Viewpoint -- Don't Skimp On Employee Empowerment

Dec. 21, 2004
Now is the time to review management/plant-floor relations.

Certainly, 2001 has been a dismal year for many in manufacturing. The economic crisis has idled or slowed hundreds of plants and sent thousands of workers -- blue- and white-collar -- home with layoff notices. Amid the bleakness has been a flurry of reviews of processes, technologies and management. These reviews have been done in response to the Question-of-the-Year: "What else can we do to save money and increase profits?" One would assume that stronger companies and more efficient plants would emerge from these reviews. But will these reborn companies be their strongest and will those plants be their most efficient? Not without employee buy-in, they won't. As unstable a time as it is, it is the perfect time to review management/plant floor-relations. Why? Because research has shown that empowered employees improve performance. When the economy does turn around, one of the most significant competitive advantages a company will have will be empowered employees who understand, support and can easily act upon corporate strategy. An extensive report and series of case studies produced by the Work In America Institute, Scarsdale, N.Y., is the latest research to support this point. Written by Will Friedman and Jill Casner-Lotto and entitled "Teams Work: Lessons from Successful Organizations," the study reports on many aspects of workplace teams. This point from the study, however, seems most relevant in turmoil of the U.S. recession: " work can be a real competitive advantage. And, indeed, the move toward teams in the American workplace has been driven in large part by global competitive pressures for quality and productivity." Indeed, research conducted in 2000 by IndustryWeek and PwC Consulting shows that a manufacturer considered to be world-class is twice as likely to have at least 50% of its workforce participating in self-directed or empowered teams ("The eVolving Chain", a report based on IndustryWeek's fourth annual Census of Manufacturers, with research conducted in association with PwC Consulting). Employee empowerment can be a new way of thinking for many who are used to more hierarchical management structures. Also, I've observed that a downturn is often the time when such top-down management is reinforced because -- let's face it -- a dictatorship is an easier place for uncertain leaders to hide. But leaders need to remember that uncertainty is everywhere today, and if your employees are confused about corporate vision or strategies, their work is not going to support those visions and strategies -- today or tomorrow. And it's not because they are lazy or stupid. It's because they haven't been informed and empowered. Teaming and/or employee empowerment allows a company to tap into their employees' collective knowledge, abilities and loyalty -- valuable assets that can help a company weather tough times and pounce competition during good times. Another recent study illustrates the need -- if not for teams -- at least for the beginnings of employee empowerment through increased communications. The research, conducted for London-based Invensys Performance Solutions by Management Insights Inc., focuses on change processes at process manufacturing companies. Management Insights interviewed 265 senior executives, plant managers, plant supervisors/engineers and plant operators. The study found:

  • Employees learn of strategic change initiatives and goals through slow and inefficient formal communications channels, hindering implementation.
  • Change also is hindered by plant-level tactical and operating decisions that don't support strategic goals.
  • Only half of the plant operators interviewed believe they can impact the strategic change process.
Invensys believes a particular technology it sells, called Dynamic Performance Measures, can help unite corporate and plant-level goals in process industries by increasing the sharing of information among employees. Technology can be a significant contributor to empowering employees. Training can be as well. Of course, both of these cost money, which is harder to come by these days. Still, investing in employee empowerment is worth the payoff even if the only investment that can be done today is research and planning. One case study in the "Teams Work" report is a Ralston Foods plant in Sparks, Nev., which used teams to help increase productivity by 55% in the '90s and reduce costs by 5% per year. Introducing teaming also was vital in the conversion of the plant from a pet-food processing facility to a cereal-making plant in the early '90s. The plant is now experiencing a downturn and in 2000 missed financial targets for the first time in eight years. Nonetheless, Plant Manager Daniel R. Kibbe -- who contributed to the book -- remains committed to the empowerment strategies he instituted and is confident they will continue to be beneficial, despite short-term economic pressures. "Organizations are not like rowboats that can be quickly turned around in the harbor," Kibbe and Casner-Lotto write in "Teams Work." "They are more like battleships -- once you get them turned, they are the best weapons in the world. But it takes time, and often management is not tolerant of the time it takes to get the better weapon in place. Keeping in mind the short-term mentality of quick results, we need to do the best job we can internally to redesign ourselves to fit the business needs and expectations of today without losing sight of tomorrow." Tonya Vinas is managing editor of IndustryWeek.

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