The Four Hundred

If modeling a modern corporation after the ancient city-state of Athens ("As I See It: The View from the Ivy") seems a more whimsical than practical way to accommodate the needs of knowledge workers, the concept of fair process offers a more immediate possibility of realization. Although fair process bears little resemblance to the slow, messy workings of a participatory democracy, it does share one commonality that will be immediately appealing to management: It is not directly concerned with fair outcomes.

Fair Process: Managing in the Knowledge Economy was first published in Harvard Business Review in 1997 and was resurrected for its January 2003 Special Motivational Issue, which suggests that it's either a whale of a good idea or there have been few motivational breakthroughs in the ensuing five years.

The premise behind Fair Process is a simple one: Trust is the currency of the knowledge economy, and workers will support almost any management decision, as long as they believe that the method used to make it is just. Researchers W. Chan Kim and Renee Mauborgne claim that this premise holds true even for decisions that may not be in the employee's best interest. A layoff, for example, can be accepted if the reasons for it are valid and properly explained. But even when management decisions result in outcomes favorable to employees, if the decisions are reached unfairly research suggests that employees will still be dissatisfied. So, as an example, if a decision were made to provide training but it was arbitrarily offered on the basis of seniority, rather than job requirement, those who needed it most might be frustrated at having to wait their turn.

In other words, the authors argue, how you get someplace is more important than where you end up.

Indeed, as a management model, fair process is counter-intuitive and therefore invites skepticism. Business, after all, tends to be outcome, not process, driven. Organizations are structured and incentives offered to achieve some desired end. Goals are charted and progress is carefully monitored. Sales quotas, on-time shipments, software fixes, system availability. Rewards are given to those who achieve their targets and no one much cares how they managed to reach them. Process becomes an issue primarily when there is a consistent inability to produce desired outcomes.

But the authors argue that neglecting process is precisely what impedes desired outcomes. If treated unfairly, knowledge workers, they say, will withhold their ideas and cap their initiative, or simply act out. An unfair process that sets unreasonable quotas may provoke IT salespeople to sell vaporware, or induce shipping departments to release incomplete orders so as to meet arbitrary deadlines. It may also explain the desire for "retributive justice," which manifests, the authors say, when "individuals have been so angered by the violation of fair process that they have been driven to organized protest." Evidence suggests that if compelled to strike, employee demands often stretch beyond what is reasonable or even prudent in a desire to punish the company.

But the consequences of ignoring fair process need not be so blatant. Let's suppose your management decides--for valid business reasons--to migrate to new computer technology. Not wishing to unduly burden the staff or upset the flow of operations, no announcement is made, but consultants are brought in to study the current situation and make recommendations. They wander about asking questions, taking notes, and holding closed-door meetings. While management is busy dotting the i's on the proposed solution, everyone is wondering, "Just what the hell is going on?" Meanwhile, the rumor mill is grinding out its own answers: layoffs, closures, outsourcing.

When the announcement is finally made, although everyone is relieved that only hardware and software, not staff, will be replaced, there is little buy-in to the solution because the people compelled to implement it were not consulted. Even if there is agreement on the justification for the change, the likelihood is that the implementation will drag on because employees felt disrespected by the process that spawned the decision.

Thus, the first element of fair process, the authors explain, is engagement. Involving people in the decisions that affect them may seen self-evident, yet many top-down organizations still reserve decision making to an insular group of top managers. It may not be possible for everyone to have a voice in every decision, but it is vital that everyone feels assured of a fair hearing. Inviting employees to participate in the decision-making process creates trust and a sense of ownership for the success of the outcome. Besides, knowledge workers, by definition, are presumed to have knowledge, so it is only prudent to tap it.

The second component is explanation. "Everyone involved and affected should understand why final decisions are made as they are." The importance of explanation, the authors note, is that it allows employees to understand the intention of management, which is especially important when their own ideas or preferences have been rejected. And the greater the understanding, the greater the trust. This is like being told as a child, "No, you may not eat that candy, because if you fill up on candy you won't have room for dinner." You still don't get the candy, but at least you know it's nothing personal; and although the outcome isn't optimal, the positive intention behind it is clear.

The last element of fair process is expectation clarity. Major decisions or shifts in direction invariably include new rules and new responsibilities. Each person must understand what is expected of him and what standards will be used to judge his performance. Again, the authors argue that "it matters less what the new rules and policies are and more that they are clearly understood."

Sounds reasonable, but then the model takes an unexpected twist. Fair process, the authors claim, has nothing to do with fair outcome. For mangers, this sounds like an escape clause, while employees may hear a warning bell. Fair process apparently does not mean providing workers with the resources they need to do their jobs, or rewarding them appropriately for doing it. It is more concerned with providing a level road than a pleasing destination. The assumption may be that a decision to move a manufacturing plant overseas will not be viewed as fair by the people losing their jobs, regardless of how impeccable the process that deprives them of a paycheck.

But in the absence of a mutually acceptable destination, even the "fairest" of processes must ultimately rely on coercion. That reliance, though common and accepted, is reflective of the ultimate limitation of fair process, as articulated by Kim and Mauborgne: namely its lack of concern with fair outcome. Disparity in, or failure to produce, fair outcomes may be tolerated by the workforce, but only for a while. What then?

Although the concept was given intellectual gravity by virtue of being published in Harvard Business Review, fair process is essentially little more than managing by the Golden Rule: Be respectful, seek input, value all opinions, explain decisions, clarify expectations, treat others the way you would like to be treated. The strength of the model is that people will abide the pain while staying committed and sharing their ideas for improvement. But if, during the hard times, fair outcomes are reserved only for top management, fair process will be viewed as self-serving.

For unengaged managers, perhaps the greatest appeal of fair process lies not in what it is, but in what it is not. "Notice," Kim and Mauborgne write, "that fair process is not decision by consensus. Fair process does not set out to achieve harmony or to win people's support through compromises that accommodate every individual's opinions, needs, or interests."

Well, what manager would not wish to liberate himself from the yoke of outcomes, consensus, harmony, and compromise? That's the heavy lifting of management. Ask people for their input and ignore it often enough, and the process will appear cosmetic no matter how much explanation is thrown in. The questions not adequately answered by Kim and Mauborgne are, what do we do when confronted with issues fair process alone can not assuage? Or when the injustices of the past create distrust in the present? And, ultimately, what happens when we can't agree on what is fair? Who gets to decide and by what standard?

There is a broadly acknowledged crisis of loyalty in the American workplace, which reflects a state of tenuous trust. Building trust through process while ignoring outcome will prove insufficient. Even well-intended processes will eventually break down. The most vivid illustration of the relationship between process and outcome is being ominously dramatized on the international stage in the Middle Eastern peace process, which collapsed for lack of progress toward a fair outcome.

Regarding fairness, British correspondent Linda Blandford wrote, "Justice is a concept. Muscle is the reality." When management systems eliminate the implied threat of muscle which that behind the desire for fairness, then we will truly witness a motivational breakthrough, one that will not only transform business, but the world beyond.