I have had the very fortunate opportunity to work for two privately held, family owned medium sized manufacturing firms.  In each case, my job was to re-design the HR and Management System in keeping with a deeply held business belief by the owner.  So designing a management system becomes easier when the owner’s values are known and acted upon.

Designing a management system must be like branding a product, we try to create a feel and a sense of identity.  The ”brand” becomes larger than the sum of the parts.  Quite frankly, every company’s management system is branded.  The good brands are usuall the result of a conscious and competent architect.  Bad ones are usually the result of negligence and ignorance.  When a business is small enough it is usually the owner that is the architect.  As the business grows and typical complexity sneeks in and good workers get promoted to become crappy leaders and layers of “supervision” begins to fog the message of the owner, it will take a competent OD/HR person to get it back on track.  The longer an owner waits the harder it is to turn it around.

My work was made easy by owners who’s heart was bigger than their heads.  Both owners wore their values on their sleeves, so it was not difficult to determine the priorities.  I had to listen, observe, inquire, and study a lot to begin the process of design.  These were the typical questions I asked myself -

Based on the owner’s belief system, how would you:

administer pay programs?

structure the benefits program?

recognize and reward  employees?

select new employees to the team?

structure the work?

handle discipline?

manage attendance?

train leaders?

design the organization?

incentivize?

In one company, the owner felt that Dr. Deming’s philosophy resonated most  – so we had to dig deep into the material and understand Deming’s philosophical underpinnings and we asked ourselves the same questions.  Fortunately, Deming had a lot to say about those items.  It helped, but it was still a difficult task. 

In another company, one small plant was underperforming so the options on the table were to shut it down or “team it”.  I was brought in to “team it”.  And team it we did!

Imagine – teams of employees having more decision making capability than most supervisors in most companies.  Teams of employees deciding who got hired, who got fired, who got raises, who got promoted, who got disciplined.  The employees did a far better job than the managers.  Not that the managers were bad, they just were not as close to the action.  Also, we had teams with performance metrics, that worked towards a daily goal.  At the end of the shift (sometimes at midshift) they would meet for 15-20 minutes and capture on a flip chart – what went well that day?  what were the opportunities for improvement?  And then they would action plan for the next day – who does what by when.

So – what was the design?  See next post.

Leaders listening and interacting with employees, hearing what makes them proud of their work, what frustrates them about their jobs, and where opportunities for improvement exist.  This is called performance management.

Leaders that spend more time doing performance management do not need to do annual reviews.  Employees do not want to evaluated or judged; they want to be led!

All organizations are actually systems.  They are by nature highly interdependent.  And, because of the “humaneness” they are also very complex.  The way to achieve a high performance work system is to keep it very simple.  DO NOT LET THE “HR” PEOPLE do design work – they will create a defensive, reactive system that will confuse most everyone (except themselves)!

It’s not simple, but it’s just not that hard.  Start with the end in mind.  Work backwards from what is the minium critical specifications that the ultimate Customer needs (if you can, go a step earlier and study how your customer uses your product and how their product is used by their customer).  Follow the value stream – the GEMBA.  Map the processes that deliver value to the customer.  Determine the process capability and compare it to the requirements of the customer.  Are you able to meet the requirements?  How much variation exists?  Why does it exist?  How much waste is there in the process – materials, movement, re-work, etc…?  Work these steps all the way back through shipping, warehousing, manufacturing, procurement, order entry, accounts receivabale, and sales.

ONLY ONE PROBLEM – you can’t do this work alone.  And you should not do this work alone.  Therefore we must design a work system where employees learn to do this as part of their jobs.  A system of management is required that can unlock the capability of every worker to participate in this activity of continuous process improvement.  This kind of work transcends the “satisfaction” that most companies speak of in employees doing the daily routines.  This work goes so far beyond “engagement” and “empowerment” and can compete with being “self-actualized”.  Because when employees are given this kind of opportunity and an environment that supports learning – we actually can create PEOPLE that are capable in so many other ways.  When we teach employees how to improve things, they improve everything – at home and at work, at church and in their communities.  And, because the energy that they possess is so magnetic – they often teach others how to teach others.

SO HOW DO WE DESIGN THE MANAGEMENT SYSTEM?  Whatever you do – don’t let the HR people do design.  Stay tuned for part 2.

Finding the people with the right behaviors is key.  Yet bring good people into a bad system and you get bad results.  Bring mediocre people (if there is such a thing) into a great system and you can get great results.  So, do you have a good or a bad system?  How do you know?  Ask and study.  Look at your metrics of turnover, absenteeism, injuries, leaves of absences, and employee relations data.  You probably already know which departments (managers) have the biggest problems – but data is always better than hunches.

Track the stats.  Does the data show stability?  Can you predict to high confidence level the outcome of the system.  Is the system stable?  For example, can you predict that  3 to 5 people will leave the company every  month?  Can you predict that you will have 2 to 3 leave requests per month?  Can you predict that on any given shift you can predict 2 tardies and 1 absentee?  Of course you can!

Break it down.  Next, disaggregate the data.  Comapare across plants, departments, shifts, managers, etc…  Does it point you in a particular location?  Of course it does, and it simply validated your initial hunches!

Map the process.  Next “go see”.  As best as you can – find out what it is like to work in that department.  Review exit interviews.  Do some probing.  Track the experience of a new hire through the first few hours, days, months.  Study the “high performers”.  Why do some flourish and others can’t wait to get out?!?  It could be the work, but it is likely the system of management is use.  Fix it.

To start the process of building a high-performance organization the first step is to stop accepting the wrong raw materials in the dock doors.  Obviously, I am referring to making the wrong hiring decisions.

DON’T hire talent.  Hire behaviors.  The right behaviors.  It makes little sense attempting to change the behaviors of current employees, which is a grueling process, while the same (ineffective) behaviors are sitting in the New Employee Orientation.

So what are the right behaviors?  First, what exactly is a behavior?  Anyone?