Changing the Perspective of Government

CONTEXT

PROJECT BRIEF AND SET-UP

RESEARCH METHODOLOGY

Owners and/or Workers

Should the research involve only the small business owners and operators, or also the workers?

Empathy knew that BG exists to support and influence small business owners and operators. Further, wider government believed that owners and operators are in the key position to push and pull productivity levers. In that way, it might seem better to focus limited field time on owners and operators, as that is where government believed it could have the most impact.

On the other hand, only looking at the bosses in an organisation leads to seeing the productivity of the business from only one angle. The workers may have a different view of productivity — different mindset, different behaviours, different motivations — and that different perspective might lessen the impact of the owners’ or operators’ approach.

Empathy’s view was that, in order to create appropriate interventions, they needed to understand the topic of productivity in a small business from different viewpoints within the business. By understanding productivity from the employers’ and the workers’ points of view, Empathy could see small business productivity more holistically and more genuinely. Empathy chose to involve both the owners /operators and the workers of the participating small businesses.

Ignore or Observe Macro Forces

Should the research specifically seek to identify macro forces and mitigations at play at the business level, or politely ignore the prevailing thinking to take a genuinely fresh look?

It was clear to Empathy that wider government believed that addressing macro-level forces was critical in a small businesses’ productivity. The suggestion from wider government and BG was that macro-level causes of productivity could be identified at a business level, and corresponding business-level interventions created.

In an early project document outlining the “current view of relevant research and professional literature,” BG had highlighted some areas of productivity that Empathy might like to observe in the field, based on macro-level forces.

The knowledge shared in this document will enable Empathy’s field observations to be associated to the relevant firm level and macro problems. If we can categorise the observations like this, it will be beneficial, as the solutions to address macro problems are well documented. Ideally, these collective understandings will help BG to enable businesses to adopt more productive practices.

However, later in that document, BG was careful to note:

If some of these questions don’t align with the project brief, please don’t change your approach to this project significantly based on the questions below. Again, they are just a way for BG to illustrate current knowledge, and lack of, we don’t expect field findings to cover all these questions specifically.

Further, Empathy and BG had subsequently agreed that Empathy would take an ethnographic approach that provided an understanding of productivity from the small businesses’ point of view.

Empathy had agreement in principle to step away from the prevailing approach of wider government and academic theories of productivity. But Empathy also knew that the agreement for this approach was tentative. The client was skeptical that the approach would result in actionable insights, and were proceeding on good faith underpinned by relationship history. Further, Empathy and BG would still have to ‘sell’ the research findings and intervention recommendations to wider government, who were focused on macro-level forces.

Additionally, Empathy was nervous that, given wider government’s prevailing belief that strong macro forces negatively affect small businesses in New Zealand, recommendations might be limited to the kind of interventions associated with macro forces that BG had already imagined. The research team wondered if seeking observations that could be associated directly to macro forces would help to reduce risk of the ethnography surfacing no actionable insights.

On the other hand, the Empathy researchers worried that specifically seeking observations that could be tagged in that way would distract them from gathering information that would enable a true and holistic understanding of productivity in the small business. Worse, it might make them assign more importance to observations than warranted given the businesses’ point of view.

In that way, rather than providing a safety net for the research, mindfully seeking instances or absences of actions related to macro forces could negatively impact the research.

Empathy decided to remove the possible safety net, and have faith in the research approach that they had advocated for so strongly. As the Empathy project lead declared at the time, Empathy decided to “trust the power of agenda-less ethnography.” If macro forces came up in the field, Empathy captured them. But they didn’t go looking for macro forces at play.

Research Activities

In preparing for the field, Empathy tried to understand the field of productivity a little more, before putting that learning to the back of mind. They conducted desk research and spoke with government productivity experts to learn what topic areas to consider when observing and conversing with owners and employees. Empathy also spoke with a government-approved advisor to small businesses to gain another perspective on the context of small business productivity. They wanted to understand what advisors were telling small businesses when it comes to productivity. Are they telling them it is a good thing? How are they communicating benefits? What methods are advisors recommending for productive environments? The advisor also provided the researchers with an understanding of the language used when he spoke about productivity with his small business clients. How was he defining it?

