Leaders to empower employees

318

What do many American CEO's and Mikhail Gorbachev have in common? Answer: They are learning that giving away power isn't easy.

Even the enlightened leaders, who recognize that empowering their employees is the key to a faster, more flexible organization, are scratching their heads when it comes time to act on the idea. Questions such as, "How will I know what is going on?" and fears that "Things will run wildly out of control!" can cause even the best leaders to second-guess their belief that this participation idea makes sense. Like communism, they muse, it must look better on paper than in real life.

At the heart of the problem is the fact that people in organizations are doing exactly what we ask them to do. A proclamation from the CEO that "We will participate!" won't work. Unfortunately, we have built our policies, reports, rewards, punishments, organizational structure and promotions in a way that gives us exactly what we DON'T want in the 90's: a mass of employees who have learned to expect answers from the top and who won't take an independent step. Management has made a science of controlling communications, power and authority; so well, in fact, that changing it means shaking up the organization.

Another problem is that we have confused decentralized power with diluted power. Participation doesn't mean the CEO stops leading. CEOs must be willing to give the organization-and some resistant managers-a good, old-fashioned kick in the pants in order to keep the ball rolling.

Fortunately, some companies have experimented enough with this idea to give us some new information to tinker with-and it looks promising. They have gone beyond the early stages of pretend participation and taken the plunge for better or worse. Like partners in a new marriage, they're testing the limits of the highly sought after intangible: commitment. Not surprisingly, these companies are finding that they had to "prove they mean it" before the employees said, "I do."

So how did these companies actually decentralize and encourage employee participation in their companies? Here are some ideas to get you thinking:

In the article "New Ways to Exercise Power," (Fortune Magazine, November, 1989) author Wilton Woods points out that experts and CEOs say that there are three things that help the most when CEOs are decentralizing: "Unambiguous and loudly public delegation of authority, a rigorous planning process and strong communication."

They also suggest that CEOs need to talk-loudly- about the delegation of power and then demonstrate it for all to see. For example, dividing the company along product lines and giving executive level decision-making and spending power to the head of the division sends a powerful signal, especially if it is made clear that he or she won't be second guessed.

CEO's, who have taken the plunge, tell us that the planning process becomes a critical underpinning for a decentralized operation. Each of the key executives must take part in the strategic planning process, so they have a vivid sense of direction for their operations. This is one way control and corporate direction is maintained. Then, top management can leave the operations alone and watch for variances from those goals.

Many companies are experimenting with the concept of "naturalized" work groups. Instead of separate departments, each with their own agendas, the natural work group is organized around the customer. For example, if the end product requires input from the purchasing, marketing, manufacturing and shipping workers, the naturalized work team would be composed of these people. These groups set their own goals, cost justify their requests for new equipment, manage their own budgets and monitor their own quality standards. They might use the services of "roving" experts such as engineers and accountants when they need to. Such groups are able to meet customer needs in record time because they don't have to cut across departmental lines to reach a decision. Their commitment and job satisfaction tend to be higher, as well, because they get close to their team and their customers and knock themselves out to satisfy them.

Interdepartmental task forces are one way companies are talking across functional lines. Some companies use an expeditor in the operations area to coordinate services from marketing, manufacturing and other service departments.

Gain sharing and profit sharing are getting much attention as companies look for ways to reward employees for not only their individual production but that of their whole team and the company. Some companies are abandoning the concept of pay for time on job and are replacing it with pay hikes for additional responsibility and skills learned. Bonuses are tied to individual performance.

In addition to flattening the organization, to cut down on bureaucracy and cost, decentralized companies are trimming or eliminating staff departments. They are also changing the way they operate in the company. For example, some companies have eliminated the Personnel Department and have incorporated most of the functions into the managers' jobs. Of course, managers are now given additional training and compensation to account for their increased responsibility and authority.

Another version of this is to imbed some members of the staff department into the operating units. Staff functions, such as purchasing, which used to be in a department of its own, may now be decentralized and report to various heads of operations. No more waiting six weeks for inventory or going around the purchasing department because they weren't fast enough.

Other companies are experimenting with the idea of having staff departments bill their internal clients for their services or even sell their services to outside customers, in an effort to prove their worth and check their growth. If the staff department can't deliver quality service or products to their internal customers, the "customer" can shop around outside of the company.

Companies are discovering that real power comes from committed employees who feel empowered. The breakthrough comes when people see "proof" that the company means what it says and they are indeed in control of themselves and can make a difference.

Would you like to bridge the commitment gap with your employees?   We provide management consulting, executive coaching and customized, skills-based training for managers and supervisors, that changes behavior, creates a healthy culture and builds a customer-focused team.  Call us today at (800) 348-1944.