Great
decisions begin with really great people and a simple statement: I don’t know.
Of
course, you can’t entirely control your own destiny with good decisions. Luck
is still a factor. But overall our research is showing that the primary factors
reside more inside your control than outside.
Act
local, think global.
There
is a decision that many of today’s CEOs have lost sight of: Give your employees
time to daydream.
Regardless
of their assignment, 3M technical employees are encouraged to devote up to 15%
of their working hours to independent projects. Note that the 15% rule isn’t a
rule. It doesn’t require anyone to do anything. It just says that technical
employees are allowed and encouraged to spend 15% of their time on whatever
strikes their fancy. So let’s call it a policy rather than a rule.
Highly
creative people are focused on the task, not on themselves. They’re asking, How
can I solve this problem?, and not What will solving this problem do for me?
Trying to push creative people doesn’t work. They aren’t pushed; they’re
driven.
The
15% policy has inspired other companies to imitate it directly. Most famously,
Google gives engineers 20% of their time to pursue their own projects so do
Atlassian, an Australian software firm, and some smaller outfits. More broadly,
3M’s decision showed a doubtful world one of the knowledge economy’s most
important and counterintuitive principles: A company can improve its
performance by giving up control.
Crotonville
also began inviting in major GE customers, both to offer ideas about “best
practices” and to listen to GE’s ideas about them. For prospective customers,
such coveted access might be why GE ended up getting a deal over a competitor
offering similar prices. Steve Kerr, who at one point ran Crotonville for GE,
recalled that when a customer was deciding between, say, GE Plastic and ABC
Plastic, where price and availability were basically equivalent, the trump card
GE played was Crotonville. Kerr says the sales conversation would go like this:
“If you purchase GE Plastic, we’ll throw in some tickets for your leadership
team to participate in the highly coveted Crotonville education center. After
all, it’s not about the plastic, it’s about helping you become a better leader
so you succeed.”
Steve
Jobs spent part of his final years aiming to perfect his own version of
Crotonville: Apple University, a secret executive-training program that would
institutionalize the surely idiosyncratic gifts of the late, great co-founder.
Shocking
the world of academe, Jobs in 2009 convinced Joel Podolny to leave the deanship
of the Yale School of Management to build it. Podolny’s job is somehow to put
together a curriculum of people and ideas and written materials to show Apple
managers how to thrive, even if they could never—and should never—seek to think
as Jobs would have. Such is a formidable, perhaps impossible, task. Before GE
and Jack Welch made the corporate-university model vital and sexy, it would
have been an unthinkable assignment.
Deming
preached a simple doctrine as true today as when he first formulated it more
than 80 years ago: Better quality will reduce expenses while increasing
productivity and market share. He taught companies to treat production as a
system, involving suppliers and consumers as well as the factory. In Deming’s
world, mass-produced items that were supposed to be identical always varied
from one another in practice. Therefore, industrial processes should include a
cycle for observing those variations and changing the process to reduce them.
The defects should be analyzed, changes made, and the processrefined until it
was done right. His favorite saying was “In God we trust; all others must bring
data."
In
a meeting with the 50 top executives at IBM, he said he wanted them each to
visit a minimum of five big customers over three months. “The executives were
to listen, to show the customer that we cared, and to implement holding action
as appropriate,” Gerstner wrote in his memoir, which devotes a chapter to
Operation Bear Hug. “Each of their direct reports (a total of more than 200
executives) was to do the same.” Moreover, Gerstner wanted his executives to
listen carefully enough that they could report their findings directly to him.
He wanted short reports—one to two pages, maximum—about the Bear Hug visits,
and he wanted the reports also sent to anyone else at IBM who could help with
any problems the visitors had unearthed. (Chain of command was an
institutionalized aspect of the IBM culture, and Gerstner wanted to break the
chain.) Gerstner wrote that Operation Bear Hug was “a first step in IBM’s
cultural change.” Not only was IBM going to be remade “from the outside in,”
but the CEO actually was going to pay attention to what top executives did and
hold them personally responsible.
Keep
your minimum-wage employees happy, and your customers will be happy—and then
your investors will be happyKeep your minimum-wage employees happy, and your
customers will be happy—and then your investors will be happyKeep your
minimum-wage employees happy, and your customers will be happy—and then your
investors will be happyKeep your minimum-wage employees happy, and your
customers will be happy—and then your investors will be happyKeep your
minimum-wage employees happy, and your customers will be happy—and then your
investors will be happyKeep your minimum-wage employees happy, and your customers
will be happy—and then your investors will be happy. (Walmart case)
So
what is the Saturday morning meeting like? In the early days it was one giant
share-a-thon: Employees touted their best ideas—the famous Wal-Mart “greeter”
was a concept developed by a store employee. Some executives would show
best-practices videos and use the occasion to reiterate company rules, among
other things. Remember, only a few years ago the company was often under siege
from unions and the media for its employment practices. Over
the years the meetings became a little stale, and executives worried that
headquarters employees would lose focus. To freshen things up, the company
started bringing in guest stars, from Adam Sandler to Oprah Winfrey to Peyton
Manning. I had the chance to see Gov. Bill Clinton in action. (He answered
questions ranging from foreign-policy trade issues to the Arkansas Razorbacks.
You could tell you’d be hearing from him again—that’s for sure.)
“The
plain fact is that the public which buys from you does not come from nowhere…
One’s own employees ought to be one’s own best customers. [By paying high
wages] we increased the buying power of our own people, and they increase the
buying power of other people, and so on and on. It is this thought of enlarging
buying power by paying high wages and selling at low prices which is behind the
prosperity of this country.”
Neo-Keynesians like
Paul Krugman and Robert Reich continue to argue that high wages naturally
create consumer demand and that a little inflation isn’t a bad thing.
Supporters of the low-wage doctrine assert that economic prosperity is best
served by low wages that don’t threaten inflation or squeeze profits. Rising
wages, while good for the individual, are construed as bad for the overall
economy.
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