Empowerment Of Year 2000 & Beyond

In the past, businesses were organized and structured in a way that would make it difficult for them to survive in the 1990s. The common characteristics included: a strict hierarchy of authority, centralized decision making, vertical communication, and a comprehensive set of rules. There was very little delegation and destitute employee involvement. Successful organizations today are embarking on a new approach centered on teamwork. It entails the formation of empowered teams to replace the numerous layers in the hierarchy of authority. This new philosophy has allowed organizations facing endurance problems to survive the restructuring process. Harrison and Pratt[1, p. 22], determined that there are four groups of teams which create the transformation of an organization. They are as follows: executive steering committee, process evaluation committee, line management, and consultants/facilitators. Each group is held accountable and has a precisely determined part to play in organizational restructuring. The first team to start the ball rolling is the executive steering committee (ESC); it composes the organization’s vision, goals, and objectives. The second team, the process evaluation team (PET), does a process appraisal; it creates the operation and layout for constructive development. This team can create other teams to research specific areas of potential problems or potential opportunity. Then, the resources are made available and modifications are actualized by those managers who are in line positions. The line positions are where the actual changes occur and therefore are the most difficult. For this reason it is crucial that line personnel are in agreement with all phases of the plan. In addition, outside expertise can be advisable where a fresh look is needed to overcome persistent outdated views. Downsizing or delayering does not in and of itself change the rate of productivity. Because of this, companies are changing the structure of their organizations to eliminate the traditional levels of hierarchy; eliminating boundaries created by departments or functions. In its final form, the horizontal organization might be made up of a small group of senior executives who are responsible for finances and human resources. The rest of the corporation “works together in multi-disciplinary teams that

Empowerment for the year 2000 and beyond

Nick Nykodym, Sonny S. Ariss, Jack L. Simonetti and Jean Plotner

The authors Nick Nykodym is Professor of Management; Sonny S. Ariss is Associate Professor; Jack L. Simonetti is Professor of Management and former Chair of the Management Development; and Jean Plotner is Research Associate, all at the University of Toledo, Ohio, USA. Abstract Analyzes recent thought relating to the forced restructuring of businesses. In general, businesses are unable to compete in the new global environment in their present state because of worldwide competition; national changes involving mergers, bank failures and company takeovers. Companies which can incorporate a team philosophy into their organizations will have a better chance of surviving in the year 2000. Details the new and more stringent requirements that are placed on leadership and the empowerment of teams through leadership. Focusses on information as to how to choose the right leadership and teams. Uses significant examples of businesses which have successfully restructured to illustrate the importance of fostering a leadership style which will advocate teamwork.

Empowerment in Organizations Volume 3 · Number 4 · 1995 · pp. 36–42 © MCB University Press · ISSN 0968-4891

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Empowerment for the year 2000 and beyond

Empowerment in Organizations

Nick Nykodym, Sonny S. Ariss, Jack L. Simonetti and Jean Plotner

Volume 3 · Number 4 · 1995 · 36–42

Changing views for leadership

perform core processes, such as product development or sales generation”[2, p. 77]. This focus on process eliminates the layers of positions; and improves production and cuts expenses.

People with the ability to lead others successfully are rarely recognized before the fact. In other words, successful leadership is not usually predictable. “An effective leader, like a successful artist, must love and be profoundly committed to a vision”[3, p. 18]. The leaders of today who will still be here for the year 2000 are those with vision; who have the ability to communicate that vision to others; and, who have the moral authority and credibility so that others will follow where they lead. Principles and values must not only be believed by leaders, but their actions must follow their beliefs. They should also be able to follow through with decisions that support their values and beliefs. Their visions must be meaningful and yet expandable by the other members of their teams. The leaders must have the ability to communicate their visions to their team members and gain their support.

Changing to a horizontal structure can be complicated Eliminating the neatly arranged positions people have become accustomed to can be the ultimate challenge. Even outlining the processes of an organization can be complex and terribly confusing. The manager has the role of convincing people to think comprehensively and eliminate their familiar advertising, investing, or manufacturing hats. “This is the hardest damn thing to do”, says Terry M. Ennis, who heads up a group to help Du Pont’s businesses “organize along horizontal lines”[2, p. 78]. People who have spent their lives climbing the corporate ladder find it very unsettling and difficult to make the transformation. These people are used to having everyone in their place and responsible for their own tasks. It is an achievement to obtain cooperation between the separate departments. It is also important to note that employees who are task oriented and departmentalized cannot see the organizational needs as a whole. In the 1960s and 1970s, it was discovered that task orientation did not work well so matrix teams were created, leaving the levels hierarchy in tact. That was a partial fix for then. Executives are forced to find different solutions today because the rules for competing have been altered and they have been forced into an accelerated global market. Managers must comprehend what their customers require and do a complete examination of what it will take to gain potential customers. At this point, an organization can begin to recognize its most important core processes to achieve its objectives – “Whether they are lowering costs by 30 percent or developing new products in half the time it normally requires”[2, p. 78]. The ultimate idea is, as Du Pont’s Terry Ennis puts it: “Our goal is to get everyone focussed on the business as a system in which the functions are seamless”[2, p. 79].

