When Workers Manage Themselves
April 1, 1991 -
There is no magical, simple route to national or any other kind of well-being. Instead, it requires wisdom and good sense, especially in our behaviour towards one another in a large variety of social settings.
One area where there is much room for improvement in Canada is the relationship between labour and management. While the situation is not universally bad, there is an all too prevalent attitude that labour and management are antagonists engaged in an ongoing power struggle. The damaging effects of such a view are all around us.
In some instances labour and management work together in an attitude of trust and mutual respect with phenomenal results. Instead of studying failure, we are better served by examining those instances of successful labour-management relations. This is why the article, "How I Learned to Let My Workers Lead," by Ralph Stayer (Harvard Business Review, November/December, 1990) is of interest. (Stayer is the head of Johnsonville Foods, Inc., of Sheboygan, Wisconsin.)
Stayer found that although his business was successful and profitable, there were some threatening clouds on the horizon in the early 1980s. He knew that his success was dependent on a number of variables that could easily turn against him. In thinking about how to move the company ahead, he paid a great deal of attention to his own management style and to the attitude of his employees. He discovered that there was a big gap between the potential and the actual performance of the employees. Too many didn't seem to care and took no interest in their jobs. He realized that the Achilles heel of his company was the lack of motivation and the poor performance of his employees. But how to change that? He was insightful enough to realize that the traditional methods of authoritarian control would not work. Instead, he looked for alternatives but found few guidelines that others could provide. He concluded that he had better face the responsibility himself.
Stayer began by redefining what the goal of his company really was. He realized that his leadership was not encouraging his employees, including management, to perform to the best of their capabilities. Instead, they had relied on him for direction and were simply ready to follow orders. But orders were followed without real care or interest. Stayer came to the conclusion that if he wanted change, he would first have to overhaul his own ways of managing the company.
Changing Work Habits
He began to give more responsibility to others, but he found that it was not a simple matter of giving a different set of instructions. The hardest part was to encourage others to begin to think for themselves and not to be afraid of being independent of the owner. He also found that it was not a simple matter of changing the structures. Most importantly, the actual working habits of management and the other employees needed to be changed. Real improvements did not take place until certain problems and tasks were given directly to the workers on the shopfloor.
For example, a group of employees who disliked working weekends were asked for their suggestions on how the work might be rescheduled. Once they had an opportunity to tackle that problem, they discovered that there were certain causes which they could control. Given the opportunity to do so, the need for weekend work disappeared. Other important changes were introduced in quality control. Instead of assigning that responsibility to top management, it was handed to the workers on the line who were directly involved in production. A further step in the same direction was to have customers' complaints handled by the line workers themselves. The employees began to find a variety of ways in which improvements could be made. The big change was that they started to take a keen interest in what they were doing. Production and quality improved substantially.
This kind of improvement in motivation, team spirit, and product quality led to other changes, including giving the workers responsibility for setting performance standards and eventually doing their own hiring and training. Next, compensation methods were handled by the employees and a performance-based profit sharing plan was adopted.
All of these changes meant that the role of management changed from being an authority figure to one of coaching and encouraging the workers to assume as much responsibility as possible. To help them, much attention was paid to training and education. Stayer reports that more than 65 per cent of the people at Johnsonville are involved in some form of formal education. He understood that to make the company really successful, it needed the ongoing learning and growth of all its employees, and the way to do that was to let them assume responsibility for their own tasks and not to depend on management for solutions. This approach required a drastic alteration in the task of managers as well as employees. Some management personnel could not handle the changes, and they were replaced.
Taking on a Challenge
Stayer cites one interesting example of how the change in management style affected a specific decision. By mid-1985, Johnsonville was approached by a much larger company which had decided to consolidate several of its facilities. This company offered to let Johnsonville take over part of the production of a plant it was closing. While this was an appealing offer, it was also a risky undertaking for it would require a much larger workplace and new investments that would result in a more complex operation. Most dangerously, the arrangement with the new company could be cancelled on a 30-day notice, with disastrous consequences for Johnsonville.
Previously, the executive group would have made the decision, and the offer most likely would have been rejected. But Stayer realized that this was an opportunity to try out the new management approach and to present the employees with the challenge of a large-scale expansion. Management called a meeting with the entire plant and presented the problem, posing three questions: What will make it work? Can the disadvantages be overcome? Do we want to do it?
Various specialty teams went to work on these questions. Different groups chose one team member to report to a plant-wide representative body for formulating the final decision. The outcome of this procedure was that everyone became involved in looking at the advantages and disadvantages. They all agreed that the one all-important requirement would be to achieve the highest possible quality standards for their product. The outcome of this process of careful study involving all the employees was that the company decided to go ahead. The results were beyond their best expectations and confirmed that the new consultative approach really worked.
Johnsonville continues to learn and expand, although the obvious secret of this company is to challenge and motivate all employees to the highest degree by entrusting them with responsibility. As Ralph Stayer discovered, the best way to do his job was to work himself out of a job:
Learning and responsibility are invigorating, and aspirations make our hearts beat. For the last five years, my own aspiration has been to eliminate my job by creating such a crowd of self-starting, problem-solving, responsibility-grabbing, independent thinkers that Johnsonville would run itself.
No doubt, not every Canadian company should or could duplicate exactly the changes introduced at Johnsonville. But the new attitude of respect and trust among the workforce of this company would also serve us very well. Who knows? If it really caught on here, it might save some ailing manufacturing companies in Ontario. It might even help to keep this country together!