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Contact Ruth Tearle at +27-21 712 2154 or email ruth@changedesigns.co.za |
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DOING IT DIFFERENTLYBy
Paddy
Norton.
This democratisation process was featured on television in mid 1994 on the South African Broadcasting Corporation “People” programme.introductionIn
1988 I became the Managing Director of
a medium to heavy engineering company located on the
Bayhead in Durban South Africa. They were a well diversified
operation fabricating components for the petrochemical, sugar,
utilities, mining, offshore and other similar industries. I
found the company was in general disarray and had not been
profitable for many
years. It seemed to mirror the rest of the woes in the “smoke
stack industry” in South Africa and the rest of the World.
Levels of worker participation and democratisation were low with
workers receiving no recognition and giving no input. The
challenges facing us were immense. It would have been folly to
proceed down a route that others had tried and failed. I
had learnt from both visiting and research into successful
companies that they were successful because they combine high
levels of employee participation and control of the processes to
achieve a synthesis between high effectiveness and high quality of
life leading to long term, sustainable business success.`
If
I was going to be successful with this company I needed to adopt a
very different and revolutionary approach. Top down management
styles would have to be given the” shove” and replaced with
people power. The years of pyramid authority would have to give
way to democratisation with management consulting and
collaborating with employees at every level on how the company's
business should be conducted. As
a first step in the process of change I engaged the services of a
consultant and mentor well known to me and experienced in change
processes and with his skill we designed a broad vision framework
for change which would have democratisation as the cornerstone.
This was not easy as we were in “pioneering country” in the
deep dark days of apartheid in SA. There was no model we could
look to or legislation to be guided by. This would be an unknown
journey with no obvious conclusion. It would be very different to
embarking on a process like an ISO listing which has several
milestones along the way for measurement concluding with an
accreditation certificate. The biggest challenge in the process of change is to change the mindset and culture of the management.Management must create the climate for change, determine the broad destination and the approximate route. In this process I knew I would have to be the driver and not delegate it to someone else. I was committed and needed to motivate the managers and all the employees to proceed along this new and very challenging process. Ironically a kind of benign autocratic approach was needed to change and democratise the company. setting
up a change committee
As a second step in the process of change a “Change Committee” consisting of eight employees representing every sector of the company was elected that would be chaired by myself. This committee was tasked with planning, designing and implementing a” total package of changes” for the company. identifying a total package of changes
In
embracing the
implementation of this process collaboration with all
employees through committee members, myself personally and
group discussions took place on a progressive basis and a
“total package of changes”
necessary to support the democratic process and change the
fortunes of the company came into being. I realised that if a
revolutionary change was needed then there had not been enough
evolutionary change in the past and we knew we should not:
The”
total package of changes” that were planned, designed and
implemented progressively over a period of 5 years were
many with some having more of a
marked impact than others. Ultimately it was the collective
impact of all of the changes that made the programme a success. Some
of the individual changes that made the greatest impact were:
Consultative committee.
This
committee effectively replaced the Management Exco and the
Employee or Workers Council which were disbanded. It consisted of
8 members equally represented from management and the employees
who met formally monthly and informally more regularly. The agenda
was designed to be comparable with that of the Board meeting with
information packs similar to board packs. These packs were also
copied to the Green areas for all employees to read. This
committee was ranked just below the Board of Directors and was
empowered to make binding decisions regarding the running of the
company. It was chaired by myself. One
of this committees first tasks was to prepare a “value
code”.This was essentially a code of behaviour that all employees
would work within. The involvement of all employees in its
preparation was obtained and this document was published and
printed for all offices and work places. Housekeeping.A
programme to improve the current safety and housekeeping rating of
one star to five was embarked upon over 3 years. The safety and
well being of all employees and compliance with the law became
paramount. In addition to this we took into consideration the
motivation and morale boost of the look good and feel good factors
that a “renovated”work place would bring about. For
the purposes of accountability the Company was divided into
clearly defined areas. Monthly inspections were agreed upon and a
team of management and workers
accompanied me on these inspections. All of the company's
facilities and assets were included in this programme including
offices, company cars, stores, labs etc. During inspections the
team would inspect an area along with the accountable
supervisor/manager. A list of “fix it” items would be issued
to the accountable person to have attended to prior to the next
inspection. In this way every
employee was engaged in this process. A monthly prize ( braai or
barbeque) would be awarded to the winning area. Communications.