‘…Leaders must recognize the human need for recognition in other people and have the welfare of other people on their minds…’ Innovation and imagination should be keywords by which the teams do their brainstorming. Furthermore, leaders must be able to motivate others to do their best for the organization. In addition, leaders must have the ability to give credit to others. Likewise, when a decision goes wrong, they must be willing to take the blame and when it goes right, they must be willing to give the credit. Therefore, leaders must recognize the human need for recognition in other people. Hence, leaders must have the welfare of other people on their minds and not their own welfare. Survival for leaders means that they will no longer be the authoritarian leaders of yesterday; instead, they will be the team members of tomorrow. This is a hefty criterion for the leaders of today who still want to be leaders in the year 2000[3]. According to Sabo[4] award winning leaders realize that the public comes first. “It’s so fundamental, yet a lot of people do not keep it in the forefront of their efforts. They forget who they are working for”, says Bell, president emeritus of the American Advertising 37

Empowerment for the year 2000 and beyond

Empowerment in Organizations

Nick Nykodym, Sonny S. Ariss, Jack L. Simonetti and Jean Plotner

Volume 3 · Number 4 · 1995 · 36–42

Federation, Washington, DC, and currently president of AAF’s foundation. Equally interesting, Kathryn E. Johnson, president and chief executive officer of Western Hospitals and a recipient of the 1993 Key Award, claims that “Her team of staff and volunteers spent a number of years repositioning the Health Care Forum…to focus on creating healthier communities rather than on addressing illness-based care”. They see themselves as “More of an action-oriented think tank…[4, p. 124]. She too recognizes her changing role for survival and success in the 1990s. Charlotte St Martin, who chaired ASAE in 1990-1991, says they worked a “back to the future” planning model. Members envisioned the ideal future for their organization, and then they worked backward to create it”[4, p. 125]. She says that “We also have to find ways to engage emerging leaders, who come from increasingly diverse backgrounds”[4, p. 125]. In addition, she says that she believes in multigenerational input; that is, she wants to hear from team members at every level of the organization. According to George D. Kirkland, president of the Los Angeles Convention & Visitors Bureau since 1990, “Successful management has its roots in the willingness to look for what is best in other people…”[4, p. 124]. Obviously, the people already at the top see the changing roles of leaders very clearly and are adapting themselves to accommodate those changes.

short-term planning with immediate profits as the main goal making true restructuring of the organizational processes impossible. Bottom line, technocrats must be recognized so they can be placed in benign positions where their talents are enhanced, but without the power to remove or add team members. It is important to note technocrats are very important to the organizational structure, as long as their power is kept in check. Today, a company comprising too many technocrats is a company headed for trouble. Next, we have the artists. The artist’s peers and colleagues describe them as “bold, daring, exciting, volatile, intuitive, entrepreneurial, inspiring, imaginative, unpredictable and funny”[5, p. 49]. They believe in convincing the people around them to buy into their visions and dreams; they never are middle of the road with their opinions; and people are either clearcut friends or clear-cut enemies of the artists. The artists start off very ambiguous, but their plans become clear through their activation. If at all possible, you certainly want at least one artist on every team. The companies that recognize the artists for their visions and dreams will be successful in restructuring the organizational processes. At this point in time, however, the artists are losing out to the technocrats. This does not mean doom and gloom for these companies. It does mean restructuring of staff within them. More often than not, the artists are still there; they are simply not in positions of power where their dreams and visions can be brought to light. The companies which have the wherewithal to restructure their staff so their artists’ visions and dreams can become realities will have a greater chance of survival to see the year 2000. Last but not least, we have the craftsmen. These people tend to stay employed at one place for a very long time. Consequently, they know what took place many years ago and care very much about what takes place presently and well into the future. They have the experience, loyalty, assurance, continuity, and organizational adhesive that generates trust, respect, and commitment among their peers. Employees will take the long range view and make sacrifices after the craftsmen enlighten them by explaining that the sacrifices are for the good of the company and not just money placed into specific pockets.

