| Effective empowerment
means letting go and taking control. CEOs who thrive in this
paradox tap people power — the only sustainable competitive
advantage.
EMPOWERMENT is the mantra of the 1990s. Many CEOs
chant it; fewer achieve it. A chief reason is the paradox
of empowerment: Empowerment means letting go while taking
control. These two actions seem contradictory. Indeed, this
paradox traps many CEOs and undermines their attempts to
transform their corporations.
Successful CEOs embrace the paradox of empowerment. Such
leaders understand their responsibility to create the right
environment in which people flourish on behalf of the company.
They transform the company by intervening — sometimes
in drastic ways — to change the way people work, relate,
think, and feel. Yet they also step back to let empowerment
take root, grow, and thrive.
Like any paradox, the paradox of empowerment is full of
traps. It ensnares CEOs who cannot accept or live in the
contradiction of taking control and letting go. Such CEOs
become abdicators or meddlers. Those who thrive in the paradox
become coaches who learn how to cultivate true empowerment.
THE
ABDICATOR, THE MEDDLER & THE COACH
Abdicators fail, because they let go but don't take control.
These CEOs inform their people, "You're empowered,"
but forsake their responsibility to intervene and make fundamental
changes.
Abdicators talk empowerment with great enthusiasm, spreading
the word in speeches, memos, videos, and press conferences.
But it's still business as usual. They don't establish clear
goals, shared values, or empowering mechanisms. The CEO
of a large bank, for example, declared 1992 the "Year
of Empowerment," but did nothing to transform the organization
— no changes in basic work processes, no reorganization
into teams, no re-education and skills training. Two years
later, the company remains a traditional hierarchy, a dysfunctional
assortment of silos.
Meddlers fail, because they grab control but can't let
go. In their hearts, such CEOs fear genuine empowerment.
Self-managed teams, for example, don't fit their view of
the CEO's role. An empowered work force appears to leave
no role for the chief executive. So, they micromanage, demand
immediate results, ride herd, and second-guess. People quickly
learn to "delegate upward," never taking ownership
of processes, products, and tasks.
Coaches understand their paradoxical role. They set the
game plan: mission, goals, strategies. They make changes
in infrastructure to create an empowering environment. They
enable their people to be the best by providing the support
the team needs. But coaches don't play the game.
Coaches know the critical difference between intervention
and interference. Consider Jerre Stead, CEO and chairman
of Dayton, Ohio-based AT&T Global Information Solutions
(formerly NCR Corp.), whose business card reads "Head
Coach." (Employees are called "associates.")
"I work hard at transferring ownership," Stead
says. "I work very hard at not getting down into the
details. Not from not knowing the details, by the way, and
that's hard for people to figure out. But not getting into
the details. Because if you do, you take away empowerment."
THE
NEW PHILOSOPHER-KINGS
Empowerment demands a new breed of CEO, one who thrives
in the paradox of empowerment. If the CEO of yesterday's
command-and-control corporation was the military chieftain,
then the CEO of tomorrow's corporation is the philosopher-king.
As a philosopher, the CEO develops a comprehensive theory
of the corporation as a society. This theory includes an
ideology or system of beliefs about human nature, superordinate
goals, and shared values, and it encompasses a vision of
a better society — a model of the company of tomorrow.
As a king, the CEO acts decisively to put theory into practice.
This demands not just business but social re-engineering
— all the deep interventions necessary to transform
the corporation. For example, General Electric CEO and Chairman
Jack Welch first intervened by fixing GE's "hardware"
problems. He downsized, de-layered, and reorganized into
13 focused global high technology and services businesses.
Next, Welch addressed the "software." He created
the vision of Fairfield, Connecticut-based GE as a boundaryless
company. He instituted empowering mechanisms — Work-Out,
best practices, and process mapping. And he coached and
instructed via massive re-education and re-socialization
efforts.
IDEOLOGY
&
MOTIVATION
CEOs who thrive in the paradox begin with a system of beliefs.
Details differ, but these CEOs operate with high opinions
of human nature and with lofty superordinate goals and shared
values.
Human nature. Empowering CEOs share remarkably
similar beliefs about people and their vast potential. "The
great companies of the future, " says Jerre Stead,
"are companies that will have really opened up the
people power for an organization. I literally believe the
only sustainable competitive advantage a company has is
its people."
Coaches believe it is human nature to seek work and responsibility.
People desire fulfilling and productive jobs. In the right
environment, people flourish on the job, and exercise self-control
and self-direction in service of the enterprise.
Meddlers hold a bleak view of human nature. People dislike
work and responsibility, and, therefore, must be controlled
to put forth effort in the interests of the company. Meddlers
don't trust their people. Without trust, they can't let
go — and are trapped by the paradox.
