If not, nothing takes root, and another round of quick fixes is introduced. Unfortunately, priorities change quickly and/or there are too many. When there are too many, you have none. Patience is a virtue, and one that is needed in school leadership.
“Invest in capabilities, even when times are good…tough” – Every relationship is about the people involved and how they treat each other. It’s that simple. If organizational leadership invests in people when things are good, the people will feel valued and appreciated. If organizational leadership invests in people when things are tough, the people will feel valued and appreciated. People feeling valued and appreciated will work smarter and harder, and will be more likely to stay. Investing in people is how organizations can actually invest back in the organization. It’s an investment that not only addresses morale, capability, performance, and retention, but the organizations bottom line.
Thanks for sharing the article.
This is a wonderful article. I think the default with my organization is to work smarter, The work smarter approach allows the organization to make improvements to what is already in place which is very good for moral and in some cases employee performance has improved with the work smarter approach. Making small measurable improvements also allows my organization to stay competitive within its industry.
This is such a great article. I find that during difficult times my organization tends to ‘work harder’. I see that the long term effects are compromised. The morale becomes low, people tend to feel they are not valued therefore their performance decreases. I also see a lot of people leaving either the team or company.
I agree that the five tips provided can be used in any organization or industry. When I first read through them there were two that stood out to me right away. They are number 4 and 5 around capabilities. I see this happening a lot within my organization and also when speaking with people outside of my company they mention this as a challenge as well. This article really helped to put things into perspective for me. Thanks!
Thank you Michael. Interesting take on this situation in churches–not something that I would have considered but it makes sense.
Kathy
Prof Iverson, Great post. The field that I am most familiar with is church work. Churches are not exempt from this trap. I think they are more susceptible to the trap because of lack of funds. I have seen and experienced so many staffs that are over worked. Many pastors and clergy have not gone through the proper leadership training to understand this concept. The default many times is to just work harder. I am so glad that in number 4, you mention work-life balance. This is a hard one for any employer to understand. Employees must be replenished in order to do their job well. When organizations take a work smarter approach everyone wins. In the long run it is a healthier approach to lead.