Choosing the right team members Part of the process of restructuring into teams is to be able to identify the personalities of the managers you employ. According to Pitcher[5], they are either technocrat, artist or craftsman. “Technocrats are described by their peers and colleagues as controlled, conservative, serious, analytical, no-nonsense, intense, determined, cerebral, methodical and meticulous”[5, p. 48]. Taken separately these terms could be a virtue; but when they are found in one person – you can have trouble. Basically, technocrats prefer to throw out the old, including employees, and bring in the new. “Give technocrats ultimate authority and he or she will drive out everything else”[5, p. 50]. Most of today’s businesses are run by technocrats who have surrounded themselves with other technocrats. They focus on 38

Empowerment for the year 2000 and beyond

Empowerment in Organizations

Nick Nykodym, Sonny S. Ariss, Jack L. Simonetti and Jean Plotner

Volume 3 · Number 4 · 1995 · 36–42

(3) Empower people; enhance responsibility with authority.

Equally significant, the craftsmen are by nature conventional. Most importantly though, the craftsmen’s knowledge gained from past experience is fundamental to the decision-making process. Another virtue of the craftsmen is patience; they realize that their knowledge came slowly over the years, so they give time for acceptance and change in other people. Craftsmen are described as “wise, amiable, humane, honest, straightforward, responsible, trustworthy, reasonable, open-minded and realistic”[5, p. 50]. Companies that recognize their craftsmen for their value can avoid making mistakes that were made in the past; they can also reap the benefits from implementation of sound long-term objectives and goals. Essentially, technocrats, artists and craftsmen are needed for well-balanced organizational teams. Usually, people are a combination of the different personalities, so it is important to bring out their strengths by placing them in positions that enhance their value. For real success it takes the different personalities working together to bring about the restructuring process. It is equally important that technocrats, artists and craftsmen recognize one another’s differences and the values of those differences so that they might better be able to communicate and work as teams.

TQM can be a one step at a time procedure. Bottom line, the goal is to get more accomplished for less. As organizational needs surface, employees are empowered according to their ability and have complete authority over their particular restructuring processes. Most situations can best be managed by employees who have hands on knowledge of their daily activities. The team approach lines up the various individuals who have the most abilities in a given area. However, it is important to remember that each team is carefully created by an executive member. Even more important, it is crucial that once the teams are in place, they are left on their own to do the restructuring process – this can be a most difficult but necessary assignment for a Chief Executive Officer (CEO)[6, p. 34]. Some examples of successful teams are as follows: a team created to manage the general information, publications, and public services meets to examine their employment needs, how they link together, and how best to distribute information to staff persons and the press. ‘…It is a good idea to create a crisis task force. They can make plans to prevent or respond to any crisis situation in advance…’

Empowerment of teams The best in leaders acclaim their great successes are because they have the ability to motivate and bring out the talents of those who work around them. They understand that employees like and need ownership and empowerment in order to grow emotionally and intellectually. “Empowerment fosters confidence, enabling individuals to step forward and handle situations effectively, without hesitancy or need for approval”[6, p. 33]. The idea is to match employee abilities with organizational needs. There is a fancy name for this type of management called “total quality management” or referred to as TQM which sounds complicated but is really only three simple steps: (1) Do it right the first time. (2) Communicate needs and expectations of the customer and the provider.

Another team meets in regard to continuing legal education for planning and conducting the legal education programs. They also meet weekly to be certain that assignments do not overlap or conflict; they become think tanks for possible problems and report the restructuring process. As a result of the efforts of just six staff members, they are able to conduct more than 100 continuing legal education sessions each year, including 40 live seminars[6, p. 34]. Bottom line, empowerment also causes communication back and forth from every direction. Another positive side effect is the bonding that occurs from that communication. Another type of task force can be created to prevent or avoid daily management problems. This task force concerns itself with possible or potential problems that might occur. One such 39

Empowerment for the year 2000 and beyond

Empowerment in Organizations

Nick Nykodym, Sonny S. Ariss, Jack L. Simonetti and Jean Plotner

Volume 3 · Number 4 · 1995 · 36–42

committee ensures employees are cross-trained in different areas of the organization to help decrease payroll obligations and decrease the employing of temporary assistance. More importantly, it is a good idea to create a crisis task force. They can make plans to prevent or respond to any crisis situation in advance. This committee tries to think of every crisis that is imaginable. Then, they create policies and procedures to prevent or evade each potential crisis; they investigate ways to respond to each possible crisis; and then they actively participate in educating the rest of the employees about safely getting through a crisis. This could range from flooding, to fire, to a tornado or simply a shortage of help due to a flu epidemic[6, p. 34].