A
programme to improve communications was carefully designed and
implemented. It was realised that improved communications was a
critical element of the change process and would be based on the
premise that ‘he who communicates is King’ and that
communication should be distinguished from information. This meant
that if something is worth communicating it is worth communicating
quickly and the only way to do this is every day face to face. If
it can wait for the month end braai/barbeque or magazine it is
information, not communication. Some of the initiatives designed
and implemented were:
Green areas.
This
was a copy of the Japanese Motor Industry. To improve the flow of
information between management/supervision and employees, green
areas were introduced. These gave employees the opportunity to
become involved in planning their day with their supervisors and
managers. They could also share their ideas, grievances, and
problems. These daily meetings were held at the commencement of
production time for approx 15 minutes. Green
areas were rooms that were off the shop floor or working areas
(normally painted green) and dedicated as communication centres.
In later times they became mini business unit centres displaying
real time information on issues such as production efficiencies,
defects, housekeeping etc. Knowledge Management.
We
only gave this process the title of “ Knowledge Management “
when we concluded its
initial implementation and realised what we had achieved. This
particular initiative was probably the most revolutionary that we
embarked upon. We
realised that we could not democratise the company or empower
the employees unless we had a policy of full
disclosure. Democratised
and empowered companies do not theorise, Employees
have a right to know the condition of the company at all times
including finance, production, marketing and sales opportunities,
order book, customer complaints etc. We
developed an operations centre where we erected “white boards”
to display this information. Typical of the information displayed
was:
Management
were made accountable for
updating this information either daily, weekly, monthly as
appropriate. Commensurate
with this initiative
we decided to have daily meetings in this operations centre to
both share and manage the information displayed on the “white
boards”. This meeting was attended by senior and middle
management representatives from all company divisions and the
meeting was held based on a structured agenda which incorporated
the following disciplines:
A
policy on transparency and visibility was made public to all
employees and they were invited to visit the operations centre at
any time. At that early stage the depth of knowledge of the
employees was limited but as an individual made progress the
initial appreciation progresses through awareness, knowledge,
understanding and finally to full capability as a result of which
the individual trained others. We
realised that in successful companies Accountability.
Empowerment
without accountability would be an exercise in futility. The
process of changing the company structure into that of “mini
businesses” would automatically bring together empowerment and
accountability. This would be a long term programme as it involved
a significant change to existing accounting software and systems
in order to have separate income statements, balance sheets,
overheads and other information per unit. As existing structures
were changed and converted into “mini business units” the
benefits were immediately evident. Quality Management Systems.
A
Quality Management system existed but was not fully implemented
nor accredited. It would have been difficult to do so in the
culture that prevailed. The quality systems were seen as
bureaucratic and a means of exposing problems and therefore
individual performance. We
did not want to invest in obtaining ISO accreditation unless we
were doing it for the right reasons and not for a “window
dressing” exercise. Quality should not be something special or
voluntary. It is the cost of staying in business and must be fully
integrated into the companies culture.
A
programme of implementation including training and culture
transformation was designed and planned resulting in ISO 9001
accreditation. This was followed by the introduction of
benchmarking and a costing system. Recognition schemes.
Recognition
schemes for all employees were carefully planned and implemented
as we believed that this was a key motivator in getting all
employees to raise and sustain
their levels of performance. Wage and salary increases were
short term motivators only and would not sustain motivation over
the medium to long term. Some of the
schemes implemented included:
Reversed
parking
In
line with the increased safety awareness programme all vehicles
parked inside the company had to reverse park into their bays.
This would allow drivers to see exactly what was in front of them
when driving out and prevent accidents with anyone who happened to
be walking past. This also applied to all visitors parking within
the premises. This
particular initiative was, besides its safety focus, also a sign
of being different and was readily and avidly enforced by all
employees with relish. Control of business processes.
We
were “empowerment
conscious” and therefore wanted to create the right balance
between having effective controls in place but also ensuring that
the operational team had control of the processes instead of being
controlled by them. This would allow for flexible decision making
throughout. Rather than tamper with controls that were effective
we focused on known areas of weakness. Some of these were:
Unions.
Traditionally
Unions were the enemy and not to be considered as a stakeholder in
the company's affairs. We decided to change all this and to
embrace them with open communications, trust and respect. They
were regular visitors to the operations centre to see how the
company was progressing as well as attending company social
functions. As a result negotiations with them were more
constructive and informed. Affirmative action planning/training schemes.
