A Sweeping ‘People’ Agenda

A Sweeping “People” Agenda

Tom Peters

Many of my columns report on clever ideas for improving quality
or customer service. Fine and dandy. But the secret of the real
winners is coming up with such ideas continuously. Japan’s top
firms, such as Toyota, collect several million suggestions each
year. On average, each Toyota employee submits 50 ideas per year;
often more than 90 percent of them are implemented.

Sustaining the flow of useful ideas (as part of a suggestion
system or not) is essential, but most systems fall down. A recent
study by consultants A.T. Kearney reported that 80 percent of
Fortune 500 firms had started some sort of quality circle program
since 1980. Tragically, 83 percent of them dropped the effort
within 18 months.

Most managers acknowledge that workers must become more involved
in order for their companies to survive in a competitive
environment that demands much higher productivity, quality, and
responsiveness. But how can we avoid the sorts of results Kearney
reports? The answer is a sweeping and revolutionary 10-point
program:

1. Broaden all jobs, and involve people in almost everything.
Job specialization must go. The often 100 or more job categories
in a plant or operation center must be reduced to two or three.
Furthermore, each worker must be encouraged to learn 20 to 30
different jobs. Maintenance, repair, budgeting, recruiting, and
all quality inspection are among the tasks we should expect every
worker to master. Workers at many firms are successfully doing
all of the above and more.

2. Train. Companies, such as Motorola, are reporting a 30-to-1
return on investment in training in statistical process control.
All workers should be trained in problem cause-and-effect
analysis, listening, and interpersonal dynamics (team problem-
solving skills). Constantly upgrading skills of each worker
should become a way of life at every firm.

3. Create self-managing teams everywhere. There is no role for
the traditional first-line supervisor. The usual span of control
of one supervisor to 10 nonsupervisors at the front line must be
superseded by ratios of 1 to 50 or 1 to 75 (or more). Everyone on
the front line should be a member of a “business team,” with team
leadership rotating among members.

4. Completely reconceive the middle manager’s role. With the
traditional first-line supervisor eliminated, the supervisor at
the next level becomes a facilitator for teams. The middle
manager must shift from a “vertical” emphasis (guarding his
function’s prerogatives) to a “horizontal” emphasis (inducing
quick action-taking among teams and functions).

5. Get rid of excess structure. There should be no more than five
layers of management in any firm of any size; no more than three
layers in any facility. The Catholic Church has made due with
five layers and thrived for 2,000 years!

6. Listen, recognize, and celebrate. Every manager at every level
must be retrained to become a listener rather than a talker. The
only time a manager should talk at any length is when sharing the
most sensitive operating information with everyone, or when
acknowledging good work. Numerous forums must be constructed for
sharing the information, for listening to ideas, and for
constantly recognizing even the smallest achievements.

7. Cut out the Mickey Mouse rules, and provide an attractive work
environment. Often, the reason that an operator doesn’t cotton to
maintaining his machine is that he must fill out a two-page form,
get two signatures, and pass through a doublelocked door to
borrow a test instrument. Get rid of the excessive regulation.
Also get rid of the inconsistencies. You cannot demand a quality
job in a shabby workplace, where, furthermore, cost cutters have
just removed one of the two pay phones for 75 people.

8. Pay for productivity increases and quality improvement, and
provide a stake in the action. When people come forth with
productive ideas and energy, pay them! Above-average base pay and
a high, team-based incentive tied strictly to measurable
performance improvement are crucial. Equity ownership helps too.

9. Guarantee employment. If you ask people to routinely sally
forth with labor-saving suggestions, then you must assure them
that they will not be laid off if they do so. A high level of day-
to-day risk taking demands some form of employment guarantee.

10. Attitudes. None of the above will amount to beans unless
management (especially top management) believes in the virtually
unlimited potential of every worker. Without such an attitude,
subtle sabotaging of this program will surely ensue.

What do steel makers, such as Worthington, Nucor, and Chaparral;
window maker Andersen Corp. of Bayport, Minnesota; Lincoln
Electric of Cleveland; retailers Nordstrom and Lowe’s (lumber and
hardware) have in common? Each of these sizeable firms’
productivity is several hundred percent above its industry’s
average. Every firm, from General Motors to the corner
haberdashery, should take on the goal of at least 100 percent
improvement in productivity in the next 48 to 60 months — through
people. Piecemeal implementation will not do (remember the
miserable success rate of those quality circle programs). You
must do all of the above, do it fast, and support it with
appropriate technology; it’s a staggering but necessary demand.