ASQ - Team and Workplace Excellence Forum

September 1999

Articles

Not So Common Sense

Establishing Teams: The Agony And Ecstasy

CEOs Have Little Control Over Bottom Line

Older Vs. Younger



Columns

A Conference For, By And At The People
by Peter Block


Features

Brief Cases

Diary of a Shutdown

Views for a Change

Pageturners

 
Views for a Change
Consultant Question and Answer

Jim Harrington Responds:
The key to managing in a delegated, empowered environment is to design your processes to accommodate the 99.9 percent of your employees that are honest, hard-working individuals and fire the 0.1 percent of your employees that are dishonest and slackers.

Delegation is very specific - you delegate a specific task or activity that an individual will be held accountable for. Empowerment on the other hand is less specific. You empower employees to adjust their activities so that they provide maximum value to the organization, not to the customer. The two sometimes are very different. For employees to function in an empowered environment, they need to have an excellent understanding of how their activities impact the short and long-term performance of the organization.

In a delegated, empowered environment, employees have to have a much better understanding of the business and how their assignments fit into the total structure than when management defines all the rules. Individuals need to understand how their actions relate to the business drivers and the business objectives if they are going to make business decisions. Every employee's performance plan should be linked into the organization's business plan and the organization's budget. Employees need to stop thinking about how their actions at work impact them and put primary consideration on how their actions impact the organization's performance. This is best accomplished using two methodologies: Annual Strategic Business Planning methodology and Area Activity Analysis methodology.

A good business plan involves everyone from the boardroom to the boiler room. Its end result is a business strategy for the coming years that is directly related to the budgets that are approved for those years. A good business plan serves three purposes: it sets direction and expectations and defines action.

Setting direction is top management's primary job. In the strategic planning cycle, top management sets direction by defining the organization's vision, mission, values, strategic focus and critical success factors.

Setting expectations is a joint responsibility between upper management and middle management. It consists of two elements:
Business objectives - set by top management - things that the organization needs to accomplish over the next 5-10 years.
Performance goals -can take the form of short- and long-range targets that support the business objectives. They are quantifiable, measurable, time-related, specific goals and should be established by middle management.

The action plans consist of four additional parts that middle and first-line managers and the employees develop.
Strategies - usually cover a 1-5 year period and are related to specific business goals. Middle managers and first-line managers, with the first-line manager having the primary responsibility, develop strategies to define the concepts that the organization will use to meet the specific performance goals.
Tactics - usually cover a 1-5 year period. Tactics are the "how-to's." They are the actions that are taken to implement the strategies. Employees and first-line managers generate tactics and middle management approves them.
Performance plans - usually cover a 1-2 year period. Together, an individual and his or her department manager develop a performance plan. The plan defines how that employee is expected to perform while implementing the agreed-to tactics. Specific performance goals that are magnitude and time related are established and agreed to. They are used to evaluate the individual's performance and have a direct impact on the rewards the individuals receives.
Budgets - usually cover a 1-3 year period. Budgets are based upon individual performance plans. Until the individual performance plans are prepared, budgets cannot be defined. Budget cycles that are independent of the performance planning cycle are usually unrealistic. It is imperative that the budget associated with each individual's performance plan is communicated to that individual in order for them to function in an empowered manner. An empowered employee truly becomes a business unit under himself or herself.

Area Activity Analysis
The Area Activity Analysis methodology is a proven approach used by each natural work team to establish efficient and effective measurement systems, performance standards, improvement goals and feedback systems that are aligned with the organization's objectives and understood by the employees involved. Basically this methodology is made up of seven phases.
Phase I - Preparation
Phase II - Developing an area mission
Phase III - Defining area activities
Phase IV - Developing customer relations
Phase V - Analyzing the activity's effectiveness
Phase VI - Developing supplier partnerships
Phase VII - Performance improvement

The purpose of Area Activity Analysis is to personalize the work that goes on within an organization to the individual, setting standards for quality and productivity. This allows the employees to exercise controls over their personal behavioral patterns to maximize their value to the organization. When the Area Activity Analysis exercise is completed, each employee within the organization will have an excellent understanding of how they fit into the organizational structure and how they impact the organization's performance.

Involving the person in the strategic planning process and then providing insight into how the organization depends upon them, prepares your people to operate effectively within a delegated and empowered environment. At the same time it provides management with the necessary controls to ensure that business performance is optimized.

As General George Patton stated, "If you tell people where to go, but not how to get there, you'll be amazed at the result."

James D. Showkeir Responds

September '99 News for a Change | Email Editor
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