Good morning, My name is Drew Stark and I am honored to be here. I have an exciting model to present on Stewardship in the Workplace.
There are essentially two main theories on management: Agency theory – where the assumption is that given a choice the ‘agent’ will chose to harm the organization to acquire a short-term gain for themselves. To prevent a parasitic draining away of resources that would only benefit the ‘agent’ and not the principal (governing because of fear of harm) the principal will put controls in place in the form of enticements and punishments to coerce the ‘agent’ to act on behalf of the principal’s organizational objectives. The controls inherently promote conflict as a means of controlling the actions of others by limiting the appeal of innovation and individualistic thinking. This model is considered the more mature of the two because of the ease with which any stimuli can be traced to a resultant response; outcomes are profoundly predictable. Stewardship theory – where the assumption is that given a choice the ‘steward’ will forgo short-term personal gains to improve the organization as they recognize the long term benefits to both themselves and the organization are tied together. The resultant symbiotic bond is synergistic as the various individual stewards work in unison instead of vying for position or control of resources are inspired to act and support each other in innovative manners to create new thoughts, concepts, and products. This model is considered undeveloped because of the intractable nature of freedoms inherent in the model. I have created the model that allows for the measuring and predicting of the incidence of conflict or synergy by measuring the degree to which the elements which are required to accomplish any work are present and aligned in any given position in any organization. The Stewardship Model is scalable where the Agent theory is limited in its scope to the CEO/BOD level of an organization and requires re-defining at any other level, with further fracturing at recognizable breakpoints as you drill down through management to line workers. The Stewardship Model is applicable to any position in a family, church, non-profit, corporation, community, government, or cosmos. It is applicable to any group such as a congregation in a community, or a department or region within a company, or even a squadron within the military. It is the most adaptable and scalable model of Management Theories.
Let me briefly describe the structures of the Agency theory's for Management. For the agent governance theories we have two specific assumptions which are control structures and interest divergence. Interest divergence describes the idea that the manager hired by the principal will seek their own utility over the interests of the company or shareholder even to the point of abuse. Control structures are those objects (processes, procedures, audits, etc.) which are placed by principals or shareholders to ensure that the behavior exhibited by the agent - in this case the ceo or president of a company - will bring the maximum return to the shareholder. This is almost always detrimental to the agent or other human factors, and counter productive for utility maximization to the principal. The conditions which exist under agent governance or agency theory include but are not limit to expectations of transiency and isolation. Transiency describes the relationship between the manager and principal; the relationship is ad hoc - as far as the business goes either party may terminate the social contract at any time. (There are usually control structures in place to prevent this, such as severance pay or vesting of assets) Isolation describes the support structure that is given to the manager; if mistakes are made they are entirely upon the shoulders of the manager although they are often passed down. This also creates a false adulation for perceived successes. Agency theory and agent governance is based on a model of activity where the relationship is essentially devoid of trust. As this is the prevalent organizational structure in business it engenders chafed egos, conflicts, and socio-emotional dissatisfaction.
Many people, for many years, have sought for an alternative to Agency theory (yes, that is an audacious misnomer, but it is known thus in the industry). Stewardship theory in Management is seen by many to be the antitheses, and therefore better, modality to Agency theory. All human transactions are emotional; we back up decisions and support them and prop them up upon logic. We justify our emotional decisions with logic for a sub strata. All social contracts - as in the hiring or taking on of a job for another - are transactions of long-term socio-emotional value. If we do not feel the expectations that we have of such emotional contracts are met we feel betrayed. (Click!) Dr. Vargas Sánchez explained it well in his papers contrasting Agency and Stewardship theories; if the principal and subordinate actors do not enter the contract with the same mindset - ergo agent or steward - then one party will feel betrayed. When both parties inter the contract with the same mindset then neither will feel betrayed; however, organizational performance can only be maximized in the empowered society created by stewardship invoking activities.