International, a consulting firm that specializes in cultural transformation[2, p. 81]. For this reason, your first goal is to remove the traditional department barriers that have existed for years; this may be the most difficult task you encounter. Therefore, it is vital that all team members realize that they are changing from their departmental hats to team hats. Once in the team hat frame of mind, they can share thoughts and ideas. Even with all this, there appears to be an unknown entity that keeps most restructuring efforts from more than minimal success. According to Rothschild[7], Michael McMaster, of the London-based consulting firm bearing his name, claims that companies everywhere are dominated by what he terms as “Machinespeak” language. He gives some examples, such as: “Overhaul the division, finetune the company, tighten controls, pump up sales, shift gears, or balance operations”. Martin ‘Bix’ Bickson of Seattle-based Bickson Seeton says that “Language is the source of culture, including corporate culture. Language shapes mindset”. Machine-type talking precludes people from changing their way of thinking, and therefore, limits what they will learn and makes them unable to change their behavior. Corporate restructuring efforts cause the need for constant change and this collides head on with the machine-age mindset that needs stability[7, p. 19]. Rothchild also maintains the following: “As the Information Age unfolds, a dizzying pace of technological advance is forcing more and more companies into nonstop restructuring”[7, p. 20]. Frustration comes when managers discover that no one structure provides a long-term solution. The challenge for managers becomes not as one of finding and installing the right structure but as one of building an appropriate multi-dimensional and flexible decision-making process which will sense and respond to the complex, diverse, and changeable demands companies face. New biological words are being looked at to replace the machinespeak language of yesterday. Some examples are: • agility; • responsiveness; • learning; • adaptation;

Total quality management – success or failure According to Ray Strata, chairman of Analog Devices and the $567-million-a-year maker of electronic components, competitive advantage, especially in knowledge-intensive industries, comes from organizational learning. A survey of the 500 TQM programs implemented by US companies shows no notable improvement. In fact, Michael Hammer, advisor and teacher of TQM acknowledges that there is a 70 percent failure rate. Regardless of what the statistics show, companies everywhere are making some degree of effort to switch over to the boundaryless organization. The problem, says Ray Strata, is in the communication[7, p. 19]. ‘…Companies everywhere are dominated by what McMaster terms as “Machinespeak” language…’

Success or failure of any organization begins or ends with communication or the lack of it. But it is an especially visible problem in the boundaryless organization. For example, if you are unable to get your manufacturing department team person to communicate openly with your financial department team person – you are doomed. “An overriding challenge is how you get marketing people to talk to finance people when they’ve thrown rocks at each other for decades”, says Gerald Ross, co-founder of ChangeLab 40

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Empowerment for the year 2000 and beyond

Empowerment in Organizations

Nick Nykodym, Sonny S. Ariss, Jack L. Simonetti and Jean Plotner

Volume 3 · Number 4 · 1995 · 36–42

food chain; niche; cooperation; communication; and intelligence.

with some dialogue from marketing. Manufacturing wouldn’t get involved until the design was brought into the factory. Now, all the business issues are right on the table from the beginning”[2, p. 80]. Ernest W. Deavenport Jr, president of Eastman Chemical says, “It makes people take off their organizational hats and put on their team hats. It gives people a much broader perspective and forces decision making down at least another level”[2, p. 80]. On January 1, 1994, the $3.5 billion section of Eastman Kodak Company stood alone. Many of its senior officers were replaced with autonomous work teams. Their teams consist of all the plant managers; in place of a head of manufacturing for example. They have over 1,000 teams: “It was the most dramatic change in the company’s 70-year history”, maintains Deavenport[2, p. 80]. According to Byrne[2, p. 78], some AT&T units operate on processes and not on function. Some such areas are their global communications network and their maintenance. For example, AT&T’s Network Services Division found 130 processes and narrowed them down to 13 processes. This division has 16,000 employees so this is a pretty sizable undertaking. Each of the core processes has an owner who focusses on daily routines. There is also a champion who makes sure that the processes of the organization are always intact with the plans, procedures and objectives. They make their financial plans according to processes and give employees extra compensation according to consumer assessments. Monte Peterson of Thermos Corporation took it over in 1990 with the idea of totally reinventing the company. Thermos, the company famous for their glass-lined thermos bottles also sold outdoor grills, but had become run of the mill with nothing outstanding for many years. The revolutionary change in the world market is what caused Peterson to search for drastic changes within the company. He chose the process-driven team method in order to create a new space-age outdoor grill. He claims that many companies give their team members too many responsibilities. So, the members on his teams had one responsibility and that was their outdoor grill project. In this way, Peterson managed to bring a dying company back to life.