Although Empathy only spoke to one advisor, it helped Empathy frame their research conversations and provided a little more context. Empathy obtained a good indication of what one government-trusted advisor sees in the many businesses he advises. In that way, speaking to the advisor helped the client to feel better about Empathy ‘only’ engaging with five small businesses.

Empathy conducted field research with five small businesses. The businesses came from different industries — agriculture, production, professional services, retail, and food and beverage — and had between 0 and 20 employees. Within each business, a single researcher conducted multiple activities over the course of a single day.

Observations – One Empathy researcher observed each business for two hours. The observations primarily occurred without any conversation, but included some moments of participation. In a few of the small businesses, Empathy was able to understand processes more fully by being a part of them.

Observations gave Empathy an opportunity to:

• experience the productivity mindsets of the small business
• witness systems, processes and tools as they relate to productivity, eg those that increase/decrease staff engagement, those that help staff to understand their tasks and schedules, those that add/remove idle time
• observe the interpersonal relationships between co-workers, and between employers and their employees
• pick up on context before delving deep into conversation.

Conversations – One Empathy researcher conducted semi-structured conversations within each business. In total, they conducted 12 conversations with operators and employees. Each conversation lasted about an hour.

Field reports

The Empathy lead was prescriptive about what each researcher should include in the field notes and subsequent field reports. In this project, the three researchers varied in background and research experience. The project lead recognised that some researchers might lack structure in their approach. She wanted to create a checklist of things for each researcher to collect, so that each brought the same types of information back from the field and into the analysis phase. Before the fieldwork occurred, she set and communicated the structure of the field reports. In that way, the report structure supported the researchers in the field alongside the observation guide and conversation guides.

During the fieldwork, each researcher took notes and made drawings. Field notes included:

• chronological shorthand — this happened, then this happened…
• sketches/maps of the environment
• networks/maps of movement
• storyboards of activities
• photos of space.

Later, the researchers turned their notes into field reports. The field report for each business included:

• narrative descriptions of the observation
• diagrams or pictures of the environment from the observation
• collateral material gathered from the business, eg policies, procedures
• whole passages of direct quotes from conversations with those in situ
• additional observation data from conversations—body language, noticed reactions, etc.

Each field report was five to 10 pages long.

Field reports

ANALYSIS OF RESEARCH FINDINGS, DEFINITION OF MEANING

Research Findings

In light of the original focus of BG and wider government, the findings were interesting. Specific findings are confidential and the intellectual property of BG. However, we discuss what Empathy found relating to the prevailing view of wider government, and how these findings shifted BG’s perspective.

Empathy were able to explain how small businesses defined productivity. Wider government suggests that productivity is how efficiently an organisation can turn its inputs, such as labour and capital, into outputs in the form of goods and services. That is, the amount of output (products, services) a business can produce given its resources. In contrast, small businesses define productivity simply as the amount of work they can do. One small business owner explained that he feels productive “if I can get through my to-do list.”

The amount of resource spent to create the output is a key feature of the government’s definition. It is notably absent in small businesses’ point of view. Small businesses considered output, but not in comparison to input. This wasn’t simply about discounting family or personal labour. In fact, the small business did not discount labour, or no more than in a larger business. Rather, Empathy found this was a fundamental difference in the definition of productivity. Government thinks of rates, small businesses think of amounts.

Empathy showed how the small businesses approached productivity — by both their own and wider government’s definition. Empathy showed what approaches and actions they took, when and why. Importantly, very few of these actions related to the macro forces BG so strongly noted. Rather, actions were grounded in low-level everyday activities that ensure business survival, such as fulfilling an order on time given the people working on the shift.