A clear or concise definition for stewardship theory has been lacking for many years. This is because all stewardship theories are described as infantile in their nature as they were wholly dependent upon comparison to agency theory as a base line for understanding them. In actuality the reason why it's difficult to define stewardship is the same reason it’s difficult to describing freedom. Agency theory's all impose measurements as controls. Since the same measurement systems are what are used to attempt to describe all other theories, we can only use these controls to indicate congruence or disparity between the two theories. So with the new theory, a new referent is required. That means we are not comparing apples to apples when we contrast stewardship and agency perspectives.
The stewardship model is based in the premise that the number one product of any organization is the people which it releases upon society. Stewardship is a fully scalable model allowing empowerment of the individual to control and direct their own destiny, be it grand or minuscule, within or without any organization. There are five elements which are required to define a stewardship. (These same five elements must be present for work to be accomplished and reported in any organization, but the presence of all five embodied in one individual position is anathema to agency theory.) The instance where all five elements are present simultaneously can be charted and demonstrated as the only portion of the task that can be fully completed by the subject entity. These elements are tasks, tools, training, authority, and accountability. In addition to elements there are also conditions which must be present in order for a stewardship to truly exist. Key among these are three expectations: permanence, which is essentially the understanding that the entity fulfilling this position will remain there for an indefinite period of time with a will to remain in that alignment; alignment describes a condition of confluence of expectation and purpose between principal, superordinate, and subordinate; expansion indicates a drive to create or do more than one is capable of at any given point of time. (CLICK!) Stewardship is a relationship based in mutual trust. Even with the new baseline, we still must deal with existing structures. As such, I will demonstrate first perceiving the existing stewardships within traditional agency organizational structures.
Tasks provide the context for measuring the rest of the elements of stewardship. A task is a piece of work assigned or done as part of one's duties and is a function to be performed that is an objective. A task is a piece of work that one must do, or a well-defined responsibility that is usually imposed by another. In this model we represent tasks as a box as this is a very recognizable symbol as in &quot;thinking outside the box&quot;.
A tool is a device used to perform or facilitate work. It is something which is regarded as necessary for carrying out one's occupation or profession. Anything used to accomplish a task or purpose is a tool. This includes mental models, learned perspectives and thinking, physical things such as wrenches, or natural talents.
Training means to make proficient with specialized instruction and practice. These are activities which lead to skilled behaviors. Training can be viewed as the charging force or energizing force of the worker. No tool can be employed properly without the knowledge of how to use it.
While Authority is the power to act that is officially or formally granted, it is based on the perception of rights and privilege. It should be noted here that authority is often withheld as a means of control. When the perception exists that the authority is not backed by the principal or superordinate the containing entity's power is weekend. The continual reliance of any entity imbued with authority upon superordinate power to maintain position or institute threats substantially constitutes abuse. Authority, as constituted in this stewardship model, is non-derivative and centrally aligned; it is concurrent with purpose as well as with tools and training.
Accountability means that the entity is answerable or has responsibility to someone (whether that someone be an individual or an organization) or for some activity. In this stewardship model, accountability is the bi-directional flow of information through actions, processes, and means of communication involved in soliciting and receiving instruction as well as soliciting and reporting on a stewardship implementation. A key phrase to describe this is, &quot;do ‘X’, then return and report.”
When we combine our tasks, our tools, training, authority, and Accountability the point at which these overlap defines our stewardship. What we need to do is expand our stewardship by using and increasing our tools, training, authority, and accountability so that they are sufficient to encompass the tasks that we have been assigned. The lack of congruency of stewardship elements creates a situation where multiple persons are required to accomplish a single task, as on person has the tools, another may have the training, another the authority to act and yet another the accountability for the processes and the implementations. This is partly by design; the control structure is in place to prevent any one person from gaining sufficient access to do damage to the organization. It also retards the ability of the individual to perform for the organization and actively anticipate and fulfill needs. It is often the case that the person having any one element will change depending on the situation in which the task must be performed.