CEOs who empower recognize the potent motivating forces
beyond money — the needs for belonging, mastery, self-esteem,
achievement, respect — and create the environment in
which people meet these higher-order needs on the job. "People
want to be challenged," says Bob Cantwell, president
of Hadady Corp., a Lansing, Illinois-based diversified manufacturer,
whose customers include Caterpillar in Peoria, Illinois.
"They want to look forward to a challenge. Money isn't
everything. I want to create a culture where people look
forward to coming to work in the morning and feel good at
night when they leave."
Coaches believe every person is an expert. Toledo, Ohio-based
Dana Corp., an empowerment practitioner long before the
term came into vogue, uses only a one-page corporate policy
statement (most of which is devoted to "People").
A key policy belief: "The people who know best how
the job should be done are the ones doing it."
Superordinate goals. High-level goals provide
the company with a unifying focus. Without them, the CEO
becomes an abdicator, letting the company wander, because
it lacks unity.
The best superordinate goals are clear, simple, and inspirational.
At Schaumburg, Illinois-based Motorola, for example, it's
quality, quite simply; all else revolves around it.
Superordinate goals emphasize being the best — the
world's best, or best in class. For example, AT&T GIS'
goal is to be "the world's best at bringing computing
and communications solutions together to provide people
easy access to information and to each other — anytime,
anywhere."
Shared values. Lofty shared values —
social principles and standards — create a cultural
center. Values are guidelines for personal and organizational
conduct. They provide a clear image of what it means to
be an outstanding citizen in the new society — and
they inspire people to excel.
Without shared values, a company can't hold together, especially
a large, diverse, global company. Abdicators fail to create
shared values, so the company disintegrates. Meddlers, with
their dim view of human nature, don't believe in the validity
and usefulness of high-minded values.
Coaches create clear, shared values. Jerre Stead articulates
"Common Bond" values that guide and unite AT&T
GIS: "respect for individuals, dedication to helping
customers, highest standards of integrity, innovation, and
teamwork."
In the 1980s, GE's shared values emphasized "honesty,
candor, openness, integrity." In the 1990s, values
also include "create a clear, simple, reality-based
customer-focused vision, have a passion for excellence,
hate bureaucracy, empower others, and behave in a boundaryless
fashion."
A
BETTER SOCIETY
Empowering CEOs have a clear vision of a better society
— a blueprint or model of the company in the future.
Specifics vary, but all models break with traditional ways
of doing business and emphasize the re-design of both external
and internal relationships.
Jack Welch's model is his now well-known "boundaryless
company." At Hadady, Bob Cantwell promotes the "network
model" of organization. "Key to our transformation,"
he says, "was the understanding of vital networks within
the organization. Hadady studied the formal and informal
networks, using process mapping and network analysis. Understanding
our networks has been essential to team building within
Hadady."
Like all new designs, Cantwell's network model embraces
customers. This enables Hadady to be a "source for
solutions" rather than a mere parts supplier. Consider
Hadady's development of a new marine cooling system for
Caterpillar. "By using concurrent engineering and networking
with a core group of Caterpillar engineers and many other
Caterpillar suppliers," recalls Cantwell, "product
development and prototyping time was slashed by a factor
of three-five months versus 1.5 years." Other benefits
include: "the personal relationships that developed
from this project, and the hunger to do it again."
Jerre Stead's model of a better society begins with customers.
"We need to become customer-centric, placing the customer
at the heart of everything we do," he says. With this
emphasis, AT&T GIS plans to be "the world's best
at delighting customers."
The new order at AT&T GIS is the Customer Focused Business
Model, which makes the Customer Focused Team (CFT) the company's
basic building block. To date, over 530 CFTs have been formed.
Each is a dedicated, empowered, multifunctional group, with
common objectives, focused solely on the customer. Each
has full decision-making authority, accountability, and
full-stream profit responsibility.
CFT members and resources are dictated entirely by customer
requirements. Each CFT has a "Leadership Circle"
that establishes direction and priorities, gets input from
and provides feedback to functional areas, and works closely
with customers to identify and prioritize issues, review
progress, and celebrate accomplishments.
Like all blueprints of the new society, the new Business
Model integrates the company inside and out. Says Stead,
"Our job is to maximize our Value Equation: Delighted
associates cause delighted customers, which create delighted
shareowners."
PUTTING
THEORY INTO PRACTICE
Implementation is the crux of the empowerment paradox. The
risk of not letting go is high, because implementation demands
forceful action. Many CEOs are trapped here, becoming meddlers.
Empowering CEOs take decisive control, insisting on conformity
to the new model of society. Within this stricture, however,
people are free to act, do their jobs as they see fit, and
prosper.
