One of my recent Leadership Reports generated interest in open book management and discussed four conditions that are required for employees to be engaged. They are:
- Line of sight, which I addressed in my last Leadership Report
- Autonomy and involvement
- Information sharing
- WIIFM or what’s in it for me?
A brief pause for those who are catching up. Why do we care whether employees are engaged?
The simple answer is that if engagement is properly directed, it can create significant improvements in organizational results. The Gallup organization’s research reveals that highly engaged organizations have double the rate of success of lower engaged organizations and demonstrate conclusively that engaged people are more profitable, more customer focused, safer and more likely to stay with their organization.
When you compare companies in the top 25% to bottom-quartile companies, the engagement factor becomes very noticeable. Top-quartile firms report 48 percent fewer safety incidents, 41 percent fewer patient safety incidents and 41 percent fewer quality incidents, as well as lower absenteeism and turnover.
It pays to engage but you need to direct the engagement, or you’re likely to spend money without generating an acceptable return.
Autonomy and Involvement
Autonomy enables people to take action to improve results. If people have a clear line of sight but can’t do anything with it, performance isn’t likely to improve. They need to be able to act on the information they have.
People need varying degrees of autonomy, or the ability to make decisions that influence their work. They don’t have to wait around for someone’s approval. Waiting is wasteful. It chews up time and money and reduces responsiveness. Enhancing autonomy allows people with information to make informed decisions.
Involvement builds ownership in the work or the problem that an employee is trying to solve. Involvement also enables people to tap into the wisdom of the employees who do the jobs every day. Who knows best how to do a job or how to improve a job? The people who do it every day.
Through involvement and autonomy, people have what they need to influence results. This, in turn, creates ownership and commitment. Involvement comes from asking employees, “What do you think?” as well as from more formalized process-improvement activities and team problem solving.
When we asked employees at a large distribution center why a lot of products were damaged on the forklifts, they told us that the company hired people without forklift experience and didn’t take enough time to train the new forklift drivers.
By getting employees involved in helping us understand the problem and its root causes, we were able to get them involved in identifying and implementing solutions to the damage problem. In a reasonably short time, they reduced damage by 65 percent while improving productivity by 16 percent.
In another operation, a group of the company’s brightest engineers showed me a pile of Excel spreadsheets that “projected” that a team of employees could reduce scrap and rework by at least 20 percent if they’d do their jobs the way the engineers thought they should be done.
Then we asked the employees who actually did the work every day what they thought. They said if they could do the work the way they thought it should be done, they could reduce scrap and rework by 60 to 70 percent.
We followed that team’s advice and within a month they had improved scrap and rework by 60 percent. Over time they exceeded their 70 percent estimate. What do a bunch of engineers know about non-engineering jobs anyway?
My next Leadership Report will address information sharing.
Key Takeaway: Involvement and autonomy improves results and generates the ownership that’s necessary to sustaining the improvements over the long run.