Cave Dweller to Telecommuter
The management process we’re familiar with today has gone through many stages of evolution. Perhaps the earliest and most long-lived was the tribal leader management process. This approach to coordinating activities within a group started in prehistoric times and is still used in Asia by many farming groups and in subcontract situations. Elsewhere, the approach eventually gave way to the guild or craftsman/apprenticeship management process. As organizations outgrew that process, the hierarchical (or pyramid) management process evolved.
In recent years, this process has been modified in a num-ber of different ways. Some enterprises have organized their management processes to coincide with their business process flow. Others have tried to form matrix management proc-esses. But at the grassroots level, these all look alike. Employees have a manager they report to who’s responsible for accomplishing a specific task, at minimum cost, at the highest possible level of quality, using the resources that have been allocated to him or her.
Very little changed in the first-level management structure until about 1965, when some advanced organizations started to empower their employees to take on more responsibilities. Out of this grew major changes in the structure of management. First, management focused on training employees to understand the organization’s goals, values, mission and business plans. Then management explained how the team (e.g., department) contributed to the success of the business objectives. This led to establishing measurements that reflected the team’s customer and business plan requirements. Once the measurement system was established, the teams were provided with training on the organization’s operating procedures, financial controls, problem-solving and process measurement techniques.
Self-directed work teams grew out of all this preparation. Empowered work teams meant that employees could decide how best to do their assigned tasks. As the teams became more effective, it was only natural to expand their empowerment to management. They eliminated the need for a direct manager and took over such activities as giving out wage increases, selecting team members, evaluating performance, discharging poor performers and developing budgets.
The self-managed employee has specific measurements that relate directly to organizational performance. Management monitors performance based on results achieved. Specific goals are set for self-managed employees and performance is measured against how well they meet those goals. The methods for doing so are left up to the individual as long as the approach meets the organization’s ethical practices and values. The self-managed employee process has at last given employees control over their lives, providing a new sense of freedom and dignity.
Ernst & Young is one of the organizations that led this movement. Prior to this change, many company offices were empty most of the time because consultants were out with their clients. Since introducing the self-managed employee concept, the company has reduced office space by about 30 percent. In addition, consultants have been given portable support tools that allow them to stay at home and work when they’re not with a client.
From the consultant’s standpoint, the goals are clear. Each consultant has three primary measurements:
 Realization: Percentage of their chargeable rate per hour that’s actually realized
Utilization: Percentage of time charged to a client
Satisfaction: Customer satisfaction level
The company’s partners and principals are individually assigned a group of employees for whom they serve as career counselor and mentor. Another critical factor to the success of this new management process is excellent five-point (or “star”) communication. Effectively using voice mail, e-mail, newsletters, business status reports and social events is an important part of enhancing consultants’ sense of belonging.
A self-managed employee process won’t work without well-trained, knowledgeable employees and an environment in which a high degree of trust exists between management and employees. It’s an environment in which bureaucracy has a hard time surviving.
Although the self-managed employee concept at first caused some concern at Ernst & Young, the pilot programs went very smoothly, and the results have been well worth the effort. Not only are consultants pleased with the added freedom they’ve been given, but the company has seen a step-function improvement in management consulting profitability.
This is a good example of how creativity, organizational realignment and technology can be combined to better serve employees, management, owners and the community.
H. James Harrington is CEO of the Harrington Institute Inc. and chairman of the board of Harrington Group. He has more than 45 years of experience as a quality professional and is the author of 22 books. Visit his Web site at www.harrington-institute.com.
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