Somewhat recently, I finished reading Employees First, Customers Second by Vineet Nayar. It was a very easy read since the techniques the author talks about using to restore his company to an industry leader agree a lot with what I already believe. Nayar makes a strong case, based on real experimentation and use, for complete transparency, honest confrontations with the truth of what problems and potential problems lay ahead, freedom of information, and making management accountable to employees and not just the other way around.
Early on in his tenure as CEO, Nayar realized his company had slowly gotten used to being at the top, satisfied with slow, steady improvement rather than large leaps of innovation. Nayar writes: [My company] had lost its competitive edge because it had become tolerant of gradual change … and unless the company becomes obsessed with constant change for the better, gradual changes for the worse usually goes un-noticed. He also realized the solution to the company’s problems, even awareness of the problems themselves, laid within the employees, not necessarily with the managers at the top of the traditional hierarchical structure.
In his introductory meetings with employees, Nayar realized there were three broad-types of employees: the transformers who understood and wanted to make things happen, although they were often hampered in doing so by the corporate structure, the fence-sitters who would usually not commit to taking action until there was a clear tide pushing behind them, and the nay-sayers who would pretty much be against anything new. The key, therefore, to getting employees to take action, was to let the transformers loose. Once they were actively working, the fence-sitters would see that the tide had changed and join in. The nay-sayers, of course, would still be nay-sayers, but you deal with those people separately, anyhow and try to get them into better situations.
With these sort of tenets in mind, Nayar set out to create an environment where the employees, particularly, the transformers, could catch, promote, and solve problems themselves. He turned management upside down and instead of making employees accountable to management, made management accountable to employees. Managers were there to respond to the line workers needs, not the other way around. Their shared job was to create an environment where people could easily innovate and solve their company’s problems. Of management, Nayar writes: People saw that some of the managers were little more than aggregators and brokers of information. These mangers’ entire authority lay in their control of the information. As soon as everyone had access to it, their power might come into question. And that was exactly what Nayar wanted. He recast the value of his managers not by their zones of hierarchical control, but by their span of positive influence. To help evaluate the latter, Nayar opened up the employee review process to allow any employee to comment on any manager in the company, within their functional or project unit or not.Other traditional performance review processes were changed as well. For example, instead of just rewarding support services by their time to close each submitted issue/request, Nayar’s company also added an incentive to be proactive by making the total number of requests and issues received a monitored metric as well. Someone closing 1000 issues in 10 minutes each may actually be doing a worse job than someone who only closed 100 within an average of 4 hours. It’s easy to solve long-recurring issues quickly. It’s much more useful to eliminate those common problems and leave time available to concentrate on the larger ones instead.
Nayar created a culture of trust in his company by whole-heartedly adopting a strategy of transparency and openness. Of one purpose of transparency, Nayar tells a short story: “Why do you have such large windows?” I asked my friend [who had very large windows fronting a busy street where all could see in]…. “It keeps the house clean,” he said. Transparency promotes accountability by all – both management and line worker; helps make problems, issues, and solutions, known to all; and not only keeps the house clean, but provides direct, verifiable evidence that it is so. Powerful results for a simple philosophy that is actually easier to enact than the traditional one of hiding information behind a “need to know” umbrella.
Nayar had public talks with staff members, did live video simulcasting of other important meetings, and always focused on the truth of where the company was at any given moment (for better or worse) as well as where it wanted to go. He called one aspect of this approach Mirror, Mirror which he described as … a communication exercise that involved talking with employees throughout the organization about the truth as they see it and getting them to acknowledge the reality, the elephant in the room, that everyone essentially knows about but which has never been publicly acknowledged. This exercise sounds a lot like the looking underneath the rocks aspect of Good to Great. Not only do these exercises get the employees to see and acknowledge company issues, but it often gets them known to management for the first time!
After getting the employee insights into the company’s problems and issues, Nayar engaged them in the solution process, as well. He writes: Mahatma Gandhi, Nelson Mandela, and Martin Luther King Jr. … these great leaders did not formulate strategy by retreating with their top people to a private place and then emerging to make a pronouncement to the masses. No, they walked the roads of their countries, met their people, and talked with them ceaselessly, – just like the Level 5 leader of Good to Great.
There’s a lot more to Nayar’s story than what I summarized here and I think it is also important to note that not everything Nayar tried went well. Some solutions brought unintended consequences that either had to then be corrected, or a new solution put in place instead. Other solutions, though, brought along unintended additional solutions, as well. I think a key to Nayar’s success, as well as to that of the Level 5 leaders of Good to Great, is an inclusive, honest dialog, an erring towards too much available information rather than too little, and a willingness to try and experiment with new ideas. No solution is going to solve everything, but if each one gets you further down the path to continual improvement, you’re doing very well indeed.
Scot’s best teams, both to manage and work within, were hierarchically fairly flat. Equal access to information and abilities to propose and implement solutions makes it exciting to be part of a team and working on a problem. You can create an atmosphere where people moan in the hall ways about what is wrong with the company or you can create one where people buzz in the hall way about what each of them are doing to overcome the current problems.