3 Principles to Get Workers To Drive Improvements
In the drive to efficiency and operational improvements, would anybody be crazy enough to propose a change that would eliminate their own job? In his latest post on HBR, Brad Power, looks at some companies are spurring on innovation by getting workers to disrupt their own jobs. Here's how they do it.
(First published 7 June 2012 on HBR.org.)
Competition and customer demands mean that the most efficient and effective process should always be sought — but finding it requires contributions from the people doing the work. The benefits of the front-line driving improvements include pride of ownership that sustains the changes, less worry for managers about whether the changes will be adopted, and reduced costs for outside consultants. Changes that are imposed are at best accepted grudgingly and at worst sabotaged.
But a friend was skeptical that workers will identify radical, cross-functional changes to a process that will step on others' turf or could eliminate their jobs. Is it really possible he asked, to create the conditions where workers will disrupt or even eliminate their jobs and the jobs of co-workers? That's a good question. It's not easy, to be sure, but some companies have managed to spur their employees to innovation by observing a few principles.
Principle 1: Protect the Downside - Demonstrate a Commitment to Continued Employment
Consider Wiremold, a manufacturer of cable management systems. In 1992 the company was in cost-cutting mode, and, as former CFO Orry Fiume told me, it was consequently offering an early retirement package designed to reduce headcount. But the company also needed to make its processes more productive, and didn't want employees overly focused on headcount reduction, so immediately following Fiume's announcement, the new CEO Art Byrne told employees that nobody would lose employment due to process improvement activities. He felt this was necessary to encourage employees to identify all the changes the company needed, including those which might disrupt their jobs. W. Edwards Deming, the guru of total quality management, called this "driving out fear."
But most CEOs will strenuously resist making a qualified job guarantee like Art Byrne. Why? Because they believe that nobody can guarantee employment. Notice, however, that Wiremold did not guarantee employment. It assured employees that they would not lose their job as a result of their participation in continuous improvement activities. It didn't say their jobs wouldn't change, or that the company wouldn't lay off people for survival in the event of a major economic downturn, or that inpiduals couldn't lose their job due to poor performance.
In this case, because the productivity improvements helped Wiremold to grow, management didn't have to lay people off when work was streamlined. It was able to redeploy people to other areas where they were needed and then realize the productivity gains by reducing overtime, and allowing natural attrition to gradually reduce headcount. It also brought back work that had been outsourced. By reducing survival concerns, Wiremold had freed people to think creatively.
But what if — unlike Wiremold — your business isn't growing? What if you're in a contracting industry like newspapers? What if you're in a public company (Wiremold was family-owned when Art Byrne worked there) and shareholders expect you to reduce headcount? Can you still make a qualified job guarantee?
A friend of mine, Dave LaHote, faced this issue when he was leading process improvement activities as a pision general manager at Parker Hannifin, a $12 billion manufacturer of motion and control systems. He felt he couldn't make a qualified job guarantee because he was in a public company, but he did want to show respect for workers and encourage them to identify opportunities for improvement.
His solution was to make a commitment to do everything possible to maintain employment without making a formal promise. He told me, "The focus needs to be away from grandiose pronouncements and back to basics in selection and development. Employees know whether the organization really cares about them and values them. They know it by the organization's actions rather than its words. If we truly invest in the development of the skills and capability of our people, the last thing we want is to lose them. Most organizations still put very little thought into employee selection and very little effort into employee development."
Principle 2. Provide an Upside — Profit Sharing and Promotions
Having protected the downside for workers to improve their work, Wiremold also answered the upside question, "What's in it for me?" by having a generous profit-sharing plan. Orry Fiume told me, "A good profit-sharing plan has no cap. 15% of our pretax income went into profit-sharing. The combination of a qualified employment guarantee and a profit-sharing plan is extremely powerful."
Another aspect of "What's in it for me" can be promotions. As resources are freed up, you can selectively redeploy the strongest people to new and interesting jobs. (You need to be alert to supervisors who may want redeploy only the weakest performers.) This subliminally drives the idea that change is positive and leads to personal success. Some organizations, such as Lantech, a manufacturer of shrink-wrapping equipment, redeploy freed people to their process improvement office where they gain experience and get exposure to new areas of the company.
Principle 3: Share the Big Picture
A sense of urgency and a compelling bigger possibility can also provide the motivation for disruption. Vince DiBianca, a senior partner at Praemia Group, a leadership coaching consultancy, told me the story of a defense contractor that shifted from making military satellites to commercial satellites. "They were inspired by the bigger game that commercial satellites would enable them to play in connecting the world, for example allowing everyone in the world to see the Tiananmen Square story as it happened. It tapped into the human spirit, and overcame their survival instinct. They created more opportunity by inventing a new business that displaced the old and familiar."
Question: Have you seen workers disrupt their jobs — even eliminate them?
Article reprinted with permission of the author. First published on HBR.