We
did not want to wait for legislation to determine how we should
organise the company and quickly started to introduce competent
Black people into management positions. In parallel with this we
devised a scheme where two Black people from the work place would
be selected annually to embark upon organised career training
programmes. This was in addition to the normal training schemes
provided by the company for employees. Flatter organisation structure.
Traditional
pyramid structures had to go. They were costly and ineffective.
With management hierarchies relatively flat and differences in
status minimised, control and lateral coordination depend on
shared goals and expertise rather than formal position-determined
influence. A flatter structure was designed with the emphasis on
“mini business units’ who had clear accountability for every
aspect of their business including the financial aspects. ‘No
Door’ culture.
Tradition
dictated that Management styles were formal with closed doors. This was changed to a no door, informal style where
management were encouraged to have open communications with
employees. This was also extended to management being encouraged
to have informal discussions with workers at their place of work
and green areas. Team preparation of business plans.
Strategising
for the future of the company was not my or the managements sole
prerogative. If we wanted to be successful and embrace a true
democratic style of management we would have to include as many of
the employees as
possible. It was tradition at annual three year business plan
sessions for the management only to spend some time at a local
venue for this purpose. We changed this to include a cross section
of elected employees to join the management in this process. Commensurate
with this initiative was a formal quarterly feed back session with
as many employees as possible on the progress being achieved
against business plan milestones. Clock cards.
Tradition
determined that all hourly paid employees time was managed by a
clock card system linked to payroll. Salaried employees had no
such system in place. We perceived this to mean that hourly paid
employees were not trusted and salaried employees were. This of
course is nonsense. We were never able to obtain complete
consensus on the way to go with this during my tenure but we did
obtain consensus that it was an outdated system and it was likely
that a system where no employees “clocked” would be
implemented. Reward.
Over
time we tried many forms of incentive schemes. The premise that all
of these schemes was based on was that we do not pay employees
extra for what they are paid to do. The most successful and fair
scheme in principle was gain sharing. The basis of this scheme was
that once a certain target in the budget or man hours had been
achieved any improvements above that level were shared by the
employees and the company on some pre-agreed ratio of earnings
distribution. In
traditional South African companies good performance is often
rewarded by having a braai/barbeque. We found this to be hugely
rewarding and a great motivation for all employees. Visible Management privileges.
There
is no place in a company for second class citizens. This does not
mean that everyone has the same status. Status is a state of mind,
it is your perception of your position in relation to others. My
position had a different status in the organisation from a
workshop operator. Nothing is going to change that but it is
possible to to eliminate the illogical differences in the way
people in the company are treated. Careful thought was given to
this very sensitive issue which concluded in the following visible
privileges disappearing.
Transport assistance.
During
the strikes on the Bayhead in August 1992 our employees were
intimidated by other employees to stay away from work. Our
employees felt that they had no need to strike and requested
police protection from us in the mornings so they could arrive at
work safely. This we did. However
on Fridays , being pay day, they were exposed to striking gangs
attempting to rob them of their wages. To prevent this we
contracted with a local transport company to take all of our
employees from the company premises into Durban city and drop them
off at a safe location. This was a service paid for by the company
which continued after the strikes had ceased. Conclusion
Not
unnaturally there was some initial
resistance to some of the changes. Production people did
not want to become involved with the financial issues of the
company and there were some concerns amongst management that they
would lose their power base. As some of the initiatives started to
show benefits there was a general realisation that the benefits of
the programme far outweighed any disadvantages. The
justification for this programme came in August 1992 when a
general industry strike threatened to upset production. To the
company's credit the only 2 employees who did not come to work were
two union officials. The rest felt there was no reason to
stay away. A
summary of some of the achievements brought about by this process
of change were: Financial
indicators
Non
Financial indicators
Behavioural
indicators
Paddy Norton of Fundisa Management Services, provides consultancy services to the petrochemical, oil and gas, foundries, automotive, academic, mining, construction and general engineering industries. These include Contract Claims Management, Claims Management Training, Executive Coaching, Strategising Business Turnarounds, Investment Strategies, Executive Resourcing and Placement, Resourcing and Facilitating Black Empowerment Investments, Advising to Black Empowerment companies, Implementing Knowledge Management Process, Litigation support as consultant/witness, Arbitration support as consultant, Acquisitions, Resourcing of product substitutions (SA). He can be contacted on Tel: 027 31 7654224 Fax: 027 31 7654224. Email: nort@mweb.co.za |
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