Empathy found that it was not macro forces standing in the way of small business productivity. Rather, owner / operator practices are responsible. The owner / operator prioritised speed over efficiency and immediate results over long-term benefits. Put another way, urgency won over importance.

That focus on urgent tasks over important tasks perhaps is not surprising, given that small business owners / operators are often busy and understaffed, and therefore reactive. Further, many small business owners have the skills and experience to do the job. They find it easier to just do it themselves, rather than to train or explain it to someone else, and are happier with the quality and outcome. This finding was important given the government’s initial focus on macro forces. It meant small businesses could significantly improve their productivity through improvements in basic management, leadership, workforce planning and processes unrelated to macro forces.

Empathy did find some macro forces at play in the small businesses they researched. But small business did not experience these forces in the way BG imagined. Small businesses were aware of some macro forces. However, either they did not perceive those forces as a problem, or did not believe they could do anything about them.

For example, government views a lack of competition as a barrier to improving productivity. They want more competition and behaviour that is more competitive. However, the small businesses Empathy researched like that they have few direct competitors, and enjoy thinking of their indirect competitors as friends with whom they can bond and learn. Some also think of direct competitors as collaborators or at least friends. As one owner said: “We’re a community. It’s good to talk to people in your industry. We’re competitors, but we don’t see it that way.” Some owners seemed proud of this situation, as they believe it reduces stress for themselves and their employees.

This way of seeing competitors is not necessarily wrong or counter to business success. Empathy knew from previous work with other areas of government that many recognise the value of strategic collaborations within industries and within supply chains. However, for this project Empathy’s clients and stakeholders saw competition as a force that spurs businesses to do better with the resources they have. These stakeholders lamented the lack of competition, saw it as productivity reducing, and wanted to know what small businesses were doing about it. Finding that small businesses are unconcerned by the lack of direct competition, and co-exist with indirect competition, meant that BG did not have a ripe audience for wider government’s intended messages.

Perhaps most importantly, Empathy found that small businesses were not particularly interested in increasing productivity — at least, not in the way the government hoped. The government wants businesses to increase their output in a way that minimises input. Ultimately, government wants increased productivity to lead to increased GDP (gross domestic product). They want the country to earn more from the resources used, so the boosted economy can drive better social outcomes. However, the small businesses motivation is not to increase output, but rather to reduce input. As one owner said: “I don’t believe in growth for growth’s sake. There’s an expectation that bigger is better, but I’m not 100% driven by money.”

In fact, in response to Empathy researchers’ direct questions, some small business owners / operators stated that they did not want to increase productivity. They thought increasing productivity ran counter to their personal values of ensuring work-life balance and a stress-free work environment. To them, being productive means working your employees too hard. One owner noted:

I’ve never been a manager to crack the whip. I want the leisurely aspect [of the job] to be something they enjoy so they give me loyalty and are happier towards customers. The idea of being hyper-efficient is an enigma to me in some ways. I could do many things different, but can’t be bothered. I won’t stick a duster in someone’s hands.

These findings show that small business and government do not agree on the meaning of productivity. For government, productivity has positive connotations; it is about efficiency. For small businesses, it has negative connotations; it is about driving people harder to get more.

These learnings were important for BG and wider government to know. Rather than small businesses being hungry to increase productivity, government did not have a willing collaborator in their mission. Rather than small businesses not recognising macro forces working against them, small businesses welcome some of them like limited competition. Rather than being excited about finding ways to mitigate the effects of macro forces government perceives as negative, small businesses do not see the point of implementing changes given more pressing day-to-day issues. As one small business owner said during the research: “As a small shop in New Zealand, it’s not worth it trying to pretend you’re Amazon.”

Once again, Empathy found itself working to shift their client’s perspective. This time, about what productivity means to small businesses in New Zealand, and why that perspective is important. Empathy needed to consider the best way to communicate that story to their clients.

