Principle 7: Enthusiastic People (Item 2)
Potential of an organization is realized through its people's
enthusiasm, resourcefulness and participation.
You should form an alliance partnership with your employees –
each party working for the benefit of the other.
A partnership relationship is very, very different from the traditional
adversarial relationship between employees (and their unions) and managers.
Do employees in adversarial relationship with a company still volunteer
enthusiastically to do what is best for that company?
Like it or not, employees and management should be in a partnership
to do the best for the company. If either party thinks otherwise and
works against the other or against the company, there might not be a
company to work for in the future.
If you like, you can be very hard-nosed about this. You can consider
your employees as suppliers. Employees supply their time, energy, knowledge
and experience so that the company can make money.
Just as you should for all of your other suppliers, you should establish
partner relationships with your employees to ensure the quality
and level of what is supplied is satisfactory to the company. This means
that you have the same types of partnership obligations to your employees
as you have with your external suppliers. In the case of employees,
the supplier is part of your company.
Taking the position that the company and its employees are in a supplier
partnership establishes that there are considerable obligations for
both partners, as there are in all partnerships.
- On its part, the company must show it cares about its people.
- The employees' obligation in the partnership is to volunteer their
enthusiasm and resourcefulness.
Before we go any further down the path of how to turn your employees
into enthusiastic volunteers, let us pause and convince ourselves that
it is in the company's best interest.
In the mechanistic, industrial world, people were treated as redundant
interchangeable and disposable parts. In that world, the boss needed
robots that could do repetitive tasks without thought. The world has
changed. Technology has changed all that. Now, the workplace is so complex
that we cannot have the boss making all the decisions.
From a purely practical viewpoint, the boss cannot be everywhere or
involved in all decisions. The boss would be an unnecessary bottleneck
if all decisions had to go to him or her. And, as we saw in Principle
4 (`To Improve the Outcome, Improve the System'), the boss does
not know as much as the staff about what is going on, and as a result
his or her decisions are not always good ones. Companies find that they
must spread the decision-making load.
In order to have this happen effectively, people must be trained and
educated to be multiskilled and allowed to be flexible so they can be
involved in the management of their work areas.
We can certainly tell the difference between a world class manufacturing
plant and a traditional company. In the world class plant, much more
authority and responsibility is given to the shopfloor operators and
supervisors: for the quality of their own work, for scheduling the production
cells, for team composition, for hiring and firing and for customer
satisfaction levels.
We shall see in Principle 8 ('Innovation') that some companies are
attempting to define in dollar terms the value of employees' knowledge,
resourcefulness and creativity and how this translates directly into
earnings.
This is a radically different to thinking of people as just a cost
in the financial reports – interchangeable and disposable.
In Principle 8 (`Innovation'), we will see the importance of
knowledge and learning. The capacity for company to increase its intellectual
capability represents the new capital for companies to sustain
themselves successfully in this era of sophisticated information systems.
People are the source of that learning and knowledge. Knowledge only
becomes available to the company through the efforts of its people.
Education and on-the-job training are essential to increasing intellectual
capacity.
Carlson found that SAS had to rely on the knowledge, responsiveness
and creativity of its people to solve customer problems. `We can
not rely on rule books and instructions from distant corporate offices.
We have to place responsibility for ideas, decisions and actions with
the people who are SAS during those 15 seconds'.
Employees have a huge wealth of knowledge and learning that they have
accumulated through working. That knowledge and learning is usually
not available to their companies. Employees may withhold it (or not
volunteer it).
Employees are usually not asked to share their knowledge and learning.
It is often assumed they know nothing useful. After all, the bosses
know everything that is useful. Usually, employees receive no training
in how to deliver their knowledge.
That is
- employees must be willing to share their knowledge
- you have to ask (and be willing to listen)
- you must provide employees with skills so that they can share their
knowledge.
Of course, bosses also have a huge wealth of knowledge. The trouble
is that each party, the bosses and the employees deny the validity or
usefulness of the others' knowledge.
A useful thinking shift happens when both realize that the other has
something to offer. When this happens, companies find that the combination
of the employees' and the bosses' knowledge can be very valuable.
In the partnership agreement, the company's obligations include `creating
and maintaining a safe and secure workplace'.
Remember the necessary conditions from Principle 2 (`Focus on Achieving
Results'). The first necessary condition to achieve your Goal is
to "Provide a secure and satisfying environment for employees now
as well as in the future". This `necessary condition' carries considerable
responsibility to not lay people off. Goldratt argues that getting yourself
into the position where you must downsize indicates poor strategy and
lack of care by the owners/senior managers.
This obligation is being broken more and more with corporate downsizing.
It is hypocritical to expect employees to care for a company that demonstrates
it does not care about them. How do you expect employees to volunteer
their enthusiasm for your company when you demonstrate that you do not
care about them and their security? Companies save $2.50 in wages and
salaries but destroy volunteering – and that is a good deal!? Little
wonder that companies now find that downsizing does not work.
Downsizing has been common for the last twenty years. We now know its
is unlikely to bring any long term benefit, for three main reasons.
- Employees stop volunteering their enthusiasm to improve processes
(Why would employees volunteer their enthusiasm to improve processes
when the result of their effort will see them dismissed?)
- Knowledge and often core competencies are lost
- Capability is lost
The temptations to downsize are enormous. For many companies, changes
in their environment forces restructuring and downsizing. Most downsizing
is a result of major changes in products, services, markets, technology,
automation or computerization. Where there is major misalignment between
market reality and workforce numbers or capabilities, survival of the
company may demand radical change. However, ...
Do not consider lay offs as a parachute because of poor cash flow.
It leads to a vicious cycle of lay offs that do not ever seem to improve
profits. You must fix the problem that led to the poor cash flow. Most
often, that is caused by poor throughput because of poor strategy.
Many companies downsize before they undertake to process improvements
to make it possible for the smaller workforce to do the work. The result
is that products and services can't be delivered and customers don't
get what they value. Followed almost always by a downward spiral of
a succession of staff cuts and the eventual destruction of the company.
Shareholders should be very, very wary about companies that promise
they will make more money by downsizing. There is no compatibility
between Principle 7 and corporate downsizing.
| However, we have seen a few examples where
the employees were extremely enthusiastic about the downsizing
– both the employees that stayed and those that left. In
those very few cases, the companies worked to enable their employees
into new enterprises. The picture appeared to be one of caring.
The organization was seen by everyone to care about the future
of people. And was obviously trying to do the right thing by
employees in seeing their needs taken care of. This approach
is very different from the "fire them" approach or
even the "redundancy payment" approach. |
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