3 The company                           

 

3.1 Types of companies

Traditional, liberated, comparison, Scop, Lean

3.1

3.1.1 Traditional

No company can be successful, in the long run anyway, if profits are its principal goal. Ricardo Semler

The scientific organization of work (Frederick Taylor, late 19th century) contributed to the rise of mass industry.

This is McGregor's Theory X (see § 1.3) and its command and control environment:

In the traditional business:

The results are increasingly disappointing following the low motivation (commitment) of staff.

3.1.2 Liberated

The price of freedom is responsibility. Douglas McGregor

Since the middle of the 20th century, supply has been greater than demand, the product, service and work have become more complex. A new organization is born.
 
This is McGregor's theory Y (see § 1.3) and its power-sharing environment:

In the liberated company:

The results are very positive following the strong motivation (commitment) of the staff.

One of the first companies to implement a liberated organization was W. L. Gore & Associates, founded in 1958 and known for its countless innovations (GORE-TEX and thousands of others).

For the market, the liberated company is above all:

To make people happy at work we must release their energies on a voluntary basis. It’s choosing to share:

True story 

In 1976, Herbert Lefcourt carried out the following experiment: two groups had to solve some puzzle and rebus type enigmas in a very aggressive sound environment (lively discussions in foreign languages and various unpleasant noises).

The second group had a button to mute the noise. He solved 5 times more puzzles than the first group.

The surprise is that no one from the second group used the button at any time.

But knowing that the decision to activate the button was available to them makes all the difference.

3.1.3 Comparison

Trust pays off more than control. Jean-François Zobrist

Figure 3-1 shows the classic structure (traditional pyramid), the agile structure (inverted pyramid), and the circle structure (self-managed teams). The last two structures are variations of the liberated company.

3-1

Figure 3-1. The three structures

In Table 3-1 some differences between traditional and liberated companies are shown.

Table 3-1. Comparison between the two types of companies

Subject  Traditional company (“how”) Liberated company (“why”)
Achievement         Privileges for some Equality for all
Activities outside of work         Almost non-existent Sports teams, friendly teams, interest and leisure associations
Behavior based on         Rules, suspicion Values, trust
Bonuses    Individual result     Team efforts
Commercial     Sells what we can do     Does what the customer needs
Creativity     Limited      Strong
Decisions     Approved and validated by management     Taken at the lowest level with the process of soliciting opinions
Discipline     Against the disruptive 3%     Trust (“man is good”)
Economic environment     Offer exceeds demand     Offer anticipates demand
Expenses     Limited at each level, validated     No limits but obligation to seek opinions
Freedom     What is not allowed is prohibited     What is not prohibited is allowed
Function     Job description, title      Commitment, versatility
Goal (purpose)         Make money Delight the customer in a profitable way
Hierarchy         Pyramid, compartmentalized services, a few levels Circles, horizontal structure, no barriers, very few levels
High-level manager       Delegates, does not go into details  Participates in improvement teams, spreads the knowledge of “seeing waste”
How to lead     Plan, manage, order     Feel, serve, suggest
Improvement     Technical teams, very modern equipment (technological breakthrough), new project     All personnel, low costs (common sense, foolproof devices), regularly
Information     Filtered, source of power     Transparent for all
Innovation     If there is a problem, the person responsible is blamed     Everyone has the right to make mistakes
Inspection     Inspect the product by a specialized service    Inspect the process by operators
Leadership     Command, control, manage staff and resources     Facilitate, unleash creativity, serve others
Local manager     Transmits orders from top to bottom     Behaves like a coach who anticipates, listens to suggestions, helps and sets an example
Management     From top to bottom, I command, you obey     Responsibilities delegated to the operator (autonomy)
Market     Gain more share     Become and stay the best
Mission     Create more value for shareholders     Create more happiness and value for all stakeholders
Monitoring     Compliance, sales     Performance, profits
Motivation     Bonuses, stability, recognition     Self-fulfillment, pleasure, responsibility
Operator-manager relationship     The operator goes to see the manager     The manager goes to see the operator
Organization     Rigid     Agile
Penalties         Fear of the boss Understanding of teammates
Personal development     Training     Education
Personnel     Human resources     Human wealth
Power     Centralized     Shared
Quality     Compliance, meet product requirements, multiple inspections     Commitment, meet customer requirements, operator self-quality
Recruitment     Correspond to the job description     Correspond to the state of mind of the team and the purpose of the company
Relationship at work     Executives are the experts. They direct and monitor     Operators know the work best and participate in decisions
Relationship with staff     Paid and rewarded     Respected, fulfilled
Relationship with the customer     Satisfaction     Surprise
Responsibility     The manager is responsible, the staff is accountable     The staff is responsible, the manager is accountable
Responsibility for quality     The quality department sorts, inspects, monitors, manages and decides     Everyone is involved in the processes and continual improvement
Skills     Specialized personnel     Versatile development
Small problem     Often ignored, forgotten, is never a priority, quality department     Any problem (small or large) is always considered by everyone as an opportunity for improvement
Staff commitment     Passive, minimal     Voluntary, deep
Structure     Pyramid, functions     Self-managed teams, commitments
Suggestions     To please the boss     To improve the process and the work environment
Supplier     Finding the lowest price     Long-term partnership
Target     Customer satisfaction     Stakeholder satisfaction
Unforeseen event    Fear, waiting for decision from hierarchy     Opportunity to learn, adapt and improve
Values         Know-how Love-how
Vision and strategy  Developed and promoted by top management  Developed by collective intelligence and supported by top management
Way of managing     Management (maintain the system) Leadership (enrich the culture)
Working hours Fixed, time clock Flexible, individual commitment

