He was poised for a beautiful career at ABN Amro, but his discontent with the bonus system kept growing. So Kilian Wawoe broke with the bank and was left empty-handed. But not for long.
In January 2010, the media caught wind of the news of a well-positioned person at the bank attacking the bonus culture. For the public it was business as usual, but for Kilian Wawoe it was a difficult period. He had said farewell to ABN Amro without a new position to go to, his second child had just been born and his wife was unemployed as well. That was very unlike him, as he had always played it safe in the past. The Vrije Universiteit alumnus with a PhD. explains how it came to that point, and how everything turned around for him in the end.
In 1999, you joined the banking world as a trainee at ABN Amro. Was it soon thereafter that you began to feel dissatisfied? “No, I really enjoyed it. I thought it was a great company with a fun culture. We had lots of freedom. And they invested in their employees: we were able to take all kinds of training courses, and my HR training lasted 9 months.”
How did you become interested in performance compensation? “At my first job, I was the head of recruitment and selection for academics. There, I asked myself: what predicts whether someone will be a good employee or not. The answer is of course the holy grail in my profession. I had studied Social and Organisational Psychology, and I wanted to do something with that knowledge. So I went back to my alma mater, Utrecht University to see if we could conduct research on whether our selection procedures really worked. I eventually went on to earn a PhD. at the Vrije Universiteit. I was surprised by the results of the study, where I examined a variety of ways to measure performance in order to determine what makes a good banker: realising targets, one’s own opinion of their performance, the supervisor’s opinion or the bonus. I thought that performance measurements all came down to the same thing, but it was quite different: you mainly get a higher bonus if you meet your targets. Strangely enough, the supervisors often said that that wasn’t the same thing as good performance. After all, work is more than just meeting targets. So the compensation system doesn’t work.”
How did you end up breaking with the bank? “I had to pay out millions at the Zuidas, but I increasingly realised that doing so wasn’t effective. I wanted to put my academic knowledge into practice, but nobody wanted to listen. So I noticed that there is a deep chasm between research and practice. That understanding came only gradually. And then came the crash of 2008, when Lehman Brothers and ABN Amro needed to be bailed out, but still no one acknowledged the problem. That was the straw that broke the camel’s back. I tried to start a discussion, and I told the Volkskrant what I thought about the situation. I was almost fired right then and there. After a year or so, I realised that no one wanted to talk about the problem, so I left.”
Did you have a network that could help you find another job? “Absolutely not. I didn’t have a plan. I didn’t have anything. I spent the first few months completing my dissertation. A while after that, someone from my dissertation committee asked if I would be willing to give an HR course at the Psychology faculty. So I did that as a freelancer. I received good student evaluations, and as the publicity around the case continued a lot of students wanted me as their tutor. I gradually started working more, and in 2011 I got a contract for a 50% appointment. I am very grateful to the Vrije Universiteit, because I was a kind of academic refugee.”
What do you do in addition to your work at the Vrije Universiteit? “I want to close the gap between academia and the real world in my profession, Human Resource Management. I give a lot of lectures and help companies to improve the performance of their organisation by means of the latest scientific insights.”
Have your attempts to do something about that gap had an effect? “I don’t get to visit Dutch banks, because I’m persona non grata there. And yet, something has been done. ING, Rabobank and SNS have all changed their bonus cultures. Other companies and foreign banks call me to ask how they can improve their employees’ performance in a way that does work.
I see that the Dutch economy has become ossified. In Brazil, Africa and Central Europe, people are much more open to new ideas. In the Netherlands, people are fixated on the recession, and there is no room for innovation.
Unfortunately, my many media appearances hasn’t had much effect. The media mainly want to focus on the conflict. They don’t want to hear about scientific insights, just about my experiences at the bank.”
‘The universities are following the banks’ example: targets are becoming too important’
In the future, do you think you will have to choose between your work at the university and the business world? “It’s exactly the combination that makes my work so enjoyable. At the Vrije Universiteit, I stay up to date about the latest insights. The Vrije Universiteit has a good reputation and is known as a quality university. In fact, the outside world in general has a lot of respect for universities. So the fact that I work at the Vrije Universiteit helps me to spread my message.”
And apparently, you do your work at the Vrije Universiteit well, because last year the students named you Lecturer of the Year. “In fact, I received the award for my department first, and then for my faculty, and now for the Vrije Universiteit as a whole. That was an emotional moment, because it confirms that it was a good decision to start lecturing.”
So all’s well that ends well? “Not entirely. Just like the banks, the management at the university could be done better. Here we see that the target system is on the rise. Student evaluations and the number of publications are becoming increasingly important. But a good lecturer doesn’t have to be popular, and a single thoroughly researched book that someone spent five years writing can be better than 10 publications.
The art of good management is that the output should be the starting point for a discussion about quality, not the final word. An academic article always has a discussion and a conclusion after the description of the results; the results are not the output. Academics are all trained to know that figures should never be taken to be the raw truth. And yet we don’t have that discussion here.”
What could we do to run banks and universities better? “In theory, we already know the answer. One of the things is to have a constant feedback loop, just like the body constantly monitors its own temperature and adjusts it as necessary. If we had asked bank employees the right questions in 2005, we could have seen the recession coming. We knew that we were taking on too much risk, but the only thing we were asked was whether we were satisfied with our work. Being satisfied wasn’t the problem. The same thing applies to universities: everyone knows that we focus too much on money and publications and not enough on students.
We are working on a system of constant feedback within organisations, in which employees can state when things are going wrong. That is part of the solution. You could compare it to parenting. Parents have to give their children enough freedom to do things their own way, and then give feedback on what they thought about it. You can’t tell them what they can and can’t do all day, and you can’t leave them unsupervised for days at a time.”
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