So far, we've illustrated the measurement or the existence of stewardship within an agency theory derived organization. Watch what happens when we build a stewardship instead of measuring it against the norm. Remember, we measure a stewardship based upon the targets task or task grouping. But to implement any stewardship we start differently. We first define the tools and make them accessible to the steward candidate. The tools must be sufficient to fully accomplish the targeted task. (Task is not yet assigned) We next provide concentric training in the proper implementation, use, and application of these tools. All training must fully encompass the tools which we make available to the candidate. When the candidate can demonstrate proper application of tools and training, authority is granted to use the training and tools within the confines or known boundaries of the organization; the unique caveat exists that the candidate will use the tools and training for their own improvement as well as, but never in abuse of, the organization. (Remember: #1 product of any organization is the people it releases upon the community.) Almost concurrently with the granting of authority we require accountability. This means that the candidate is subject to censure, correction, and other general questioning about their use and employment of the tools and training and authority which they have been granted. Accountability is an express lack of controls on the manner in which the tools, training and authority are employed by the candidate with the burden for consequence resting fully on the candidate. Inherent in this accountability is acknowledging that the candidate must seek appropriate manners and methods of elemental applications in both personal and organizational progression. Only after the primary elements of stewardship are in place and aligned are tasks imposed or specifically required of the candidate. At this point measurements can be made to determine whether the candidate can appropriately employ all the elements for the tasking required. If the candidate shows themselves unable to fulfill the stewardship then the first priority of the organization is to determine what stewardship can be fulfilled by this candidate. If it is determined that the candidate cannot fill any stewardship for this organization the candidate should be immediately released so that they can find something more fulfilling for themselves. It would be unwise, for both the organization and the individual, to attempt to hold the candidate in a position that would be detrimental to themselves.
Where the candidate shows that they are capable of filling the measure of the stewardship which they currently have they will feel a certain exhilaration in purpose and begin to strive, to stretch and grow emotionally, personally, and professionally. The requirements of the superordinate at this point is to empower the subordinate. Empowerment is the incremental and directed expansion in order of application of the elements of stewardship. The process is first to target the tasking that is desired for increased duties. Then to provide access to the tools, followed by training, followed by the authority to act upon the tools and training, concurrent accountability and lastly task imposition. Notice that empowerment takes place by an ordered expansion of stewardship elements, not a promotion. Agency theory dictates first the imposition or addition of tasks upon the candidate and then requires that they fill an the needed elements for success.
Targeted Empowerment is more akin to the classic “promotion” in that it is a change in core tasking rather than an expansion centered in the original tasking. Targeted tasking, though, can be in any direction; deeper, shallower, lower, lateral, or higher. The process, however, is the same. Identify the tasking without imposing it. Empower tool access. Train. Grant authority. Require an accounting. Impose tasks. Presto-chango! A new stewardship is born.
Leading from the center, the manager only need provide some initial rotation (empowerment) and then allow the gears to work. The manager, then can manage the procedures, processes, systems and situations. The manager facilitates the work, providing the materials and opening routes to success.
As an organization evolves the inherent flexibility and scalability of the stewardship model creates a dynamic and fluid structure which allows the organization to adapt quickly to regulatory and marketplace changes. The basis of trust that is integral to the stewardship model empowers organizational rapid deployment for innovations without fear of reprisal for experimentation. Because of the high levels of transparent trust there is an absence of measures-as-control and checks-on-power allowing the organization to simultaneously be flexibly adaptive, lean, efficient, and effective. The structure allows focus to truly bare on what the market will want, allowing the organization to lead their industry. Instead of keeping up with trends, the organization establishes trends. As the leader in emerging markets the organization can strategically position themselves more powerfully in the market and achieve explosive growth through blue ocean tactics. While agency theory dictates read ocean tactics and strategies, “blue ocean” creation can only be achieved through the freedoms of the stewardship model.