3.1.4 Specific cases

3.1.4.1 Scop

Another way of doing business

The Scop (workers' cooperative production society) is a participatory enterprise (personnel have priority over capital, which itself is subordinate to work). Examples Mondragon, Up (before Chèque Déjeuner).

Governance is democratic (during the general meeting each associate has one vote). Managers must be accountable to all associates. All financial information is transparent and viewable by everyone.

Each associate also has duties: he is responsible for his performance in front of the other associates.

The distribution of profits is equitable and fixed by law.

Freedom of membership is guaranteed (on average 80% of SCOP employees become associates after two years of seniority).

Possible weak points:

3.1.4.2 Lean

Lean is like a muscle; more it is used, the more it strengthens. Jamie Flinchbaugh

Lean: philosophy, approach, method, way of seeing, learning and thinking to achieve operational excellence

A company that has adopted the Lean approach (see § 7.4) often uses the best organizational practices and tools from the past, among which the Kaizen philosophy (see § 7.2) has an essential place. Example Toyota.

Kaizen: from Japanese kai - change, zen - good

Continual improvementpermanent process allowing the improvement of the global performance of the organization (see also ISO 9000, 3.2.13 and ISO 14 001, 3.2) step by step to create more value and less waste. The Kaizen approach is based on common sense and staff motivation

Some necessary conditions for a company to embark with a prospect of success in the Lean journey:

You can check your top management's commitment to the Lean approach with a test in annex 01.record

Continual improvementpermanent process allowing the improvement of the global performance of the organization (see also ISO 9000, 3.2.13 and ISO 14 001, 3.2) is like a heart that beats without rest and is an integral part of corporate culture. The opportunities for improvement are endless, but since time and resources are not, choose your priorities carefully.

Possible weak points:

More than 400 activities relating to the failures and successes of the Lean approach are listed in annex 02.record

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3.2 Liberated company

Principles, vision, examples, sharing power, implementation, pitfalls

 3.2

3.2.1 Principles

If you want to go fast, go alone. If you want to go far, let's go together. African proverb

Some principles and methods found in liberated companies:

Liberation does not eliminate power; it transforms it by sharing it and empowering all staff.

A happy workplace requires great self-discipline. Liisa Joronen

Freedom does not mean anarchy because when each person assumes their new responsibilities they:

3.2.2 Share the vision

Vision without action is a dream. Action without vision is a nightmare. Japanese proverb

Some notions:

When there is a genuine vision (as opposed to the all too familiar ''vision statement''), people excel and learn, not because you tell them, but because they want to. Peter Senge

We can start by asking these questions:

Top management ensures the necessary conditions for the creation and approval of a company vision (with the active participation of all staff and, if appropriate, customers). Staff buy-in will be gained with a compelling explanation and in-depth discussion.

Each member of staff can choose their essential and desired values on a piece of paper, members of top management do the same and then the results are compared. A consensus must be found on a limited number of identity values.

For each value chosen, a survey can be carried out with all staff. The survey consists of establishing a more or less long list of all types of behavior on which a majority can be reached (see the fifty convincing examples in Laurence Vanhée's book Happy RH, pages 118 to 122). And then find a suitable way to communicate on this list.