*Removing barriers. CEOs who empower believe
human nature is fully expressed only when "barriers"
are eliminated. "Everybody goes to work to do a good
job, but stuff gets in the way," says Wendell Baker,
district administrator (CEO) of the Matagorda County Hospital
District in Texas. "It's up to the leader to get this
stuff out of the way." Meddlers, in contrast, erect
barriers to prevent the expression of base human nature.
Common barriers include conflicting goals, counterproductive
rules, excessive organizational layers, departmentalized
structures, and traditional "this-too-shall-pass"
attitudes.
Setting strategy. Removing barriers doesn't
mean people can choose what to do. Empowerment doesn't mean,
"anything goes." Dana Corp., for example, avoids
the word "autonomous," because it implies free
reign. Dana employees don't set strategy, but they have
a great deal of latitude in their areas of responsibility.
At AT&T GIS, says Jerre Stead, "people still believe
today that they have the right to pick and choose between
which strategies we're going to implement and which ones
we're not. That doesn't work very well. That's why our strategic
framework is so important — so everybody understands
this is the game we're going to play.
Jack Welch defined "the game to play" when he
reorganized GE into his famous "Three Circles":
core (traditional lines such as appliances), services, and
technology. Each business in a circle had to be No. 1 or
No. 2 in its market — or get there quickly. Those outside
the Three Circles were sold or closed.
Setting strategy doesn't imply rigidity or a blind top-down
approach. Coaches recognize the value of consultation. As
Jerre Stead says, "We get [our associates'] input as
we create that framework-input, not decisions, input."
Strategy remains flexible to respond to unforeseen circumstances
and events.
Creating social mechanisms. CEOs who thrive
in the empowerment paradox invent and institute social mechanisms
that release human nature and implement the new blueprint.
Abdicators don't see the need for social mechanisms. Meddlers
create disempowering mechanisms.
Effective social mechanisms manage the conditions of interaction,
the ways in which people interrelate and work. Bob Cantwell
arranges personal contacts with customers. "Whenever
there's a quality problem," he says, "we send
the Hadady operator to resolve the issue. Now, the operator
has a sense of ownership. Once you send the operator to
the customer, the chances of having the same problem are
slim to none."
Jack Welch uses Work-Out, modeled after the New England
town meeting, to build trust, empower, eliminate unnecessary
work, and implement the boundaryless model.
Recently, AT&T GIS fostered networking with and among
its strategic allies by convening over 125 partners in its
first-ever Global Alliance Conference.
Best practices — learning from the best companies
in the world — is a boundary-busting, relationship-building
mechanism many CEOs employ. AT&T GIS, for example, examined
the use of team concepts at Stamford, Connecticut-based
Xerox; GE; and Motorola before establishing its Customer
Focused Business Model.
Empowering CEOs create high-level networks to unite the
company. Jack Welch established the Corporate Executive
Council, a network of top business leaders from GE, who
convene regularly to exchange information, ideas, and advice.
Jerre Stead created two leadership teams to guide overall
activities across businesses: the Quality Council and the
Global Operations Team.
Open communication. CEOs who empower practice
open communication. "I operate with an open book,"
says Cantwell. "I share what used to be confidential
information — sales, profits, costs. I trust them to
use it to the company's benefit."
Stead uses several mechanisms to create an environment
of openness and trust. "Juice with Jerre," a practice
he has used since 1972, is an informal gathering of 20 to
25 people who engage in open and candid discussions. With
two sessions a week, he makes over 2,000 personal contacts
each year. In the "Ask Jerre" program, associates
ask questions and get answers within 48 hours. "Transition
Times," a newsletter, is an open forum for associates
on the new Business Model.
Shared objectives, measures, and rewards. Empowering
CEOs establish an infrastructure that conveys, promotes,
and reinforces desired behaviors. "I don't think you
can create an environment of empowerment," says Stead,
"if you don't have your objectives, measures, and rewards
in place, all of which are consistent and part of an overall
strategic frame-work.
Objectives, measures, and rewards must be shared to promote
cooperation and synergy. Stead is now instituting the practice
of "one-over-one" objectives and rewards sharing:
Fifty percent of a person's compensation is based on individual
performance, and 50 percent on collective performance (such
as a CFT). Eventually, everyone will be measured and rewarded
one-over-one.
Re-socialization. CEOs who empower supply
the tools necessary to thrive in the new society, such as
education and skills training. But they also promote re-socialization
— the inculcation of new values. To educate and re-socialize,
coaches often establish learning centers, such as Dana University
and GE's Crotonville Management Institute.
True empowerment is possible only when the CEO — and
the company — learn to live in the paradox of empowerment
and thrive on its contradictions. This is epitomized in
an ancient Chinese poem: Go to the people/Learn from them/Love
them/Start with what they know/Build on what they have/But
of the best leaders, when their task is accomplished, their
work is done, the people will remark: We have done it ourselves."
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