This is not to say that any organization that is currently exercising &quot;X&quot; theory, agency theory, or red ocean tactics is doomed with no hope of salvation. The intrinsic flexibility of the stewardship model allows for the metamorphosis of the organization by identifying individuals with natural tendencies for stewardship candidates. With the infusion of hope, energy will return; with Faith, action. Where empowerment is given, vision will take hold and Freedom will be explored. As the new thoughts and processes Sare inserted into the company consciousness healing can take place. Similar to a bone marrow transplant, we only need to put enough healthy material back into play. The ocean may not part, but it will move from scarlet, to violet, to vibrant indigo – and the products released upon society will be truly productive in all aspects of their lives.
Using the descriptors of tasks, tools, training, authority, and accountability along with permanence, alignment, and expansion we can see that stewardship creates nonlinear cycles. Try to imagine the various manners in which a parent would keep their child safe. We can lock them in the house. We can fence them into a yard. Or (and this is the most difficult and time consuming, but the most productive) we can teach them what the house looks like, how to cross the streets, how to call on a telephone, and how to find the way back to the house. We have been conditioned to set boundaries; such as state lines and country borders. While we know these measurements are not absolute, we are conditioned to see them as the control.
Each GAP between stewardships causes a loss or the lack of gain (loss of opportunity for profit) the lower in the ranks eg from ceo to line worker the less the loss per gap but the more gaps there are. The higher the gap presents it self in the hierarchy the greater the loss but they are fewer. The remedy would indicate a lean structure, with fewer intermediaries between the top and line. A gap on the line will have a (guesstimate) aggregate loss of $200 per incident at the lowest level from the ceo and increase by a factor of (Guesstimate) 1.5 for each level it moves up if there are five levels between the ceo and line then it will cost 675 at the ceo-1 level or 200 * 1.5^(levels between ceo and line) Loss per gap = g Factor of increase per level = a Number of levels between line and gap level = m Base or line level = b Number of gaps = n Profit Opportunity lost = p p=n*(g*a^(b-m-1)) **Need to find some way to quantify real numbers, not stuff plucked from the air.
Cultural Model for Stewardship in the Workplace Copyright 2010 Drew A. Stark All Rights Reserved.
Two Prevalent Theories <ul><li>Agency </li></ul><ul><li>Personal </li></ul><ul><li>Short term </li></ul><ul><li>Parasitic </li></ul><ul><li>Conflict w/in org. </li></ul><ul><li>Limit action </li></ul><ul><li>Mature </li></ul><ul><li>Predictability </li></ul><ul><li>Stewardship </li></ul><ul><li>Organizational </li></ul><ul><li>Long term </li></ul><ul><li>Symbiotic </li></ul><ul><li>Synergistic </li></ul><ul><li>Inspire action </li></ul><ul><li>Undeveloped </li></ul><ul><li>Intractable </li></ul>
Agent Governance <ul><li>Assumptions </li></ul><ul><li>Interest Divergence </li></ul><ul><ul><li>Personal Utility over organizational goals </li></ul></ul><ul><li>Control Structures </li></ul><ul><ul><li>Severance package </li></ul></ul><ul><ul><li>Vesting of assets </li></ul></ul><ul><li>Conditions </li></ul><ul><li>Expectations of: </li></ul><ul><li>Transiency </li></ul><ul><ul><li>Self-centric relationship </li></ul></ul><ul><li>Isolation </li></ul><ul><ul><li>Mistakes to manager and down </li></ul></ul><ul><ul><li>False Adulation </li></ul></ul>Relationship devoid of mutual trust
Congruency of Choice Agency Theory VS. Stewardship Theory – Prof. Dr. Alfonso Vargas Sánchez Universidad de Huelva (Espa ñ a) – Departamento de Dirección de Empresas y Marketing