As corporate people realize that they are struggling to survive, they will also realize that their intelligence is what is going to bring them to the top. In other words, it is what they learn that precipitates what they earn. Everyone involved must have better intelligence in order to communicate effectively. Gerald Ross, co-founder of ChangeLab International, a consulting firm that specializes in cultural transformation: “Your career will be dependent on your ability to work across boundaries with others very different from you”[2, p. 81]. Implicitly, the companies that are the most successful have managed drastic changes in communications on the inside. This connecting business minds causes tremendous creativity and productivity. However, “Unless an organization adopts a new language and mindset, one appropriate to the fast-evolving competitive terrain of the Information Age, the company will not be able to learn fast enough to survive”[7, p. 20].

Business successes of the 1990s John F. Welch Jr, chairman of General Electric Company, has created the seamless company and has cut expenses, shortened production cycles and increased the company’s customer satisfaction. They have a $3 billion lighting business where nine to 12 senior team members manage nearly 100 processes globally, from improving production to creating new commodities. In all situations, the objectives of the process are fulfilled by team members who have many skills working interchangeably with other like teams[2, p. 79]. Paul White, president of Modicon Inc., North Andover, Massachusetts, claims that by working in teams, using assorted team hats, they were able to cut by one-third the time from launching six software packages into the public sector. Their organization is basically functional by structure, but they also have 30 teams which include 900 employees representing many different departments. White says, “An engineering team would have worked on this alone 41

Empowerment for the year 2000 and beyond

Empowerment in Organizations

Nick Nykodym, Sonny S. Ariss, Jack L. Simonetti and Jean Plotner

Volume 3 · Number 4 · 1995 · 36–42

Thermos revenues are up 13 percent with most of the growth coming from new products and all of it from the process-driven team method.

after the company has been streamlined and the organization is still not working to its potential. In fact, a condensed vertical structure might be correct for some industries. Eventually, most organizations will be combinations of both[2].

Conclusion Because of global changes in the world market, companies find themselves unable to compete. Because of this, companies are being forced to restructure to adapt to a rapidly changing environment resulting from a dynamic worldwide market; national changes involving mergers, bank failures and company takeovers. Companies that will be around in the year 2000 will be those who are able to survive downsizing by promoting a leadership style which emphasizes teamwork. These companies see the global challenge as one of building and maintaining a complex decision-making process rather than of finding the right formal structure. The critical task is to develop a new management perspective which entails empowering the workforce as a source of strategic advantage. Firms that take this different perspective are often able to outperform their rivals successfully. However, do not hurry to write off functional management altogether. No organization has completely eliminated functional specialization; even promoters of restructuring do not foresee the end of managers who are experts in manufacturing, finance, etc. Reengineering should only occur

References 1

Harrison, D.B. and Pratt, M., “Transforming the enterprise”, Canadian Business Review, Vol. 20, Summer, 1993, pp. 22-5.

2

Byrne, J., “The horizontal corporation”, Business Week, No. 3351, December 20, 1993, pp. 76-83.

3

Castonguay, H., “A personal view of leadership”, Business Quarterly, Vol. 58, Winter 1993, pp. 17-20.

4

Sabo, S., “Award-winning leadership”, Association Management, Vol. 45, 1993, pp. 122-7.

5

Pitcher, P., “Balancing personality types at the top”, Business Quarterly, Vol. 58, Winter 1993, pp. 47-57.

6

Greene, C., “Teaming up for success”, Association Management, Vol. 45, July 1993, pp. 32-7, 100.

7

Rothschild, M., “Wanting to grow? Watch your language”, Forbes ASAP, Vol. 152, 1993, pp. 19-20.

Further reading Association Management, “CEO to CEO: A panel to answer your questions”, Association Management, Vol. 45, October 1993, p. 143. Welch, J., “A master class in radical change”, Fortune, Vol. 128, 1993, pp. 82-4, 88, 90.

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