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Nov 16, 2017

Whenever I familiarize myself with a new company – because I am writing a case study on them or have been asked to speak to a group of their executives — I find out what its key processes are and why it has organized them that way, often first asking, “Why?” As in, why have you organized things this way? You would be surprised how often I receive the answer, “I don’t know — that’s just how we’ve always done it.”

People in organizations run and manage things in particular ways, but it is only when someone from the outside comes in and challenges the traditional method that companies realize they have a choice — and a chance to perform better. This role – of the informed outsider – can be expertly served by newly recruited employees. But only if you organize it well.

New Hires, Fresh Perspectives

New employees can have fresh perspectives. They observe and challenge existing, flawed conventions and generally buck the idea of “that’s just the way we do things round here.”

However, research tells us employees assimilate rather quickly in new groups, suppressing their desire to challenge existing practices, and ultimately adapting to the company’s existing processes and culture. Research in social psychology, since the famous Asch studies, has consistently shown that individuals are inclined to not speak up, but stay silent about their dissenting opinion when they stand alone.

Individual newcomers often lay low out of a fear of being rebuffed, not taken seriously, or even mocked. Frankly, they might be right. Even if individuals speak up – which is already a big if – they are at risk of being actively ignored.

How We’ve Always Done It

What organizations fail to realize is how the “we’ve always done it this way” mentality is a sign of a corporate routine gone antique. As the famous economists Dick Nelson and Sid Winter put it in their classic book An Evolutionary Theory of Economic Change, organizations consist of routines. Routines enable organizations to learn and prevent employees from constantly reinventing the wheel. Eventually, they’re established as “best practices.”

However, what once made sense is no longer the most efficient and effective way of operating. In business, contextual circumstances change constantly. There usually are gradual technological developments, consumer preferences that evolve and new competitors with different business models that emerge and disappear. As a result, what was once a best practice, may well have become a bad practice, as I discuss in my book, Breaking Bad Habits: Defy Industry Norms and Reinvigorate Your Business.

Make It Safe to Speak Up

To minimize bad habits, companies need an organizational structure that taps into the fresh perspectives of new employees. The first step is to create what Harvard Business School Professor Amy Edmondson refers to as psychological safety – making it safe for new recruits to speak up.

Psychological safety concerns a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns or mistakes. This environment can be created in various ways, but one of them is to simply ask people explicitly, showing people their views are welcomed.

Therefore, firms would do well to set up a systematic way in which employees are explicitly asked to share their experiences after several months on the job. Observations can consist of certain processes, systems or structures in the firm they’ve encountered, and those they don’t understand.

The operating procedure to systematically quiz new recruits about existing practices must be designed to prevent new employees from being lone voices. The practice of asking them after some months on the job should be organized around connections with other recent recruits. This not only increases psychological safety, but also opens the possibility that new hires have identified the same puzzling habits. This enables them to speak up jointly about it and, thus, to not be ignored.

For example, depending on size and diversity, a firm could organize a new recruits day three times per year: A conference-style meeting specifically for people within their first year of employment, to systematically gauge these issues.

Question Your ‘Best Practices’

All organizations develop habits, many of them good. However, even good habits become antiquated and ineffective. While catching them is not easy – precisely because they are habits and may have become deeply ingrained in the organization’s psyche – new hires have the potential to play a crucial role in exposing such bad practices.

However, developing standard procedures that use new employees to challenge flawed conventions can overcome these barriers. Use them consistently and it will create a capability for your firm to continuously renew itself, prevent rigidity and inertia from creeping into the system. Do it well and this can form a formidable competitive advantage.

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