Decision Crossroad: Mindsets

Popularised by Carol Dweck (2006), ‘mindsets’ refer to the established set of attitudes and beliefs someone holds. Empathy had previously successfully delivered mindsets to BG as part of design research deliverables. Because of that success, BG requested mindsets as an output of the productivity research. Some of the Empathy team felt uneasy about the creation of mindsets on this project. One team-member suggested that mindsets often give the impression of a total set of perspectives. That is, the mindsets outlined are all of the mindsets in the population, or at least the prevailing ones. The team member argued that Empathy should only give that impression if they were confident in its truth-value.

As predominantly qualitative researchers, Empathy seldom seek to understand population variation. But their research findings are often taken to be generally applicable to the population to some degree of scale, largely because they usually involve larger number of participants, typically 20 to 60. In such cases, the project team member had more confidence that the mindsets they observed were representative of the population.

On this project, Empathy ‘only’ engaged with five small businesses. Was it right to suggest a set of mindsets exist across New Zealand small businesses as a result? Was it even possible to identify mindsets from such a small sample?

In the project, this moment was less of a decision crossroad than it perhaps should have been. BG asked for mindsets. Empathy felt uneasy but entertained the idea. As they worked through the analysis and definition phase, Empathy began to see some useful mindsets emerge. By the end, they felt comfortable with the idea of pulling out summary mindsets. And so, that is what they delivered.

Empathy took an inductive reasoning approach. They did this by looking at their data set and determining similarities and differences throughout. They came up with qualities and key language that varied between the businesses and began to group them. Four mindsets emerged, sitting on a two-by-two. That is, the interaction of two axis, giving rise to four quadrants. Naming each mindset was the final step. Naming at the end of the process was important, as the qualities of the mindsets needed to become apparent before their classification. It allowed the team to consider what the mindset was before labelling the mindset or those with the mindset. As consultants, Empathy recognises the value of analogies to underpin mindsets. In this case, Empathy referenced the types of students many remember from high school to label the mindsets.

Sharing Work-in-Progress with the Client

Empathy always shares initial findings and meaning with clients. They do so at a point when the insights are becoming clear and the direction of recommendations are forming. Sharing at this point allows clients to learn from the research, ask questions that researchers can then reflect on, and provide input into recommendations to ensure they suit the clients’ organisation and goals.

For the researchers, sharing with the client felt like a big moment. Empathy knew BG trusted them to decide a research approach, but that they were also skeptical of a move away from a focus on macro forces.

Empathy shared some of their work in progress in their typical low-fidelity way, with a Post-it note presentation in their studio. The BG project champion attended along with one colleague.

RECOMMENDATIONS FOR THE CREATION OF TOOLS AND RESOURCES

Buoyed on by the success of the work-in-progress presentation and discussion, Empathy progressed to establish recommendations for the BG product.

BG’s original intention was to raise awareness of macro level forces, and to suggest meso-level ways to overcome those forces. That is, policies, procedures, rules and guidelines that directly relate to macro level forces. Empathy’s research showed that raising awareness of the macro forces would not significantly change small business owners’ mindset or behaviours. Further, Empathy’s research showed that the meso-level interventions BG proposed were too sophisticated for the majority of small businesses. For example, targeting employees from a global innovation frontier in medicine, such as Boston USA, was not an effect approach to new technology adoption.

Instead, Empathy suggested more accessible meso-level mitigations and some micro-level aids, not directly related to macro forces. In general, these related to:

• Shifting misconceptions about productivity, by showing small business that productivity practices aren’t counter to human values, but rather a means to realise them — ‘be more efficient so you don’t work people so hard’.
• Engaging owners looking for quick-fix reactive solutions to issues where they have been inefficient in the past, and guiding them to a more proactive approach — eg ensuring a new member of staff understands standard operating procedures before being left to get on with the job.
• Supporting those who are interested in productivity but are not yet knowledgeable or equipped. Providing guidance, best practices, tools and hands-on activities in key areas that impact productivity regardless of their link to macro forces. Being their guide as they explore and hone practices that work.

