ASQ - Team and Workplace Excellence Forum


April 1998

Articles

Forging New Ways To Work

Celebrating Success

JCPenney Spells Out A METHOD For Success

Roberts Express Delivers CATs

Stories Of The Future

Taxes, Oscars And Performance Appraisals



Columns

Quality, Wherefore Art Thou?
by Peter Block

The Bottom Line Benefits Of Participation
by Cathy Kramer


Features

Brief Cases
Business News Briefs

Views for a Change

Pageturners
Book Review

 

The Bottom Line Benefits
Of Participation
By Cathy Kramer

Did the headline get your attention? This is what we are all asked to 'prove' at one time or another. Whether the question is asked subtly as when individuals resist change efforts to move the organization toward a more participative culture or when potential attendees to an AQP spring conference are asked: "Because of attending, how will you save the company money or make money when you return?"
Here are two useful studies to buttress, fortify, defend and advance your efforts toward creating more participative workplaces.

A study by IndustryWeek looked at manufacturing plant practices and plant performance. The study found that "62.9 percent of the plants with 100 percent empowered workforce and 68.2 percent of the plants with 76-99 percent empowered workforces reported productivity (dollar value of shipments per employee) of $150,000 or more. Just 44.6 percent of plants with no empowerment reported productivity of $150,000 or more." So, a correlation exists between higher productivity and higher levels of empowerment in the plants surveyed.

The survey also found that for nearly all performance metrics tracked, the "percentage of plants achieving the best results was significantly higher among the most empowered facilities." Naturally, achieving effective empowerment requires training the workforce and building more skills and capabilities. Consequently, plants with higher levels of training were more likely to report better performance measures.
Interestingly, plants with higher levels of empowerment were more likely to use other best management practices, like customer-focused practices, quality management initiatives, supply management practices, competitive benchmarking, etc. This leads us to another example.

If you had invested in the stocks of the six companies that won the Baldrige Award and the parent companies of the 12 subsidiary winners, your investment would have out-performed the S&P 500 by 2.4 to 1. This means that an investment in these organizations realized a 362.3 percent return compared to a 148.3 percent return for the S&P 500. The hypothetical 'Baldrige Index' tracks the investments from the month following the announcement of the award winners to Dec. 1, 1997, according to NIST (The National Institute of Standards and Technology, which administers the Baldrige Award). It should come as no surprise that the Baldrige winners demonstrate extraordinary investments in training and building the skills of their employees and almost universally acknowledge the critical importance of employee empowerment and teaming.

And so, for those needing to document the bottom line benefits of participation the proof is there - investments in training and creating a participative culture yield concrete measurable results. This is reassuring, but only takes us so far. If this data isn't compelling enough, then what data is? Thinking that data persuades is an illusion. Depending upon which 'side' you're on, either there is not enough or not the right 'kind' or it doesn't fit 'this' situation, and on and on.
While many managers will use the lack of data to argue against people investments, when they are given the data, the answer is still no. Why? I believe managers invest in participation and training more out of personal conviction and their own experience than from data and promised measurable results. Participation is an emotional issue for managers and employees. Maybe the best we can do is to point our efforts towards managers who are instinctively drawn to participation and stop trying to amass data, which will always be 'only correlational' and never enough for the skeptics. Data can nudge us over the line, but will not carry the day. Perhaps telling the stories of the new workplace is another way to communicate the bottom line benefits.
We hope News for a Change tells those stories and provides, at least occasionally, additional fodder for those instinctively drawn to the challenge of creating highly empowered, participative workplaces and communities.

April '98 News for a Change | Email Editor

 

 
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