Top management remains the guarantor of the vision, values and corporate culture. The vision cannot be imposed but the conditions that will help staff adhere to it can be changed.

More freedom, autonomy and responsibility lead to more happiness and performance because we know why we work.

Make money for a company is like oxygen for one person; if you do not have enough, you are lost. Peter Drucker

So money is a condition, it is not an end.
 
Some examples worthy of inspiration:

When the vision is shared by everyone, cruising speed is optimal because everyone is rowing in the same direction.

3.2.3 Sharing power

All decisions should be made as low as possible in the organization. Robert Townshed

Sharing power means delegating responsibility to others, maintaining an interest in the work and results, knowing when to offer help.

A decision is made either by:

The advantages of the processactivities which transform inputs into outputs (see also ISO 9000, 3.4.1) of soliciting opinions (see Dennis Bakke's book Joy at Work):

The 7 possible levels of delegation (see Jurgen Appelo's book Management 3.0 Workout and the game “Delegation Poker”):

  1. announce: I make the decision and announce it to the team
  2. sell: I make the decision and try to get the team to buy in
  3. consult: I consult the team then I make the decision
  4. agreement: I discuss to reach a common decision (consensus)
  5. advisor: the team consults me and makes the decision
  6. inform: the team makes the decision and informs me
  7. delegate: the team makes the decision without consulting or informing me

Some ideas for letting go:

True story 

Irv Refkin says “Trust makes money.”

To secure and distribute the tools in his repair business, his assistant suggested he hire a storekeeper. Result: salary of $35,000 and queues in the morning to pick up the tools and queues in the evening to return the tools.

Solution: transform the tool store into open access and find another job for the storekeeper. Result after a year: a loss of 2000 dollars for missing or stolen tools and no queue in front of the store.

3.2.4 Enrich the corporate culture

No one can whistle a symphony alone; only an orchestra can interpret it. Halford Luccock

Corporate culture is a state of mind which depends above all on:

Adopting the corporate culture means accepting:

Our behavior, common language and actions are found in the outer (visible) circle of our personality, cf. figure 3-2.

3-2

Figure 3-2. Personality circles

The (inner) circles are hidden and are:

Our attitude is the fruit of our values and our beliefs. Our behavior depends on our attitude.

We can choose the attitude we bring to our work. Stephen Lundin

Changing values, beliefs and attitudes is a very difficult task. But changing the environment can easily change our behavior (see § 6.3).

True story 

In the early 2000s John Iwata, an advisor to IBM management, proposed allocating $5,000 to each manager for emergency expenses, without approval or explanation.

With its 30,000 managers, that amounted to $150 million in uncontrolled expenses.

But specific procedures must be put in place to control these millions, said people from the finance department.

No, said director Sam Palmisano. It's trust. It’s a $150 million trust bet.

A year later it was found that only $150,000 had been spent.

Changing culture takes time and examples, especially to fight against habits and fear of the new.

Some ideas for enriching the corporate culture in the autonomous team and its natural leader (he stands out in the field through his kindness and dedication to serving the team):

To give your best, you must meet conditions such as:

3.2.5 Implementation

Moving towards a liberated company is a learning journey in which everyone must find their own path

Transforming the company means changing:

This liberation is an ongoing processactivities which transform inputs into outputs (see also ISO 9000, 3.4.1) that requires a lot of:

Each company is unique, which means that you have to find your rhythm to adapt the transformation of:

The initiative can only come from top management at its highest level, because it is the only one that has the possibility of fundamentally changing the basic structures. This implies:

Obtaining the agreement of the legitimate owner of the company is an essential condition for embarking on the release of staff energies.

The support of all staff will come little by little.

Asking lots of people regularly what can improve the work environment is a way to find out what people want (which will make them happier and therefore more successful).

Show where you want to go, explain why (it’s often so as not to disappear), praise the project (it will be better than before), listen to opinions, discuss the first steps together.

A few steps to move forward calmly towards the liberated company:

(Almost) true story 

At the beginning of the 20th century two salespeople were sent to Africa to assess the shoe market. Their telegrams:

    - it’s a real disaster. They don't wear shoes
    - this is a fantastic opportunity. They don't wear shoes yet

Some ideas for better progress:

To err is human, but to persevere is diabolical. Latin proverb

point Pitfalls to avoid:

smileMinute of relaxation. Cf. joke “New manager”.

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