Specific recommendations included an online assessment, online course, worksheets, templates, and educational content. Empathy also made clear recommendations about language and tone to use when talking to small businesses about productivity. For example, taking into account that productivity is a dirty word for many small businesses.

EPILOGUE: PROJECT OUTCOMES

REFLECTIONS FOR EMPATHY

A Cultural Basis

Empathy provided 10 key findings from the research, almost pitched as insights. They also provided four mindsets. From there, they moved straight into recommendations for interventions, tools and resources.

In documentation and initial delivery presentations, they did not discuss the cultural basis of those findings or mindsets. However, the culture of New Zealand businesses makes a lot of the findings almost obvious in hindsight. As Empathy presented the findings, they often found themselves saying things like: “That makes sense, given the way New Zealanders…”

Empathy wonders if it would have been good to discuss cultural underpinnings of the findings as part of their delivery. These underpinnings were discussed within the team during the analysis and definition phase, in an offhand way. But the team didn’t deeply discuss them or consciously pull them through into the delivery of the findings.

It is interesting to ponder whether the cultural basis of the findings might have made Empathy’s results more impactful for wider government, particularly in the long term. Or, whether it would have weakened the results, as people often don’t feel that their own culture is worth narrating.

In some ways, the inclusion of cultural basis would have crowded the story in the document, and might have distracted from the important findings and mindsets.

It is also worth noting that the project budget probably didn’t allow a full exploration or description of cultural underpinnings alongside the creation of mindsets.

Ethnographic Approach

As Empathy established the research approach, they were faced with a few decision crossroads. How do they feel about those decisions now? Has this project influenced the way they’ll proceed in the future?

Research focus – Empathy argued strongly for an ethnographic approach that enabled an understanding of productivity from the small businesses’ point of view. They did not want to focus on macro-level influences.

Empathy would do this again. Hopefully always. It isn’t always easy to keep the widest possible research focus, especially when non-researching clients want to collaborate on your research brief. But Empathy believe this is worth fighting for, and will nearly always be the right thing to do for the project.

Deep or wide – Empathy opted to go narrow and deep. That is, to have deeper engagements with a smaller number of participant businesses.

Considering the project in hindsight, Empathy’s project lead commented: “I personally think it’s always right. But that’s just my style.” In that way, she always favours deep over wide and will continue to after the success of this project.

Owners and/or workers – Empathy chose to involve both the owners/operators and the workers of the participating small businesses, even though the client was focused on owners/operators.

Empathy would take this position again on this project, and on future projects. They always favour understanding a target group’s issue from the angle of all of those who contribute to the issue. It also helps to provide another lens to the target group’s handling of that issue.

Ignore or observe macro forces – Empathy decided to not specifically seek to observe macro forces at play, but to capture observations related to macro forces as they arose organically in the field.

Empathy would make this decision again on this project, and will advocate the approach in future projects. Removing the narrow focus reduces the risk of artificial results, and of missing something important in the wider context. But noting specific topics or forces at play as they arise does not get in the way of the bigger research focus.

Emma Saunders Emma is co-founder of Empathy. She has a PhD in psychology, and her background weaves together people-based research with business experience in design and innovation. Emma helps organisations to focus their solutions around the significance of human value within an economic system.

MaiLynn Stormon-Trinh MaiLynn is a writer and design researcher who balances imagination with perfectionism to explore and refine ideas. She draws on her aptitude and love for fieldwork and research to tell true stories well. MaiLynn’s work in communications for non-profits on four continents has helped hone a highly engaging and empathetic writing style.

Stephani Buckland Stephani was a research and innovation lead at Empathy. She has a Masters of science in design ethnography from the University of Dundee. Stephani is a design research specialist, whose work identifies the needs, motivations and behaviours of consumers within the context of individual cultures.

NOTES

Acknowledgments – The authors acknowledge BG and New Zealand’s progressive customer-centred public sector.